MGMT 371 --- Principles of Management

Management Test 2 QuestionsChapters 5, 6, 8, & 9

1. What was Milton Friedman's perspective? Classical view of social responsibility 2. How is the classical view described? The view that management's only social responsibility is to maximize profits 3. Define social obligation? When a firm engages in social actions because of its obligation to meet certain economic and legal responsibilities 4. Define social responsiveness? When a firm engages in social actions in response to some popular social need 5. Define social responsibility? A business's intention, beyond its legal and economic obligations, to do the right things and act in ways that are good for society 6. What are Carroll's four responsibilities? 1. Economic (must do) 2. Legal (have to do)3. Ethical (should do) 4. Discretionary (might do)

7. What are the different approaches to social responsibility? 1. Obstructionist approach 2. Defensive approach 3. Accommodative approach 4. Proactive approach 8. Define obstructionist approach? Managers decide not to act in a socially responsible way and try to hide their behavior from others 9. Define defensive approach?Managers act within the law but only do what the law requires 10. Define accommodative approach?Managers try to balance the needs of different stakeholder groups against one another 11. Define proactive approach? Companies go out of their way to learn the needs of the different stakeholder groups 12. Does social responsibility pay? Studies appear to show a positive relationship between social involvement and the economic performance of firms. A general conclusion A firm's social actions do not harm its long-term performance 13. Green management? Managers consider the impact of their organization on the natural environment 14. How do organizations go green? 1. Legal (or light green) approach 2. Market approach 3. Stakeholder approach 4. Activist approach 15. Define the legal approach? Firms simply do what is legally required by obeying laws, rules, and regulations willingly and without legal challenge 16. Define the market approach? Firms respond to the preferences of their customers for environmentally friendly products 17. Define the stakeholder approach? Firms work to meet the environmental demands of multiple stakeholders 1. Employees 2. Suppliers 3. The community 18. Define the activist approach? Firms look for ways to respect and preserve environment and be actively socially responsible 19. How do companies evaluate green management? Using the sustainability reporting guidelines to document green actions, adopting ISO 14000 standards for environmental management 20. Define social entrepreneur? An individual or organization who seeks out opportunities to improve society by using practical, innovative, and sustainable approaches 21. Define corporate philanthropy? 1. Campaigns 2. Donations 3. Funding own foundations 22. Employee volunteering efforts? 1. Team volunteering 2. Individual volunteering during work hours 23. Define moral development?A measure of independence from outside influences 24. Levels of individual moral development?1. Preconventional level 2. Conventional level 3. Principled level 25. The stages of moral development interacts with? 1. Individual characteristics 2. The organization's structural design 3. The organization's culture 4. The intensity of the ethical issue 26. Define conventional level? Characterized consideration of society's values External code of conduct 27. Define Preconventional level?Characterized by a concern for self 1. Personal interest 2. Avoidance of punishment 28. Define principled level?Characterized by adherence to internal moral code (self-chosen ethical principles) Universal values 29. Define moral relativism?Morality is relative to some personal, social, or cultural standard and there is no method for deciding whether one decision is better than another 30. What is the importance of the ethical issue? Issue intensity 31. Are ethical standards universal? Why or why not?No, social and cultural differences 32. Name the policy that effects ethics in an international context?Foreign corrupt practices act, the global compact 33. What is a decision? A choice among two or more alternatives 34. Step 1 in the decision making process?Identifying a problem 35. Step 2 in the decision making process? Identifying decision criteria 36. Step 3 in the decision making process?Allocating weights to the criteria 37. Step 4 in the decision making process?Developing alternatives 38. Step 5 in the decision making process? Analyzing alternatives 39. Step 6 in the decision making process?Selecting an alternative 40. Step 7 in the decision making process?Implementing the alternative 41. Step 8 in the decision making process?Evaluating the decision's effectiveness 42. Define problem?A discrepancy between an existing and desired state of affairs 43. When does a problem become a problem? When a manger becomes aware of it 44. How does a manager solve a problem? They must have the authority, information, or resources necessary 45. What is decision criteria? Factors that are important (relevant) to resolving the problem 46. Examples of decision criteria? 1. Cost that will be incurred 2. Risks likely to be encountered 3. Outcomes that are desired 47. What does allocating weights to the criteria mean? Decision criteria are not of equal importance, assigning a weight to each item places the items in the correct priority order 48. How to analyze alternatives? Each one's strengths and weaknesses 49. How to select alternatives?The alternative with the highest total weight is chosen 50. How to evaluate the decision's effectiveness?Judge by the outcomes 51. Define rationality?Describes choices that are logical and consistent and maximize value 52. Define bounded rationality? Managers make decisions rationally, but are limited by their ability to process information

