Prin Of Management Test 1

Front 1

Division of work

Back 1

specialization in worker job design

Front 2

Authority

Back 2

managers are empowered

Front 3

Discipline

Back 3

formalized controls, workers should be obedient

Front 4

Unity of command

Back 4

subordinates report to only one boss

Front 5

Unity of direction

Back 5

functions have only one plan of action or set of objectives

Front 6

Subordination of the individual

Back 6

employees are committed to the organization

Front 7

Remuneration

Back 7

reasonable pay reward system

Front 8

Centralization

Back 8

trickle down decision-making

Front 9

Scalar chain

Back 9

hierarchical, formal, continuous, communications structure

Front 10

Order

Back 10

everything has a place where it belongs

Front 11

Equity

Back 11

fairness is important in management-employee relations

Front 12

Stability of tenure of personnel

Back 12

train employees and encourage them to remain (turnover is disruptive)

Front 13

Initiative

Back 13

managers conceive and implement new ideas, workers are exhorted to be productive

Front 14

Esprit de corps

Back 14

maintaining high morale among workers is imperative, the need for harmony within organizations is important

Front 15

Frank and Lillian Gilbreth

Back 15

Bricklaying efficiency improvements
Time and motion studies (therbligs)

Front 16

Henry Gantt

Back 16

Incentive compensation systems
Gantt chart for scheduling work operations

Front 17

Taylor’s Four Principles of Management

Back 17

Develop a science for each element of an individual’s work, which replaces the old rule-of-thumb method.

Scientifically select and then train, teach, and develop the worker. (Previously, workers chose their own work and trained themselves as best they could.)

Heartily cooperate with the workers so as to ensure that all work is done in accordance with the principles of the science that has been developed.

Divide work and responsibility almost equally between management and workers. Management takes over all work for which it is better fitted than the workers. (Previously, almost all the work and the greater part of the responsibility were thrown upon the workers.)

Front 18

Mary Parker Follett

Back 18

A political scientist, social worker, and business consultant Follett suggested that organizations function on the principle of power "with" and not power "over." She recognized the holistic nature of community and advanced the idea of "reciprocal relationships" in understanding the dynamic aspects of the individual in relationship to others. Follett advocated the principle of integration, "power sharing." She
advocated of the idea that power and authority derive from function, not the privilege of "office,“.

Front 19

Chester Barnard

Back 19

Saw organizations as social systems that require human interaction and cooperation.

Expressed his views on the “acceptance of authority” in his book The Functions of the Executive (1938).

Legitimacy of the supervisors directives and the extent of employee acceptance – authority flows downward but depends on employee acceptance

Front 20

Abraham Maslow

Back 20

hierarchy of needs

Front 21

Douglas McGregor

Back 21

Theory X, Theory Y

Front 22

Henry Dennison

Back 22

management’s primary purpose is to provide working conditions under which employees would work most readily and effectively

Front 23

Charles McCormick

Back 23

multiple management plan

Front 24

William Given

Back 24

bottom-up management

Front 25

Joseph Scanlon

Back 25

joint management/union committees; group rewards/employee sharing in reduced costs

Front 26

Functional Plans

Back 26

Planning related to a specific business function
Driven by higher level strategic objectives (from strategic plans). Often referred to as cascading objectives.
Functional plans are often interrelated (for examples sales and production planning)
Often shorter planning horizon than strategic plans.
Typically developed by upper levels of middle management but may include participation from lower levels of the organization

Front 27

Tactical Plans

Back 27

Apply to specific parts of the organization.
Tend to cover shorter timeframes – daily, weekly, monthly
Are derived from and must align with strategic and functional objectives (cascade).
Examples:
Production schedules
Sales Call Schedules
Budgets
Daily/Weekly staffing schedules
Are updated frequently
Often developed by lower middle level management and supervisors

Front 28

Contingency Plans

Back 28

Backup Plans in the event of:
Unexpected changes in either the external or internal environments (examples: business disruptions due to natural disasters; a failure in a critical production process; an labor action (strike); a supplier goes out of business; a power failure in a critical data center, etc.

Address the “What Ifs” - incorrect planning assumptions or the realization of known risks

Typically developed to deal with the most critical planning assumptions or risks – for example disaster recovery; failure of a critical supplier, etc.

Should focus on mitigation techniques and recovery activities

Front 29

Corporate Strategy

Back 29

addresses which businesses an organization will be in, how resources will be allocated among those businesses (business units), and how each business will relate to the other. Also sets the “grand strategy” – growth, stability, defensive – for each business unit
Example: General Electric Capital Allocations Across Its Four Major lines of Business

Front 30

Business Strategy

Back 30

focuses on how to compete in a given business. Only one per SBU (Strategic Business Unit)- Fayol Principle # 5
Example: General Motors Develops a 3 Year Plan for its Chevrolet Brand

Front 31

Functional Strategy

Back 31

concerned with the activities of the different functional areas of the organization and the short range methods to be used to help achieve the overall business strategy
Marketing develops a one year product development and roll-out plan that supports the overall business objective of 10% growth in overall revenues.

