MGT300 Exam 1 Study Guide

Module 1: What is Management?

 Management: pursuit of organizational goals efficiently and effectively by connecting people to the
environment, purpose, people, and right resources to achieve productivity and results
 Manager’s Job: lead organization and motivate subordinates toward goals
 Manager’s Responsibility: lead organization and motivate subordinates ethically
 Managers vs Leaders
o Managers control risk vs leaders take risk
o Managers create goals vs leaders create vision
o Managers imitate behaviors vs leaders act as themselves
o Managers work with individuals on goals vs leaders working across the organization to build trust and
loyalty
 Organization: group of individuals working in structure to achieve goals
 For-profit Organization: all goals lead to making money
 Non-profit Organization: goal is to serve the greater good
 Four Functions of Management
o Planning: managers determine course of action based on vision, mission, goals
o Organizing: managers coordinate activities and resources to be effective and efficient
o Leading: managers supervise and motivate people
o Controlling: managers monitor and evaluate activities
 Managerial Factors: contribute to or measure success of management
o Organizational Performance: focus on setting and attaining goals while maximizing use of resources
 Depends on management’s ability to utilize resources effectively and efficiently
o Resources: possessions combined and utilized to gain competitive advantages
 Provide strength when used effectively and efficiently
o Effectiveness: managers who choose correct goals, strategies, objectives
 Help workers set appropriate goals and do whatever is needy ethically
o Efficiency: maximizing the value of resources to produce a given output
 Upper-Level Manager: develop the mission, vision, and strategy for entire organization
 Middle-Level Manager: responsible for interpreting and implementing policies and coordinating activities of
lower-level managers
o Considered to be “jack of all trades”
 Lower-Level Manager: supervise and coordinate activities of non-managerial employees
o Front line that customers and employees interact with
 Glass ceiling: metaphorical, invisible barrier that prevents women and minorities from gaining equal access to
top managerial positions
 Managerial Skills
o Technical: level of ability manager possesses to perform subordinates’ duties
o Adaptation: ability to be flexible, remain calm, and spear in control regardless of situation
o Interpersonal/Interactional: ability to lead and motivate individuals, coordinate groups or teams toward
achieving goals
o Conceptual: the ability to see the “big picture” and overall scheme
o Diagnostic: ability to identify, react to, analyze, solve problems that arise daily
o Political: ability to amass a power base, improve status and position in hierarchy, network effectively
o *Human/Interpersonal/Interactional: ability to interact well with people
 Henry Mintzberg: sought to find what managers actually did
MGT300 Exam 1 Study Guide
o Management filled with hard work, long hours, wide variety of unplanned activities
 *Katz: concluded three basic skills needed for successful management
o Technical, conceptual, human/interpersonal/interactional
 Interpersonal Roles: effectively communicate and interact with others
o Figurehead: symbolic head of organization that is visible and represents the company
o Leader: sets goals and is responsible for their achievement by motivating members to complete tasks
o Liaison: act as bridge between groups inside and outside and link groups together to develop alliances
 Informational Roles: effectively acquire and deliver accurate info
o Disseminator: deliver info regarding polices, initiatives, strategies, and lets everyone know what’s going
on
o Monitor: on top of current situations through material gathered from various sources to stay in loop
o Spokesperson: communicate in behalf of organization at meetings, functions, events
 Decisional Roles: effectively solve problems
o Disturbance Handler: resolves conflict, responds to unpredictable situations, solves problems that
could derail goals
o Entrepreneur: constantly seeking new opportunities to provide viable revenue streams and champions
innovation, change, and development
o Negotiator: continually discusses and mediates with groups both inside and outside to reach
agreements and compromises that benefit organization
o Resource Allocator: distributes limited resources to various groups in organization
 Experience-Only: “thrown into fire,” overwhelmed and lose confidence, hard to get started, promoted slower
 Education-Only: internships give “foot in the door,” hard to get started, easy once they have experience too
 Assessing Managers’ Value: evaluated on how well they contribute to organizations overall success
 Understanding Management History
o Helps demonstrate various perspectives of managerial thought
