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MGT 3200 Test 2 All Cards
MGT 3200 Test 2 All Cards
122
Management
Undergraduate 2
04/04/2012
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Term
1. Is decision making a function of management?
 Definition
No. Decision-making techniques are applicable and valuable to all management functions.
Term
2. Why do we make decisions as managers?
 Definition
a. To accomplish our goals efficiently. Decisions are means to an end rather than ends in themselves.
To achieve operative goals and overall organizational goals.
Term
3. What’s the difference between programmed and non-programmed decisions?
 Definition
 Programmed decisions- are specific procedures that have been developed for repetitive and routine problems
• Decisions are programmed; a specific procedure has been developed
 Nonprogrammer decisions- are specific to management problems that are novel and unique. They are complex and unstructured
• No established procedure for handling them
• Such decisions deserve special treatment.
Term
4. Do managers make more programmed or non-programmed decisions, in general?
 Definition
a. Programmed
Term
5. What is decision-making under conditions of certainty?
 Definition
 Manager knows all the available alternatives and the outcomes associated with each
 The manager has perfect knowledge about all alternatives and their outcomes
 There is no element of
 Certainty is an ideal situation for managerial decision-making. Under certainty, a manager simply picks the alternative with the best outcome
 Managerial decisions are seldom made under conditions of certainty
Term
6. What is decision-making under conditions of risk?
 Definition
 Decisions under risk are most common
 This condition involves a lack of complete certainty regarding the outcomes of various alternatives, but an awareness of the probabilities associated with their occurrence
 Alternatives are known but outcomes are in doubt
 Example- roll a die you know they are six alternatives but the outcome is in doubt
Term
7. What is decision making under conditions of uncertainty?
 Definition
 Managers don’t know alternatives, their potential outcomes, or the probability of the outcomes occurrence
 These decisions are the most difficult
 Decisions under uncertainty generally occur in cases where there is no historical data available from which to infer probabilities
 The most common case for this type of decision-making involves the introduction of new technology
Term
8. Which decision-making condition is most common? Least common? Most difficult?
 Definition
 Most Common- Risk
 Least Common- Certainty
 Most Difficult- Uncertainty
Term
9. What is the key to making good decisions under risk?
 Definition
 The key element- determining the probabilities associated with each alternative
Term
10. How do programmed/non-programmed decisions and the different decision-making conditions relate?
 Definition
 Certainty- programmed
 Uncertainty- non-programmed
 Risk- can be both
Term
11. What does the traditional economic model assume about decision-makers? (2 assumptions)
 Definition
 Managers seek to maximize benefits (or minimize costs) (“ECONOMIC MAN”)
 Managers are completely rational
 Completely rational and maximize; will select best solution every time
 What we Should do = Prescriptive model
Term
12. Under what decision-making condition do decisions get made in traditional economic model?
 Definition
Certainty
Term
13. What does the behavioral model assume about decision makers?
 Definition
 Bounded rationality and satisfice
 Descriptive (how you actually make decisions)
 Pretty good decision with less time/effort = more efficient
Term
14. What is bounded rationality? What three things bound one’s rationality?
 Definition
 “Administrative Man” possesses bounded rationality
 Managers are unable to grasp the full complexity of managerial decisions due to both their limited mental capacity and emotions, and the uncertainty of future events
 Manager’s rationality is bounded by these three things
• Limited mental capacity
• Emotions
• Unforeseeable of future events.
Term
15. What is satisficing? How does it differ from maximizing? Is it irrational?
 Definition
 Managers don’t maximize their benefits, rather that manager’s satisfice.
 Managers select the 1st alternative that meets a minimally acceptable standard (this is called the aspiration level which is subjectively defined performance goal that alternative must meet) rather than going through and evaluating all alternatives and selecting the best one
 Its rational behavior; given our limits it’s the best way to make decision
Term
16. What is a heuristic? What are the advantages of and disadvantages of heuristics?
 Definition
 Heuristic- a labor saving device, a short cut, a rule of thumb
• Managers use heuristics because of their limited information processing capabilities; they help us cope with complex environments by simplifying them
• They reduce the costs of thinking.
