Mgmt Term Test #2

Front 1

What are the steps in the Rational Decision Making Process?

Back 1

Rational Decision Making Process

Step 1: Clarify the purpose of the decision

- decision statement and level of decision (rock metaphor: raising reduces # of choices, lowering increases # of choices)

- develop criteria

- determine which are 'musts' and 'wants'

- weight the 'wants'

Step 2: Evaluate choices

- screen through 'musts' (go/no go)

- compare the 'wants'

- score each ^

- calculate weighted score

- calculate total

Step 3: Assess risk of top choices

Step 4: Make a balanced decision

- high gain, low risk- high gain, high risk- low gain, low risk- low gain, high risk

risk- high gain, high risk- low gain, low risk- low gain, high risk

- high gain, high risk- low gain, low risk- low gain, high risk

- low gain, low risk

risk- low gain, low risk- low gain, high risk

- low gain, high risk

Front 2

Does the Planning Function focus on efficiency or effectiveness?

Back 2

Planning focuses on effectiveness

Front 3

What is Top Down Cascading Goals?

Back 3

Top Down Cascading Goals:

Corporate goals

↑↓

Divisional Goals

↑↓

Department Goals

↑↓

Individual employee OBJECTIVES

↑↓

Implementation plans, activities, actions

=

Results!!

Front 4

What are the 6 reasons for setting goals?

Back 4

Reasons to Set Goals:

1. Effectiveness

2. Sets Direction

3. Sets Targets

5. Reduces Uncertainty

4. Provides focus5. Reduces Uncertainty6. Higher Level of Performance "plan the work, then work the plan"

6. Higher Level of Performance

focus5. Reduces Uncertainty6. Higher Level of Performance "plan the work, then work the plan"

"plan the work, then work the plan"

Front 5

What are the benefits of Management by Objectives (Mbo)

Back 5

MBO:

- clarifies performance targets

- sets mutual expectations

- helps employees to set priorities

- basis for developing the plans to get the job done

- basis for ongoing feedback from supervisor and employee

- serves as a performance self monitoring checklist for employees

- foundation of the performance appraisal

Front 6

What are SMART goals?

Back 6

S = Specific

M = Measurable

A = Agreed

R = Realistic

T = Time based

"Goals without a deadline are only dreams"

Front 7

What are Stretch Objectives?

Back 7

Stretch Objectives:

Goals that are still realistic, but are challenging to achieve (the point is personal development)

Front 8

What are the 7 steps of the Strategic Management Process?

Back 8

Strategic Management Process

Step 1 to 4: identify the organizations..

Values

Vision

Mission

Goals

Step 5: SWOT Analysis

Step 6: Develop and Implement Strategies

Step 7: Evaluate results (control)

Front 9

What are Value Statements?

Back 9

Value Statements:

- Convey a sense of identity

- foundation of organizational culture

- serves as a reference point for managers

Front 10

What are Vision Statements?

Back 10

Vision Statements:

- where are we going?

- clear, compelling, aspirational goal that describes a future desired state that is challenging to achieve

Front 11

What are Mission Statements?

Back 11

Mission Statements:

- what do we do? what is our purpose?

- the reason for being in business (focus on product, service and customers)

Front 12

What is Incremental Growth Strategy?

Back 12

Incremental Growth Strategy:

- slowly and gradually expanding the number of products, customers, markets, services, distribution networks

- using technology to advance the business

- Growing Grassing analogy

Front 13

What is Renewal Strategy?

Back 13

Renewal Strategy:

- to stabilize the organization during tough economic times by reducing the company's activities or operations

- used when: Organizations are not meeting financial goals, Performance is declining, or Organization is in trouble

- Raining vs. Storming Analogy:

Which is ... The severity of the strategy determined by the severity of the storm

^ when it's raining:

You cut costs, tighten budgets, freeze capital spending, freeze hiring process

^ when it's storming:

You close underperforming stores/product lines/services , restructure the business, or liquidate the business

Front 14

What is the BCG Matrix ?

Back 14

BCG Matrix (Boston consulting group):

Assesses each business entity based on 1) current market share and 2) anticipated growth rate

Classifications:

(Invest in) Stars = high MS high growth

(Milk) Cash Cows = high MS, low growth

(Sell/liquidate) Dogs = low MS, low growth

(Sell off) '?' Mark = Low MS, high growth

Front 15

What is Michael Porter's 5 Competitive Strategies?

Back 15

Porter's 5 Competitive Strategies:

- focus on a strategy that will provide a competitive edge for the product/service/business

- products, services, and divisions may have different competitive strategies in the same organization depending on their markets

5 Competitive Strategies:

1. Low Cost

^ Walmart

2. Broad scope, differentiation + premium pricing

^ Starbucks

3. Best Cost + upscale differentiation

^ IKEA

4. Focused + lower cost

^ Greyhound

5. Focused, differentiation + premium pricing

^ Bugatti

Front 16

What are the key factors in Porter's Model?

Back 16

Key factors of Porter's Model:

1. Cost (low vs premium)

2. Product/Service

3. Scope (narrow vs. broad)

4. Focus (target market)

5. Differentiation (unique features)