o Provides basis for learning organization policies and practices
o Provides broad base of ideas they can draw from to deal with managerial challenges
 Domestic System of Production: system of small-scale production where work is done by hand, often by family
members in their own homes, or in local workrooms
 Industrial Revolution: where the modern view of management came from
o Steam engine, cotton gin, telegraph, telephone, incandescent light bulb, airplane, Model T Ford
assembly line
 Product Innovation
o Technology: using technology to accomplish work once done by hand by workers
o Electricity: harnessing electricity to provide lighting, power equipment, extend work hours
o Assembly Line: introducing the concept of an assembly line, which sped up manufacturing process
 Transportation Innovation
o Steam Technology: enabled companies to ship products to distant locations
o US Railroad System: major transportation so businesses broaden customer basis and increase sales
o Automobile: allowed workers to live farther away from work
o Airplanes: allowed products and people to move more quickly to distant locations
 Communication Innovation
o Morse Code: system of dots and dashes that could be transmitted electronically using telegraph
o Telegraph: coordinate multiple business units over large distances in a timely manner
o Telephone: allowed exchange of verbal language in a give-and-take manner
o Wireless Technology: used to send messages via morse code over radio waves
MGT300 Exam 1 Study Guide
 Factory Emergence
o More output per worker so cost per unit decreased
o Limited oversight, rules, laws regarding conditions and safety
o Challenge to manage large groups of people
o Nepotism: favoritism hiring and making decisions in favor of family rather than qualified applicants
 Scientific Management: examine work tasks and tools to identify changes that could be made to increase
employee productivity and well-being and has four principles
o *One Best Way: replace “rule of thumb” with scientific methods
o *Standardization: select workers with right abilities then teach, train, develop
o *Incentive Pay: management/worker cooperation ensures work done according to principles
o *Division of Labor: manager plans, prepares, inspects (50%) and worker does the actual work (50%)
 Frederick Taylor: reliance on scientific methods to maximize employee productivity
o Shoveling pig iron study to identify optimal shoveling method for everyone to use
o *Soldiering: workers underachieve to protect each other or themselves
 Lillian and Frank Gilbreth: maximized efficiency to enhance employee performance and company profit
o *Micro-motion technique broke job down into parts, nicknamed therblig
o Must be one single optimal method for maximum efficiency
 Administrative and Bureaucratic Perspective: organizations can be understood and managed from top down
by focusing on structure and quality of management functions
 Max Weber: studies organizations, what they were, how they worked, why they were set up that way
o Traditional Authority: owed to the person in a position of power because they have inherited the post
rather than obeying rules
o Charismatic Authority: based on virtue of personal trust I leader, heroism, exemplary qualities of leader
o Rational-Legal Authority: based on law—the impersonal order of a person in a position of authority
within the defined area of legitimate power
 Continuous organization of official functions bound by rules
 Specified sphere of competence based on principles of division of labor, allocation of authority,
enforcements for role performance
 Follow principle of hierarchy where each lower office is supervised by higher office
 Rules that regulate conduct may be technical rules or norms with specialized training required
 Officials should not be owners of company property
 Incumbents cannot use office position for personal gain
 Admin acts, decisions, rules are formulated and recorded in writing even in oral situations
 Henri Fayol: articulated primary functions that successful managers used
o Forecasting and planning, organizing, commanding, coordinating and leading, controlling
o 14 principles of management: division of labor, authority, discipline, unity of command, unity of
direction, subordination or individual interest to the general interest, remuneration of personnel,
centralization, scalar chain/line of authority, order, equity, stability of tenure personnel, initiative, esprit
de corps
o Encourage understanding of principles for managers to apply in different situations
 Human Relations Perspective: recognizes and incorporates reality and complexity of human behavior and
social relationships that exist within organizations
 Munsterberg: examined individual differences had implications for work-related processes and outcomes
 Parker Follett: focus on interaction of management and workers and a need to adopt a holistic or total view
 Hawthorne Studies: series of studies completed by Elton Mayo and Fritz Roethlisberger and colleagues