 Advantages: 1) time savings and 2) they may produce more good decisions than bad decisions
 Disadvantages: can lead us to faulty conclusions; when they lead to errors in judgment called biases
Term
17. What is the availability heuristic? What factors cause you to overestimate the frequency of an event? Underestimate the frequency of an event
 Definition
 Availability heuristic- is used when managers assess the frequency of an event by the degree to which those instances of that event are easily recalled in memory
 Can be a very useful aid in decision-making since instances of events of greater frequency are generally recalled more easily than events of less frequency this heuristic will often lead to accurate judgments.
 Is fallible because the availability of information in memory is affected by other factors that are not related to the objective frequency of the judged event.
 Events that evoke emotion, are vivid, are recent, are easily imagined, and are specific will be more available in memory (more easily recalled) than events that are unemotional in nature, are bland, are in the distant past, are difficult to imagine, or are vague.
• These irrelevant factors cause the availability heuristic, at times, to lead to errors (i.e. events are judged as more frequent than is really the case)
 Example- yearly performance review- manager will focus on what is most recent behavior seems more frequent than it really is
Term
18. What is the representativeness heuristic? What’s the problem with this heuristic?
 Definition
 Representativeness heuristic- reflects the tendency of managers to assess the likelihood of an occurrence by matching it with a preexisting category (i.e. stereotype)
 It is basically where managers use stereotypes (categories) in making judgments; example in the notes- not hiring someone if they don’t fit the stereotype that is already set
 Problem- can lead to behavior that is irrational and morally reprehensible
• Can lead to prejudice and discrimination based on non-job related factors such as sex, age, race, and religion
• Causes us to miss opportunities and make mistakes
Term
19. Under what decision-making conditions do decisions get made in the behavioral model?
 Definition
 Risk and uncertainty
Term
20. What does the irrational/implicit favorite model of decision-making say about decision-making?
 Definition
 Decision maker selects a favorite early on in the evaluation of alternatives
 Once this “implicit” favorite is chosen the rest of the alternatives are evaluated against it
 Basically, the decision maker distorts information and selects decision rules in order to favor their implicit favorite
 This model assumes that the decision maker simply goes through the motions of generating and evaluating more alternatives as a way to justify their initial choice (favorite). (NOTE: this is irrational behavior and it’s also a waste of time and money because a decision has already been made)
Term
21. What types of decisions are made irrationally?
 Definition
 Nonprogrammer decisions
Term
22. What is the basic purpose of a brainstorming session?
 Definition
 This technique is designed to generate ideas, not evaluate them
 Presented with a problem and are asked to identify as many potential solutions as possible
Term
23. What are the four rules in brainstorming?
 Definition
 Criticism is prohibited
 “freewheeling” is welcomed-free association, the more off the wall idea, the better
 Quantity is wanted; don’t worry about quality
 Combination and improvement are sought
Term
24. Can inhibitions be totally eliminated in brainstorming sessions?
 Definition
 It is very difficult to totally eliminate the evaluation of ideas when they are generated.
Term
25. What two creativity techniques does synectics use in helping the group to generate better idea?
 Definition
 Fantasy and analogy
Term
27. In synectics, what is the job of the facilitator? Technical expert?
 Definition
 Facilitator- formulates the problem for the group members respond by stating the problem as they see it
• The facilitator’s job is to structure the problem and helps lead the discussion away from the traditional ways of thinking
• They help individuals overcome internal inhibitions resulting from traditional ways of perceiving and thinking
 Technical expert- presents to aid the group in the evaluation of the feasibility of ideas
Term
28. What‘s the problem with synectics?
 Definition
 It’s costly and time consuming
 It’s less widely used than brainstorming. It also does not separate evaluation from generation; this impairs alternative generation.