53. Why are bounded rationality decisions made? Decision makers don't seek out or have knowledge of all alternatives, or satisfice? 54. Define satisfice? Choose the first alternative encountered that satisfactorily solves the problem 55. Define escalation of commitment?An increased commitment to a previous decision despite evidence it may have been wrong 56. Define intuitive decision making?Making decisions on the basis of experience, feelings, and accumulated judgment 57. Define evidence based management? The systematic use of the best available evidence to improve management practice 58. What are the types problems and decisions? 1. Structured Problems2. Unstructured problems 3. Programmed decisions4. Non-programmed decisions 59. Structured problems? Involve goals that are clear, are familiar (occurred before) and are easily and completely defined

60. Programmed decision? A repetitive decision that can be handled by a routine approach 61. What are the types of programmed decisions? 1. Procedure2. Rule 3. Policy 62. Procedure programmed decision?A series of interrelated steps that a manager can use to respond (applying a policy) to a structured problem 63. Rule programmed decision? An explicit statement that limits what a manager or employee can or cannot do64. Policy programmed decision? A general guideline for making a decision about a structured problem 65. Define unstructured problems? Problems that are new or unusual and for which information is ambiguous or incomplete, require custom-made solutions 66. Define nonprogrammer decisions? Decisions that are unique and nonrecurring, generate unique responses 67. What are the types of decision making conditions? Certainty and risk 68. Define certainty? A situation in which a manager can make an accurate decision because the outcome of every alternative choice is known 69. Define risk?A situation in which the manager is able to estimate the likelihood of outcomes that result from the choice of particular alternatives 70. Maximax? The optimistic manager's choice to maximize the maximum payoff 71. Maximin?In the pessimistic manager's choice to maximize the minimum payoff 72. Minimax?The manager's choice to minimize maximum regret 73. What are the guidelines for making effective decisions? 1. Understand cultural differences2. Know when it's time to call it quits 3. Use an effective decision making process 74. What are habits of highly reliable organizations (HROs?)?1. Are not tricked by their success 2. Defer to the experts on the front line3. Let unexpected circumstances provide the solution4. Embrace complexity 5. Anticipate limits

75. What is planning? 1. Defining the organization's goals2. Establishing strategies for achieving those goals 3. Developing plans for organizational work activities 76. What is formal planning? 1. Specific goals2. Written and shared 77. Why do managers plan?1. Provides direction 2. Reduces uncertainty 3. Minimizes waste and redundancy4. Sets the standards for controlling 78. What are goals? Desired outcomes, provide direction and performance criteria 79. What are plans? Documents that outline how goals are to be accomplished, describe how resources are to be allocated and establish activity schedules 80. What are the different types of goals? 1. Financial goals 2. Strategic goals 3. Stated goals4. Real goals

81. What are stated goals? Official statements of what an organization says and what it wants its various stakeholders to believe its goals are82. What are real goals? Goals that an organization actually pursues as defined by the actions of its members 83. Types of plans?1. Breadth (strategic/operational) 2. Time frame (long term/short term) 3. Specificity (directional/specific) 4. Frequency of use (singe use/standing) 84. Long term plans? Time frames extending beyond three years 85. Short term plans? Time frames of one year or less 86. Specific plans? Clearly defined and leave no room for interpretation 87. Directional plans? Flexible plans that set out general guidelines and provide focus, yet allow discretion in implementation 88. Single use plans? A onetime plan specifically designed to meet the need of a unique situation 89. Standing plans? Ongoing plans that provide guidance for activities performed repeatedly 90. Traditional goal setting?Goals set by top managers flow down through the organization and become sub goals for each organizational area 91. Management by objectives (MBO)? A process of setting mutually agreed upon goals and using those goals to evaluate employee performance 92. Key elements of MBO? 1. Goal specificity 2. Participative decision making 3. An explicit performance/evaluation period feedback 93. Elements of well written, smart goals? 1. Written in terms of outcomes not actions. 2. Measurable and quantifiable. 3. Clear time frame 4. Written down 5. Communicated 6. Challenging yet attainable 94. Formal planning department? A group of planning specialists whose sole responsibility is helping to write organizational plans