o Illumination Study: see if lighting made a difference in productivity
 Lighting did not matter but employees more productive due to attention
MGT300 Exam 1 Study Guide
o Hawthorne Effect: changes in behavior solely as a function of the individual’s awareness of being
observed by others
o Relay Assembly Room Study: see if variation in workplace made a difference in productivity
 Employees valued participation and cooperation and groups led to higher productivity
 More productive when unsupervised, had authority over themselves, share info together
o Bank Wiring Study: see if individual incentives impacted group activity
 Working group as a whole determined level of output due to group pressure and norms
 Management Science: sophisticated mathematical and statistical models to account for multitude of variables
in order to improve decisions in organizations
 Total Quality Management (TQM): approach to organizational management that strives for continuous
improvement and enhancement of quality
 W. Edwards Deming: used 14 principles relating to TQM to rebuild and help businesses
o Create consistency of purpose, adopt new philosophy, cease dependence on mass inspection, end
practice of awarding business on price alone, improve constantly and forever the system of production
and service, institute training on the job, institute leadership, drive out fear, break down barriers
between staff areas, eliminate slogans/exhortations/targets, eliminate numerical quotas, remove
barriers to pride in workmanship, institute vigorous program of education and retraining, take action to
accomplish transformation
 Joseph Juran: trilogy to highlight need to think about quality from several points of view
o Quality planning, quality control, quality improvement
o Employees should exercise authority when outcomes or processes are out of acceptable standard
 Systems perspective: recognizes organizations function in an environment that must be considered when
making decisions
o Inputs -> organizational transformation process -> outputs -> feedback -> repeat
 Douglas McGregor: different approaches managing grounded in different theories for what motivates people
o Theory X: assumes people don’t like to work and need to be directed and controlled
o Theory Y: assumes people are interested in work and flourish with responsibilities and participation
o Theory Y viewed as superior to theory X
 Contingency Theories: suggest effectiveness of managerial policy, practice, behavior depends on factors such
as work being done, so neither X or Y is always correct
 *Learning Organization: actively creates, acquires, transfers knowledge within itself and modifies behaviors to
reflect new knowledge; named by Peter Senge
 Knowledge Management: management’s efforts to leverage info and intellectual capital within organizations
o Human Capital: knowledge people hold
o Social Capital: knowledge shared among individuals in groups or organization
o Organizational Capital: knowledge from routines, databases, patents, manuals, structures, processes
o Knowledge Workers: employees rely on their knowledge with others to make job-related contributions
 When they quit, knowledge leaves with them
o Explicit Knowledge: easy to understand and share and learned from textbooks
o Tactic Knowledge: difficult to express and learned from experience
 Project Management: process of managing work-related project from its inception to conclusion
o Initiation -> planning/design -> execution -> monitor/control -> completion/disbandment

Module 2: The Organizational Environment

 Organizational Environment: factors, forces, groups both inside and outside an organization that impact
everyday activities
MGT300 Exam 1 Study Guide
 Internal Environment: elements occur within organization, such as strategy, culture, technology, policies,
procedures, intellectual capital
o Quality of strategy determined by ability to recognize opportunities and threats and leverage strengths
 External Environment: factors, forces, groups outside boundary of organization that impact everyday activities
such as government policies and social trends
 Task Environment: group of sectors that directly and immediately impact the organization and influence its
decision making on a daily basis
o Customers, suppliers and distributers, competitors, government, social interest groups, local
communities, strategic partners, mass media
 General Environment: forces have indirect effect on bot organizational and task environment
o Influenced by political, legal, ethical, technological, demographic, sociocultural, global forces
o Current business enviroment
 Supply Chain Management: control and coordination of inventory through transportation and logistics
 Special Interest Groups: advocate for assortment of issues that members strongly believe
 Union Security Agreement: forces new members of an organization to join a union