Term
29. What research is NGT based on?
 Definition
 Inspired by research that discovered more and better ideas are discovered by several persons working alone/separately than by the same persons working in an interacting group
Term
30. How is NGT different from brainstorming and synectics?
 Definition
 It does not rely on free association of ideas
 It purposely restricts verbal interaction
Term
31. What in NGT does one try to eliminate to improve the decision-making process?
 Definition
 To eliminate Process losses in group decision process
Term
32. What are the steps in NGT?
 Definition
a. 1. Everyone is familiarized with the problem.
b. 2. Group members come up with ideas alone
c. 3. Group members share their ideas in a structured manner.
d. 4. Evaluate the ideas (one positive and one negative per person about each idea)
e. 5. Vote on the ideas, rank the ideas
Term
33. What are the defining characteristics of the Delphi technique?
 Definition
 Delphi technique- is a structured approach to creative problem solving using a group of experts; no face-to-face interaction between members
 Same 5 steps as NGT but completely anonymous
 The unique aspect of the Delphi technique is that experts are not brought together to discuss their ideas/views
• Intentionally kept apart so that their initial judgments/ideas will not be influenced by social pressure or other psychological aspects of group behavior; experts remain anonymous to one another
 Tries to eliminate group process in creative problem solving as much as possible
Term
34. What is the reasoning behind the Delphi technique?
 Definition
 eliminates negative aspects of group process (same as NGT but more extreme)
Term
35. What are some of the problems that can be encountered when using the Delphi technique?
 Definition
 The design of the questionnaire can limit the results obtained
 It can be extremely time-consuming even more so than the other techniques
 Member interest and motivation may decline if too much time passes between steps.
Term
36. What is the stepladder technique?
 Definition
 Form 2 person group out of 5 people and they make decision
 Then 3-person group challenges to re-think and form own solution
 Then 4-person….
 Use when decision has to be right the 1st time
Term
37. What is the stepladder technique designed to prevent? Promote?
 Definition
 Prevent- social loafing: everyone to carry own weight
 Allows group multiple chances to reconsider decision
Term
38. What are operations research techniques? What are they designed to do? What kind of data do they usually require? Are they an aid or substitute for managerial decision-making? What do managers need to think critically about when they use these techniques? Are they applicable to all decisions that managers make?
 Definition
A) OR techniques are useful as an aid for evaluating alternatives
B) They cannot replace the need for managers to think independently and to make judgments
C) They should be viewed as an aid/supplement to less systematic forms of decision making. OR techniques generally require quantitative data
D) For many problems where factors can seldom be quantified, OR techniques may not be applicable.
Term
39. What is meant by the term “confirmatory bias” in decision-making?
 Definition
 When we make decision, we tend to look for positive info about our decision
 If we look for negative it will tell us we made a bad decision
 We tend to accept information that confirms what we already believe
Term
40. What is the gambler’s fallacy?
 Definition
 After 10 bad hands of poker, they believe 11 got to be goodFAIL
 Chance doesn’t correct itself
Term
41. In decision making, do people pay more attention to descriptive, qualitative information or statistical, quantitative information?
 Definition
a. Descriptive, qualitative information
Term
42. In making decisions, people often violate the law of large numbers. What does that mean? Why does it occur?
 Definition
 Ignore large samples of data and go with their own brief, superficial experience as basis for choice
 Small sample set = less accurate, less reliable
Term
43. How does the framing of a decision affect decision-making? Positive framing? Negative framing?
 Definition
 If positively framed: gainConservative (less risk)
 If negatively framed: lossRisk-seeking
 Some people are naturally one way or another
 Pain associated with losing X is far greater than pleasure in gaining X
Term
44. What is group decision making a function of?
 Definition
 GDM= Individual Contributions + Assembly Effects – Process Losses
Term
45. What is an assembly effect? Process loss?
 Definition
 Assembly Effect- positive consequences of bringing a group together such as synergy, more information, diverse viewpoints, checking errors, and substantive conflict
 Process Loss- negative consequences of bringing a group together such as destructive, interpersonal conflict, free-riding or social loafing, domination by a few, and more time and expenses
 Leveling Effect- compromise and gains ownership and acceptance…
• Both Process and assembly law
• Upside and downside
Term
46. What is the optimal size for a decision making group?
 Definition
 5 to 7 people- preferably, you should also have odd-numbered groups (5 or 7) to break ties.
