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45 Cards in this Set

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  • Back
Primacy of Planning
planning must occur before other management functions can take place.
planning process
developing the organization's
mission
goals
solutions/strategies/ alternative course of action.
hierarchy of plans
idea that planning is top-down--it progresses from an generalized overall plan to more specific and detailed plans.
mission
--and sets an overall purpose for the organization.
strategic planning
. In this stage is where a broad idea of how to achieve the set goals is determined.
eight Key Results Areas
(Peter Drucker)
market share
productivity
profitability
innovation
resources
worker performance
manager performance
social responsibility

MPPIRWMS
MY PROBLEMS PERSIST IF RIGHT WINGS MISS SHOTS. (DRUNK)
Market share
business's percentage of total sales for a region.
Productivity
the output divided by input.

The more efficient a company is, the more output (products, services) it generates for less input (labor, capital, resources).
Profitability
benefit resulting from an activity
Innovation
the development of new products and services.
Theory X
views man as lazy and wanting to do as little as possible, and needing external threats or incentives to work
Theory Y
sees motivation as internal, and goes along with Maslow's Need Hierarchy theory for sources of motivation for employees.
Strategic planning
known as long-range planning

Strategic planning is the responsibility of the highest levels of management.
Operational planning
the detailed plans are made on how to execute the strategic plans

Responsibility is assigned
Management by objectives
an employee's performance is determined by how well he achieves a number of set objectives.

management does not necessarily tell the employee exactly what to do, just what to accomplish.
Standing plans
include rules, procedures, and policies--plans that are always in effect.
budget
a plan for the use of resources and expected results, usually based on a specific time period

a type of single-use plan

defines use of resources.
Single-use plans
include programs, projects, and budgets.
mechanistic form of organization
it is centralized, hierarchical, guided by rules and written procedures, with highly specialized jobs.

(bureaucracy)
organic organization
it is more informal, less hierarchically structured, and has less rigid specialization.
program
a single-use plan which usually covers a specific time period.
rolling plan
is a variant of a single-use plan--it involves a long term plan which is updated at regular intervals
Forecasting
the practice of trying to anticipate the future environment to help in planning--it comes early or at the beginning of the planning process
Technological forecasting
involves predicting the state of technology in the future.
Delphi Method.
One of the popular approaches to technological forecasting developed by the RAND Corporation.
Sales forecasting
probably the most important for operational planning.

a company tries to predict the demand for its products or services, is often most directly involved in operational and production planning.
market research
where customers are questioned, and their answers are used to forecast demand
Herbert Simon defined three phases in decision-making
intelligence
design
choice

IDC-i didnt c simon
Intelligence
involves gathering knowledge to base decisions on
Design
involves listing the possible courses of action
Choice
where a course of action is chosen
Line Authority
the authority that managers exercise over their immediate subordinates, and corresponds directly to the chain of command.
decision-making 2 parts
Problem-solving-where the problem is defined,possible courses of action are identified.

decision making
brainstorming
where the goal is to come up with as many ideas as possible, whether you consider them good or not.
Groupthink
occurs when members of a group think similarly and conform to each other's views, often at the expense of ignoring reality. It usually results in decisions being made from a narrow point of view. Members with doubts and alternate ideas do not speak out because dissenting opinions are not tolerated.
Cost-benefit analysis
a comparison of the cost of an activity to its benefits.

The total costs are calculated, and then compared to how much revenue, or other benefit will be gained.
conditions (in decision making)
conditions are based on the probability of the result. If the probability is 1.0 which means 100% chance, then it is a "certainty." In "risk," the probability is from 0 to 1.0 and is known or based on an estimate. In "uncertainty," the probability is unknown and cannot be estimated.
Payoff Matrix
table allows you to compare the possible benefits of different strategies, taking into account various environmental conditions. A Payoff Matrix has three columns--strategies (or courses of action), states of nature (environmental conditions), and total expected value (basically an "average" payoff for that strategy).
Break-even charts
show the amount of sales at which the business will start making a profit. A break-even chart shows the point where you strike even--your costs are equal to your revenue. Using a break-even chart allows you to easily see how much profit or loss a certain number of sales equates to.
strategic plans
which are long-term plans, do not have a standard time-frame, although they generally cover a period of more than one year into the future. The length of the period depends on how accurate the forecasting of the future business environment proves to be.
Administrative Man Theory (Simon)
Economic Man
knows everything and therefore can make the perfect decision. In reality, no decision maker can fit the economic man profile.

uses the strategy of optimizing, or finding the best possible choice.
Administrative Man Theory (simon)
the administrative man
man has limited knowledge of the choices and their consequences, and chooses the first option that meets his criteria. This describes the administrative man. In contrast to the economic man, the administrative man does not know everything--he cannot find the perfect answer, he chooses what meets the criteria.

uses the strategy of satisficing, or choosing the first choice which meets his criteria.
Herbert Simon's bounded rationality theory,
individuals pick the first choice that meets a predetermined acceptance criteria. The ability to consider only some of the alternatives, or only some of the information required to evaluate a possible course of action is called bounded rationality.

people have limited cognitive abilities and often have to deal with an overwhelming amount of information. Consequently they tend to take cognitive shortcuts when making decisions.
Herbert Simon
came up with the Administrative Man Model of decision-making and the 3 phases of decision making (intelligence, design, and choice). Herbert Simon was the Nobel Prize winner who developed these two concepts.
Peter Drucker
the Eight Key Results Areas and the Management by Objectives approach.