 Right-to-Work Laws: forbidding union security agreements, disallowing union membership as a requirement
o Union participation and strength much lower and impact on organizations decreased
 Geographic Cluster/Agglomerations: group of similar organizations located close to each other to enhance
specialization of a particular region
 General Environment: forces that have an indirect effect on both organization and its task environment
o Political, legal, ethical, technological, demographic, sociocultural, global forces, special interest groups
 Environmental Analysis Methods: used to help predict strategic direction of competitors and industry
o Buffering: absorbing uncertainty from an organization’s environment so it can perform efficiently
o Boundary Spanning: scanning environment to detect info organizations believe to be important
 Business Intelligence: using complex software programs to gather and analyze large amounts of
internal and external data to detect patterns or trends
o Forecasting: trying to predict what will happen in the future
 Quantitative Forecasting: using numerical data from past performance to predict future
 Qualitative Forecasting: subjective methods tend to focus on expert judgements and opinions
 Analytics: used to detect patterns
o Benchmarking: making comparisons between organizations performance and competitors performance
 Factors That Affect Organizational Environment: financial crises, terrorist activities, social networking issues,
lapses in ethical judgement, sustainability concerns, shifts in modes of communication and info, e-commerce,
outsourcing, offshoring, shifts in economic power and status
 Gig Economy: labor market characterized by temporary and freelance contract work instead of permanent jobs
 Outsourcing: organization contracting work to external source to do part of operations
 Offshoring: basing part of company’s operations overseas, but still in charge of operational process
 Ethics: code of moral principles that governs whether behavior is right or wrong
o Reflect shared values held in specific community
o Individuals not born with understanding of shared ethical makeup, but born into societal ethical system
and learn as they grow and mature
 Ethical Egoism: right behavior is one that creates the greatest good for individual
o
 Utilitarian Approach: people should do what creates the best benefit for greatest number of people
o Act Utilitarianism: focus on actions that result in greatest good for people (situational ethics)
o Rule Utilitarianism: consider general rule that results in greatest good for people (broad ethics)
 Moral-Rights Approach: equal respect must be given to all people regardless if results in greater consequences
MGT300 Exam 1 Study Guide
 Categorical Imperative: person should consistently take same morally right action, no matter consequences
 Relativist Perspective: multiple approaches to ethical behavior based on different cultural norms
 Virtue Ethics: focuses on individuals and their character traits and asks “what would an ethical person do?”
 Justice Approach: grounded in notion of equality and fairness
o Divided into distributive and procedural types
 Distributive Justice: individual perceptions of fairness of outcomes people receive for what they do
 Procedural Justice: perception of fairness in procedures used to make organizational decisions
 Ethical Decision-Making Model (EDM): four-step process to assist individuals making moral decisions
o Moral Awareness: recognition that a person’s response to a specific situation could affect their
interests and others in beneficial or harmful ways and a moral perspective is valid
o Moral Judgement: person’s ability to generate and assess options to deal with a situation that is raising
moral awareness by considering choices and potential consequences to determine ethical action
o Moral Motivation: person’s intention or commitment to take action considered ethical in nature over
other competing interests or other values
o Moral Behavior: person’s ability to act in a manner consistent with an ethical course of action and
follow through with an ethical decision
 Moral Intensity: degree to which a person views a specific situation as an ethical issue
o Magnitude of Consequences: degree of harm or good an individual may experience based on decision
maker’s actions
o Social Consequences: degree of agreement in a social group that decision maker’s potential actions are
good or bad
o Probability of Effect: probability the act will take place and whether it will cause harm or benefit
o Temporal Immediacy: length of time from the decision maker’s action to the consequences experienced
by others
o Proximity: how close the decision maker is to those affected by his or her actions
o Concentration of Effect: number of people affected by the decision maker’s actions
 Cognitive Moral Development: identifies six stages individuals go through to develop moral reasoning
o Developed by Lawrence Kohlberg