Term
47. What are the advantages of group decision making?
 Definition
 More information is available to help solve the problem: greater pooled resources.
 Evaluation is superior because you have a wide range of viewpoints. This wide range of viewpoints allows a clearer view of the strengths and weaknesses of each alternative.
 Individuals who participate in decisions are more satisfied with the decision and are more likely to support it. Greater acceptance leads to more commitment to the decision which, in turn, leads to better implementation
 Individuals get a better understanding of the decision that is made and as a result, it is easier for them to communicate the decision to their subordinates.
 Fulfills need for personal growth for some employees. They are allowed to participate and have greater autonomy on their jobs which fulfills their need to grow through their jobs.
 Helps individuals learn new skills (e.g., how to make a decision, how to get along with other people who don’t always agree with you). It helps to develop conceptual and human skills.
 Perceived as being more fair than decisions made by sole individuals—sets up a fairness image.
 Reduces stress by lowering role ambiguity (i.e., being unclear about one is supposed to be doing on his/her job) and role underutilization (i.e., one’s skills and abilities are not being on the job to their fullest potential). Now, individuals have a clear idea of what they are to do and what is expected of them (prevents role ambiguity).
 Overall, GDM provides a greater sense of control for the employee.
Term
48. What are the disadvantages of group decision making?
 Definition
 Takes longer than individual decision making it is costlier
 Indecisiveness: groups can have a difficult time making a decision
 Domination by a few powerful members or by a leader can negate the many virtues of group processes
 Free-riders are a problem in groups. As groups become larger, the less effort each person puts forth. This phenomenon is known as social loafing.
 With corporate power and personal pride at stake, disagreements over important matters that occur in groups can often lead to bad feelings, ill-will, and destructive conflict between group members
 Escalation of demands: people may want to participate in things that are inappropriate for them to participate in.
 Social motives may prevail over hard-headed task orientation: much time can be wasted in socializing or playing that is irrelevant to GDM.
Term
49. What is the leveling effect?
 Definition
 Compromise that takes place in group decision making that lower quality of decision, but increases acceptance
 It is both an assembly effect and a process loss
Term
50. When does a manager (under what conditions) use individual decision making rather than group decision making?
 Definition
 little time to make decision
 subordinates don’t get along well in groups
 subordinates don’t share the goals of the org
 manager possesses all knowledge and expertise
• use group when you’re concerned about subordinates acceptance
Term
51. Rank the following in terms of decision making accuracy: group, average individual in the group, and best member in the group.
 Definition
a. 1. Best member
b. 2. Group
c. 3. Average Indvidual
Term
52. Which is more efficient: group or individual decision making? Consider both short term and long term efficiency)
 Definition
 Short: Individual; quick in beginning slow in end
 Long: group b/c implementation of decision quicker here; slow in beginning and
Term
53. Where do you have greater creativity: five individuals generating ideas alone? Or those same ive individuals generating ideas as a group?
 Definition
 Alone- NGT
Term
54. Which leads to greater acceptance of the decision and better implementation of the decision: individual or group decision making?
 Definition
 Group decision making
Term
55. What function of management is concerned with job design and organizational function?
 Definition
a. Organizing – dividing up the work between individuals, and coordinate their efforts to achieve the goal.