Front 32

Objectives

Back 32

Statements outlining what the organization is trying to achieve; measures (milestones) for achievement, progress, and performance – may be long-range (strategic) or short-range (operational or tactical). Well developed objectives are specific, measurable, with a fixed timeframe.

Front 33

Management by Objectives (MBO)

Back 33

A MBO (program) is a system in which specific performance objectives are jointly determined by subordinates and their supervisors, progress toward objectives is periodically reviewed, and rewards are allocated on the basis of that progress.

Links individual and unit performance objectives at all levels with overall organizational objectives.

The INTENTION is to motivates rather than to control. Also enables employees to better understand the objectives of their organization and their role in accomplishing those objectives. Individual goals should specific (vs. general),
measurable, difficult but achievable.

Front 34

Porters 5 Forces Model

Back 34

Threat of new entrants

Bargaining power of customers

Bargaining power of suppliers

Threat of substitute

Competitive rivalry within the industry

Front 35

S.W.O.T.

Back 35

Strengths, Weakness, opportunity, threats

Front 36

Strengths (strategic)

Back 36

Internal resources that are available or things that an organization does well.
Core competency: a unique skill or resource that represents a competitive edge

Front 37

Weaknesses

Back 37

Resources that an organization lacks or activities that it
does not do well.

Front 38

Opportunities (strategic)

Back 38

Positive external environmental factors.

Front 39

Threats

Back 39

Negative external environmental factors.

Front 40

Info (look at back)

Back 40

Management analyzes the internal resources of the organization, such as capital, skills of workers, or patents. These resources are the strengths of the organization. The strengths that represent unique skills or resources are called the organization’s distinctive competence. In contrast, weaknesses are resources that are lacking in the organization.
Based on the results of the SWOT analysis, management must complete step six by assessing the opportunities that are available, reevaluating its missions and objectives, and making necessary changes.

Front 41

Growth strategy

Back 41

A strategy in which an organization attempts to increase the level of its operations

Front 42

Stability strategy

Back 42

A strategy that is characterized by an absence of significant change

Front 43

Retrenchment strategy (defensive strategy)

Back 43

A strategy characteristic of a company that is reducing its size, usually in an environment of decline. Sub strategies: Turnaround, Divestiture, Liquidation

Front 44

Combination strategy

Back 44

The simultaneous pursuit by an organization of two or more of growth, stability, and retrenchment strategies.

Front 45

Policy

Back 45

A general guide that establishes parameters for making decisions about recurring problems. (Example: Promote From Within)

Front 46

Procedure

Back 46

A series of interrelated sequential steps that can be used to respond to a well-structured problem (policy implementation). Example: Escalation Processes for Purchase Order Approval Based on $ Amounts

Front 47

Rule

Back 47

An explicit statement that tells managers what they ought or ought not to do (limits on procedural actions). Example: Approve All Customer Returns/Refunds Under $150

Front 48

Rational Model

Back 48

Choices that are consistent and value-maximizing within specified constraints.

Front 49

Bounded Rationality (Herbert Simon)

Back 49

Behavior that is rational within the parameters of a simplified model that captures the essential features of a problem.

Front 50

Availability heuristic

Back 50

The tendency to base judgments on information that is readily available.

Front 51

Representative heuristic

Back 51

The tendency to base judgments of probability on things (objects or events) that are familiar

Front 52

Escalation of commitment

Back 52

An increased commitment to a previous decision
despite negative information about the decision’s
present outcomes.

Front 53

Intuitive (Bias)

Back 53

Managers make decisions based largely on hunches and feelings. Decision-making as an “art”
Fastening on unsubstantiated facts and sticking with them
Pressing every fact into a personal moral pattern
Overlooking everything except what is immediately useful
Having an affinity for “romantic/heroic” stories and finding such information more significant than other kind including hard evidence to the contrary

Outcomes:
Living in the Past
Dominant Logic

Remedies:
Becomes aware of biases and allow for them
Seek independent opinions
Learn to “unlearn”

Front 54

Rational Decision-Making

Back 54

8 step model that optimizes the decision made in response to a problem detected by or presented to the manager

Front 55

Bounded Rationality

Back 55

(Herbert Simon) recognizes constraints to rationality. Managers will develop simplified models of reality (essentially enables them to “wrap their brain around the issue” consistent with their values, time and cost constraints, uncertainty of outcomes and other limiting factors

Front 56

Satisfice

Back 56

“good enough” decision based on first selecting first alternative that sufficiently solves the problem

Front 57

Intuition

Back 57

ability to make sound decisions based on one’s past experience and immediate feelings about the information at hand. A dark side – may ignore information that better fits the situation, living in the past, dominant logic

Front 58

Other Common errors in decision-making

Back 58

heuristics, escalation of commitment

Front 59

Programmed Decisions

Back 59

routine , virtually automatic decision-making established rules and guidelines (rules, procedures, policy, culture)

Front 60

Non-programmed decisions

Back 60

decision-making that occurs in response to unusual, unpredictable opportunities and threats