o Preconventional: individuals primarily focused on self-interest or personal consequence
 Obedience and punishment—avoiding punishment
 Instrumental purpose and exchange—compliance when it is beneficial to do so
o Conventional: expands to include considerations of others
 Interpersonal accord, conformity, mutual expectations—living up to what is expected by people
close to you
 Social accord and system maintenance—meeting duties and obligations that you agreed to
o Postconventional/Principled: focuses on what is right according to values or principles
 Social contract and individual rights—considering the rules of the group and what is right in the
social setting
 Universal ethical principles—following self-chosen ethical principles
 Locus of Control: individuals believe they have control over events in their lives
o Internal Control: person believes outcomes are result of one’s own efforts and will do what they think is
right when it comes to ethical behavior
o External Control: person believes outcomes in life are beyond their control and based on fate or luck
and may be hesitant to take responsibility or make decisions
 Organizational Reward Systems
o Incentives and discipline in organizations influence employees to act in good ways and bad
o Some employees are willing to engage in unethical behavior to reach their goals
MGT300 Exam 1 Study Guide
o Employees’ awareness of punishment for unethical conduct will influence their behavior
 Organizational Culture
o A company’s culture may contribute to an individual’s moral development
o Employees observing others being rewarded or punished for specific actions will influence their own
behavior
o Some companies develop a code of ethics, which is a written statement that delineates the rules of
conduct expected within the organization
 Ethical Leaders
o Create a vision by setting the general direction for the organization
o Align organization members with their vision through communications that motivate and inspire
o May not be actual managers within the organization but key employees who can step up and help
others align with a company’s overall vision and values
 Whistleblower: person who reports misconduct by an organization or other employees to the public or a
higher authority
 Code of Ethics: formal statement of expected behavior that serves as the rules of conduct in an organization
 Corporate social responsibility (CSR): conducting business activities with a focus on financial success as well as
engaging in ethical behavior that helps society and the environment
 Carroll’s Pyramid: CSR must be framed to embrace entire spectrum of social responsibilities
o Philanthropic Responsibilities: act as a good corporate citizen and contribute to community
o Ethical Responsibilities: avoid harm ad do what is right
o Legal Responsibilities: obey the law and play by the rules
o Economic Responsibilities: be profitable because it is the entire foundation of responsibilities
 Globalization: increased interaction and integration of nations economically, politically, socially, and culturally
 Home Country: country in which parent organization is headquartered
 Host Country: country in which an organization operates a facility or conducts other business activities
 Expatriates: employees assigned to work in another country
 Third Country Nationals: employee from a country other than the home country or the host country
 Multinational Corporations (MNCs): companies that build factories and sell products in different countries
o eg) General Motors, Sony
 Multinational Enterprises (MNEs): companies that sell their services in a number of different countries
o eg) Carnival Cruise Line, Lloyd’s of London
 Non-Governmental Organization (NGO): non-profit organizations that function independently of any
government and serve the world’s population
o eg) American Red Cross, Greenpeace, Doctors Without Boarders
 PESTLE Analysis:
o Political: government policies or actions could impact a company’s profitability should it decide to do
business in a specific country
o Economic: level of business development within the country and how it relates to the country’s overall
financial stability
o Sociocultural: values, attitudes, beliefs that shape behavior and preferences of a particular population
o Technological: application of knowledge and expertise that will turn inputs into outputs and improve
systematic processes in an organization
o Legal: laws and regulations that affect business operations in a specific country
o Environmental: infrastructure, ecological, geographic, characteristics of a specific country that will
hinder or encourage companies to expand business operation to this location
MGT300 Exam 1 Study Guide
 Franchising: companies provide foreign businesses with a complete package of materials and services to use in
exchange for a fee
 Joint Venture: business entity created by two+ parties and share ownership and responsibility of new entity
