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Management & Organization Flashcards

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1
Q

Mount Everest Case Key Lessons for managers

A

1) Individuals are subject to cognitive biases that impact performance (overconfidence, sun cost fallacy, recency bias)
2) Groups do well with a sense of psychological safety
3) Organizations can be impacted by factors outside of control

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2
Q

4 Essential principals from Mt Everest Case

A

-Leaders should be led by group needs
-Inaction can sometimes be the most difficult but wisest action
-if your words don’t stick you haven’t spoken
-leading upwards can feel wrong when its right

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3
Q

What is strategy? (quote)

A

“An integrated set of choices that position an organization within its environment to achieve it’s vision over the long term”

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4
Q

Two generic strategies

A

1) differentiation
2) Cost leadership
*) avoid being stuck in the middle

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5
Q

Strategy is in the middle of the diagram. What does internal analysis refer to?

A

1) Goals/values
2) Resources/capabilities
3) Structures/systems

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6
Q

Strategy is in the middle of the diagram. What does external analysis refer to?

A

1) competitors
2) customers
3) suppliers

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7
Q

Strategy within the hierarchy of organization objectives

A

Mission
Vision
Strategy
Tactics

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8
Q

Characteristics of an effective strategy

A

Choice (choosing what to do and what not to do ensures limited resources are focused on important issues)
Clarity (provides coherent sense of what firm is trying to achieve to internal stakeholders and a sense of what the firm offers to external constituents)
Commitment ( sense of direction over long term)
Congruence ( activities supporting strategy are mutually reinforncing)

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9
Q

5 Elements of strategy

A

Arenas
Vehicles
Differentiatiors
Staging
Economic Logic

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10
Q

Arenas (1)

A

What business are we in? which product categories? which market segments? which geographical areas? which value-creation stages?

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11
Q

Vehicles (2)

A

How will we grow and reach our goal? Internal development? Joint ventures? acquisitions? licensing?

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12
Q

Differentiators (3)

A

How will we differentiate from competitors? price? image? custimization? services? styling?
Requires trade-offs to be made, don’t be stuck in the middle

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13
Q

Staging (4)

A

What will be the order and speed of implementing initiatives?
Speed of expansion, choosing whether to expand product line or geographical reach first

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14
Q

Economic Logic (4)

A

How will be obtain returns/ what is our business plan.

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15
Q

External analysis (5 forces that shape strategy)

A

1) threat of new entrants
2) threat of substitutes
3) bargaining power of suppliers
4) bargaining power of buyers
5) industry rivalry

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16
Q

Barriers to entry (1)

A

Warren buffet quote: “the most important thing to me is figuring out how big a moat there is around a business.”
Some reasons for barriers to entry:
1) economies of scale
2) switching costs
3) capital requirements
4) brand loyalty/reputation
5) access to distribution channels
6) government regulation
7) expected retaliation

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17
Q

Substitutes (2)

A

Different products can serve similar needs. These can be from very different industries and thus easy to overlook

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18
Q

Bargaining power of suppliers (3) is large when…

A

-few suppliers
-industry is not particularly important to suppliers
-product is differentiated and thus it is costly for buyers to switch suppliers
-suppliers can threaten to integrate forwards
-there is no substitute

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19
Q

Bargaining power of buyers (4) is large when…

A

-few buyers
-industry products are undifferentiated
-Buyers can threaten to integrate backwards
-buyers face few switching costs when changing vendors

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20
Q

Rivalry among competitors (5) is greatest when…

A

-number of competitors is high
-industry growth is slow
-barriers to exit are high
-rivals are committed beyond just financially
-firms cannot read each others signals well

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21
Q

To neutralize supplier power___
To neutralize buyer power____
To stop rivals from driving down prices___
To scare of new entrants___
To limit threat of substitutes___

A

1) standardize specification for parts so you can easily switch vendors
2) expand range of services so its harder for customers to leave you
3) invest into products highly differentiated from competitors
4) increased fixed costs required to compete like R&D
5) offer better value through wider product accessability

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22
Q

Why within the same industry do some firms outperform others?

A

Look inside for sustained basis of advantage (Internal Analysis: RBV)

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23
Q

Firm Specific Advantages

A

“secret sauce”
-competative advantages a firm has which allows it to succeed in its industry
-could be understanding/access to local markets, unique access to talent, organizational culture.
Ex: Walmart with inventory management; apple with capacity for innovation

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24
Q

Organizational structure (what is it and 5 points)

A

How an organization arranges people/activities to meet goals) (formal organization)
-division of labor
-vertical + horizontal coordination
-reporting relationships
-locus of decision making
-patterns of info flow