Term
56. What are the three aspects of job design?
 Definition
 A job’s content
 The work methods or procedures to be used in its performance
 How it’s related to other jobs in the organization
Term
57. What is skill variety?
 Definition
 Skill variety- is the degree to which a job requires the employees to perform a wide range of operations in their work
• And/or the degree to which employees must use a variety of equipment and procedures in their work
 LOW skill variety- specialized/routine jobs
 HIGH Skill variety- jobs that require more training, experience, more challenge, creativity
Term
58. What is task identity?
 Definition
 Task identity- the extent to which employees do an entire/whole piece of work and clearly identify with the results of their effort
 LOW task identity- specialized jobs b/c employee only performs small part of job
 HIGH task identity- craft jobs
Term
59. What is task significance?
 Definition
 Task significance- refers to extent to which job and its performance exert a considerable impact on the lives of others
• High task significance feeling of accomplishment
 LOW task significance- specialized jobs
Term
60. What is autonomy?
 Definition
 Autonomy- extent to which employees have a major say in scheduling their work, selecting the equipment and methods they will use, checking their own work (quality control), and deciding the procedures to be followed
• The extent to which they are allowed to make important decisions regarding their jobs. JOB DEPTH!
 HIGH- employees decide what, how, when they do it
 LOW- specialized jobs
Term
61. What is feedback?
 Definition
 Performance feedback - the degree to which employees, as they are working, receive information that reveals how well they are performing on the job
 Can come from co-workers, supervisors, subordinates, clients, or even the job itself. Also, feedback can come from performance appraisal, awards and promotions, and personal evaluations of one’s own feelings
Term
62. What is job breadth and job depth?
 Definition
 The breadth/range of a job refers to the number of tasks that a jobholder performs.
• Job breadth/range varies from few to many different tasks {Horizontal Loading]
• LOW job breadth- jobs with few tasks; more specialized
• HIGH job breadth- many tasks
 Job Depth- amount of discretion that an individual has to decide job activities and job outcomes
• Job depth varies from little to considerable discretion in the choice of activities and outcomes [Vertical]
• LITTLE depth- relatively specialized jobs.
Term
65. What job design is least prevalent today? Most prevalent today?
 Definition
 Least- craft jobs
 Most- specialized jobs
Term
66. What is a specialized job and how does it load on the five task characteristics?
 Definition
 Results from the division of labor into smaller and smaller task elements
 LOW breadth, depth, autonomy, task significance, task identity, skill variety
 Instrumental motivation- job having means to an end; ex/ Kevin the brother
 Assembly line determines quantity; human workforce determines quality
Term
67. What are the advantages of specialized jobs?
 Definition
 Less skilled employees can be hired because of the simplicity of job assignments can pay them less.
 Jobs can be learned in less time reducing training costs.
 Constant repetition leads to an area of limited expertise, which increases productivity
 More opportunities for utilizing the primary talents of the employee
 Work is performed quicker because the employee does not lose time shifting from one activity to another
 Dependence on particular employee skills is minimized
Term
68. What are the disadvantages of specialized jobs?
 Definition
 Low employee motivation
 Low job satisfaction
 Low quality job performance
 High absenteeism- withdrawing behavior
 High turnover (quitting jobs)- withdrawing behavior
 Sabotage and strikes- b/c not in control
 Alcohol and drug abuse
 TEST- not all negative effects happen- depends on the person in the job
Term
69. What is the purpose of job enlargement?
 Definition
 Job enlargement- allocation of a wider variety of similar tasks (requiring the same skill level) to an employee in order to make the job more of a challenge. It’s intent is to keep one from getting bored so quickly
Term
70. What two task characteristics does job enlargement increase?
 Definition
 Increased breadth and increased task identity
Term
71. The motivational benefits of job enlargement are short-lived or long-lived?
 Definition
 Short Lived
Term
72. What is job rotation?
 Definition
 Job rotation- shifting workers through a set of jobs in planned sequence in order to increase their capabilities and understand various aspects of the operation; rotate through series of specialized jobs