95. Define strategies?Plans for how the organization will do what it's in the business to do, how it will compete successfully, and how it will attract and satisfy its customers to achieve its goals96. Define business model?How a company is going to make money a. Whether customers will value what the company is providing b. Whether the company can make any money doing that 97. Competitive advantage?It is what sets an organization apart, its distinctive edge98. Core competencies? The organization's major value creating capabilities that determine its competitive weapons 99. What is the strategic management process? A six step process that encompasses strategic planning, implementation, and evaluation 100. What is SWOT ANALYSIS? The combined external and internal analyses 1. Strengths 2. Weaknesses 3. Opportunities 4. Threats 101. What is the first step to strategic management process? Identifying the organization's mission, goals, and strategies 102. Step 2 to strategic management process? Doing an external analysis 103. Step 3 to strategic management process? Doing an internal analysis 104. Step 4 to strategic management process? Formulating strategies 105. Step 5 to strategic management process? Implementing strategies 106. Step 6 to strategic management process? Evaluating results 107. Porter's 5 forces model? Five competitive forces that dictate the rules of competition 1. Threat of new entrants 2. Threat of substitutes 3. Bargaining power of buyers 4. Bargaining power of suppliers 5. Current rivalry 108. Corporate strategies include? Multibusiness Corporation

109. Competitive strategies include? Multiple strategic business units 110. Functional strategies include? 1. Research and development 2. Manufacturing3. Marketing 4. Human resources 5. Finance 111. What is the growth strategy of corporate strategies?Seeking to increase the organization's business by expansion into new products and markets 112. Concentration of corporate strategies? Increases products or markets served in primary business 113. Horizontal integration of corporate strategies? Combine with competitors or enter new geographic regions 114. Vertical integration of corporate strategies? Backward or forward on the value chain 115. Diversification of corporate strategies? Related or unrelated industries 116. Define corporate strategy? An organizational strategy that determines what businesses a company is in or wants to be in and what it wants to do with those businesses 117. Stability strategy?A corporate strategy in which an organization continues to do what it is currently doing 118. Renewal strategy? A corporate strategy designed to address declining performance 119. Competitive strategy? An organizational strategy for how an organization will compete in its businesses 120. BCG matrix?A strategy tool that guides resource allocation decisions on the basis of market share and growth rate of SBUs 121. Strategic business units (SBU)? The single independent businesses of an organization that formulate their own competitive strategies 122. Functional strategy?The strategies used by an organizations various functional departments to support the competitive strategy 123. Renewal strategies? Developing strategies to counter organization weaknesses leading to performance decline 124. Cash cows, BCG matrix?1. Low growth rate 2. High market share 125. Stars, BCG matrix?1. High growth rate2. High market share 126. Question marks, BCG matrix?1. High growth rate2. Low market share 127. Dogs, BCG matrix?1. Low growth rate2. Low market share 128. Different types of cost leadership strategies? 1. Cost leadership strategy 2. Differentiation strategy 3. Focus strategy 129. Cost leadership strategy? Seeking to attain the lowest total overall costs relative to other industry competitors130. Differentiation strategy? Attempting to create a unique and distinctive product or service for which customers will pay a premium 131. Focus strategy? Using a cost or differentiation advantage in a particular market segment rather than a larger market

132. First mover advantages? 1. Reputation for being innovative and industry leader 2. Cost and learning benefits 3. Control over access to competitors 4. Customer loyalty 133. First mover disadvantages?1. Uncertainty 2. Risk of competitors imitating innovations 3. Financial/strategic risks 4. High development costs118