 Wholly Owned Foreign Subsidiary: parent organization owns 100% of subsidiary’s stock
 Greenfield Venture: foreign subsidiary that a parent company builds from scratch rather than buys from
another company
 Factors that Influence Global Business
o Technology: development of the internet, social media, worldwide networks has increased the
opportunity for companies to expand their business across national borders
o Shifting Ideologies: shifts in political and cultural ideologies in various countries have allowed
companies to expand their global footprint and help local economies
o Terrorism: analysis of premeditated threats or violence helps companies decide whether to do business
in certain high-risk locations
o Trade Pacts and Alliances: creation of trade agreements among various countries has reduced or
eliminated tariffs which has increased opportunities for global business
 European Union: sought to eliminate tariffs between member-countries, ratify single currency across region
 NAFTA: allowed flow of goods, capital, labor, services across boarder, and sought to remove about 99% of all
tariffs across US, Canada, Mexico
 APEC: sought to establish new markets for agricultural products and reduce or eliminate tariffs and quotas
 OPEC: coordinate and unify petroleum policies to stabilize oil markets and securing consistent supply
 Cultural Characteristics
o Shared: culture is common among a group of people in specific society
o Learned: people born into specific culture that shapes their views and behavior as they experience life
o Patterned: every action, rite, belief, and ritual within specific culture can be understood by members
o Transgenerational: teachings, stories, rites, rituals within culture passed from generation to generation
o Adaptive: changes within specific culture brought about by external forces, such as technology
o Symbolic: flags, statues, monuments that commemorate a society’s trials, tribulations, successes,
failures are crucial to “telling the story” of a particular culture
 Monochronic Culture: do only one thing at a time, complete task, move on to next activity
o Schedule for day is primary concern, disrespectful to be late for meetings
 Polychronic Culture: participate in many activities at same time
o Completing specific activity is less important than tending to all
o Primary concern building lifetime relationships is just as important as completing single task
 Self-Reference Criterion: own culture creates blinders that make it impossible to understand other cultures
o Form of empathy and ignorance
 Ethnocentrism: tendency to judge another culture based on perceptions found in ones own culture
o Built around arrogance and “my way is the best way”
 Parochialism: tendency to be narrow-minded on specific topics due to lack of interest in learning about them
o Predicted on ignorance and lack of interest
 Hofstede’s Cultural Dimensions
o Individualism: people look after themselves and their immediate family
o Collectivism: people in certain cultures subordinate their own needs for the greater good of group
o Power Distance: degree to which people accept unequal distribution of power
o Masculinity: stands for aggressiveness, assertiveness, materialism, empathy
o Femininity: stands for value, quality of relationships, passivity
o Uncertainty Avoidance: culture’s comfort level with risk and ambiguous situations
MGT300 Exam 1 Study Guide
 The GLOBE Project: re-evaluate Hofstede’s work and maybe replace it
o Assertiveness, future orientation, gender differentiation, uncertainty avoidance, power distance,
collectivism/societal, in-group collectivism, performance orientation, humane orientation
 Stereotype: preconceived notion about an individual or group of individuals
o Does not take into account heterogeneity/differences within a group
o Subconscious: stereotype you don’t even know you have, which is worst kind to have
 Ethnocentric approach: home country national managers because they understand innerworkings
 Polycentric Approach: host country national managers because they know local culture and markets
 Regiocentric Approach: overseas management because they understand US company and familiar with region
 Geocentric Approach: best manager for position no matter where they are from
 Expatriate Selection: select expatriate managers with job factors, cultural skills, family situation, language
skills, motivational state
 Cross-Cultural Training: training expatriates to help them learn useful skills
 Culture Shock: feeling anxiety when not knowing how to behave or act in new surroundings
o Stage 1: Honeymoon: excitement about new assignment and lasts about 6 months
o Stage 2: Irritation and Hostility: crisis stage where problems begin to arise and homesickness occurs
and many quit or can last up to 4 years
o Stage 3: Gradual Adjustment: begin to understand new culture and accept positives of new life
o Stage 4: Biculturalism: accepts culture, new life, and can function effectively in both cultures