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25
Fundamental principle of organizational design
The more differentiation there is, the greater need for integration (coordination across levels and between units)
26
What is integration (in organizational design)
coordination across levels and between units
27
Dimensions of org structure
-specialization -centralization -formalization -chain of command -span of control
28
How does structure affect organizational performance? (roughly)
How effectively information and knowledge flow * How flexible and adaptable an organization is * Level of efficiency and control * Speed and quality of decision making
29
How does structure affect people and interpersonal processes (roughly)
* Impacts quality of communication & coordination - Can intensify or mitigate conflict & politics * Affects employee attitudes and stress
30
Dimensions of organizational structure (5)
Specialization Centralization Formalization Chain of command Span of control
31
Specialization
-process of dividing up the many tasks within an organization -the more tasks are divided into narrowly-defined jobs, the greater the degree of specialization
32
Centralization
extent to which decision making authority is centralized v. spread out
33
Formalization
extent to which an organization relies on rules and procedures
34
Chain of command
-Who reports to who -Formal right to make decisions, issue orders, allocate resources
35
Span of control
-number of employees that report to a given supervisor -narrow (tall) (cost leadership) -wide (flat) (differentiation)
36
Types of org structures (3)
Functional, divisional, combo (matrix)
37
Divisional structure
Departments are formed on the basis of organizational outputs, customer, or geographic groupings as opposed to job roles.
38
Strengths/weaknesses of divisional structure
STRENGTHS * More flexible/adaptable * Better customer service: each unit deals with just one product * Better coordination between departments * Reduced burden on top managers WEAKNESSES * Reduces economies of scale * Can introduce duplication and redundancy * Lack of coordination and increased conflict across divisions * May threaten clarity of org identity
39
Functional structure strengths and weaknesses
STRENGTHS * Efficient - economies of scale * Cultivates specialization WEAKNESSES * Poor inter-function coordination * Slow response to environmental changes * Clunky in large sizes * Overly centralized
40
Combo/matrix structure strengths and weaknesses
-- everyone gets two lines of reporting STRENGTHS * Flexible/adaptable * Provides better information flow, which can improve coordination * Saves on functional resources (e.g. IT and HR) WEAKNESSES * More potential for conflict (e.g. between functional and divisional) * Less efficient: requires more meetings, constant coordination * Two boss problem: can be confusing/frustrating for employees
41
Functional structure
groups employees by specialty, skill, or related roles.
42
Nine tests or organizational design (4/5)
1. market advantage test 2. parenting advantage test 3. people test 4. feasibility test 5. specialist cultures test 6. difficult lines test 7. redundant-hierarchy test 8. accountability test 9. flexibility test
43
4 tests of fit
1. market advantage test -Does your design direct sufficient management attention to your sources of competitive advantage in each market 2. parenting advantage test -does your design help the corporate parent add value to the organization 3. people test - does your design reflect the strengths, weaknesses, and motivations of your people 4. feasibility test - have you taken account of the constraints that may impede the implementation of your design
44
5 tests of good design
1. Specialist cultures test - does your design protect units that need distinct cultures 2. difficult links test -doesyour design provide coordination solutions for problematic links 3. redundant-hierarchy test -does your design have too many parent levels and units 4. accountability test -does your design support effective controls 5. flexibility test -does your design facilitate development of new strats and provide flexibility to adapt to change
45
What is culture? (informal organization)
The set of values, attitudes, beliefs, and expected behaviors shared by members of an organization. -the "personality" of an org
46
Techniques to build culture (RRRPPP)
Reference group affiliation -People identify with those they are organizationally close to Reward system -conformity with expectations is rewarded Role Modeling -Role modeling and mentoring so members learn appropriate behavior Peer Pressure - conform! Performance review - assessed based on conformity with strategy Psychological review
47
Iceberg Model
ARTIFACTS -tangible aspects that can be seen/heard ----physical (dress, objects, layout), verbal (stories, jokes) ----Norms and rules of conduct VALUES (ESPOSED AND ENACTED) -shared statements about good and bad -----shared principals, standards, and goals ------ what is actually prioritized, rewarded, punished ASSUMPTIONS -Taken for granted beliefs about reality/human nature -----often unspoken/out of immediate awareness
48
Functions of organizational culture (3)
Control system -influences decisions and behaviors Social Glue -connects and bonds people Sensemaking -helps people understand what is happening in org and why
49
Hofstede's national cultural dimensions
-power distance -uncertainty avoidance -individualism/collectivism -masculinity/femininity
50
Power Distance
Extent to which less powerful members of organizations accept that power is distributed unequally.
51
Uncertainty avoidance
Extent to which people feel threatened by uncertainty and try to avoid it
52
Individualism / collectivism
Tendency of people to look after themselves/ their family or tendency to belong to groups and to look after each other
53
Masculinity / femininity
Cultural characteristics in which dominant values in society are success/money/things or caring for others/quality of life
54
Cost of strong culture
-Cult-like - unwillingness to question shared values -insulation from outside viewpoints -lack of diverse perspectives
55
Benefit of strong culture
-ability to attract and retain employees -high motivation to achieve vision -competative advantage from employing uniquely skilled/talented people
56
What is leadership
the process of directing, controlling, motivating and inspiring staff toward the realization of stated organizational goals
57
Leadership from three perspectives
Trait theories - assume certain measurable characteristics exist that are unique to leaders Behavioral theories -attend to only observable behaviors and how leaders act Situational approach -emphasizes contextual factors as key
58
Leadership types
Transactional leaders -planning, budgeting, meeting shedules -less people focused, more task focused Charismatic leaders - motivate people, unify them for vision -unlikely to follow through, maybe cult-like Transformational leaders - inspire change and innovation -deal mainly with abstract and intangible things like vision and change
59
Three main functions of a leader
1) deciding on the organizations mission and how to accomplish it (strategy) 2) Generating support for the mission 3) Setting the tone for behavior in the org
60
Leadership v. Management
LEADERSHIP -setting direction -aligning people -providing motivation -build and communicate vision Management -planning and budgeting -organizing and staffing -controlling and solving problems -carrying out vision
61
How to effectively lead
1) modeling 2) get to know your followers 3) framing 4)rhetorical techniques 5) persuasion
62

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