 Benefits are short lived and new jobs can be more boring than original job
Term
73. What is job enrichment? How is it different from job enlargement?
 Definition
 Strategy represents a move backward toward craft jobs where employees perform a larger and more complete segment of the work
 The intent of enriched jobs is to increase the meaningfulness of work and the experienced responsibility of work outcomes by increasing job content
 Difference: critical difference is depth
• Job enrichment necessarily involves job enlargement
• Job enlargement doesn’t necessarily lead to job enrichment
• Example, you can give a person twenty more boring things to do (job enlargement) but it will not give the person discretion over his job (job enrichment)
 Both- Increasing breadth and autonomy
Term
74. What are the advantages of job enrichment? [take problems with specialized jobs and SWITCH them]
 Definition
 High employee motivation
 High job satisfaction
 High quality job performance
 Low absenteeism
 Low turnover (quitting job)
 TEST- why is there no high quantity because moving back to craft job
Term
75. What are the three moderators that influence the effectiveness of job enrichment? How do they influence it?
 Definition
 Knowledge and skill of employee (ability)
 Growth need strength (motivation)- need as the employee
 “context” satisfactions (surroundings)
 Influence- TEST- weak skill level on enriched job advantages of enriched job go away; need expressive motivation
• Dissatisfied with environment job enrichment decreases
• Which will reduce effectiveness of job enrichment
Term
76. What are the five steps in redesigning a job so it will be enriched? What happens at each step and what task characteristics are increased?
 Definition
 Form Natural Work Units- unit is given continuing responsibility for a body of related work or a “whole” piece of work (being part of a team)
• Objective-to increase the employee’s feeling of “ownership” over their job
• Increase task identity and task significance.
 Combing Tasks- job enlargement- combine several tasks into a larger job requiring a broader range of skills
• An attempt to increase skill variety and task identity.
 Establishing Client Relationships- employees are put into contact with people who use their product or service such as customers (internal/external)
• Designed to increase skill variety, task significance, autonomy, and feedback
 Vertical Loading-Most Important Step- gap between doing and controlling is closed
• Employees are given more latitude in and responsibility for their jobs
• Primarily increases autonomy; increases all the other characteristics
• Add autonomy to the job
• Without vertical loading really fancy job enlargement (can’t do it without it)
 Opening Feedback Channels- employees are provided with increased feedback on their performances by opening up the communication channels
• Primarily an attempt to increase performance feedback. Feedback should be a continuous, on-going process.
• Here you allow people to check the quality of their own work. This helps them provide their own feedback which is seen as most valid type of feedback
• Feedback from every angle- 360
Term
78. What step in the redesign process is job enlargement?
 Definition
 Combing Tasks
Term
79. What step in the redesign process is most important?
 Definition
 Vertical Loading
Term
80. What are the disadvantages of job enrichment?
 Definition
 Some workers many not want enriched jobs
 Workers even when they desire enriched jobs may not have the skills necessary to perform enriched jobs; would have to train them cost more
 Enriched employees may also want great extrinsic rewards such as pay due to greater responsibility [gaining better quality but increases expenses too]
 Unions less than enthusiastic about design- think mgt. getting more work out of less people
• TEST- any redesign attempt unions hate it no matter what
 Supervisors of employees of enriched jobs may have “disenriched” jobs as result of enrichment [supervisors have to train new promotions resentment]
Term
81. How does strategy influence job design?
 Definition
 Ability- if job needs trained employee have to train them so their ability matches the job needed
 Motivation
 Economic Factors- specialized job enriched job costs money to redesign jobs
 Technological Factors
 Union Cooperation
 Management Support- management has to support the plan in order for it to succeed less time spent on it if the manager agrees
Term
82. What employee factors should be taken into consideration when designing jobs?
 Definition
 Specialized- sees job as means to a paycheck- instrumental motivation
 Enriched/craft- sees job ass means of personal fulfillment- expressive motivation
Term
83. What type of motivation is best suited to specialized jobs? Enriched jobs?
 Definition
 Instrumental Motivation- job having means to an end; better for specialized jobs [ex/Kevin the brother]
 Emotional Motivation- do the job because they want to (artist)- sees job as an end in itself; wants to grow through his/her work
Term
84. What is instrumental motivation? Expressive motivation?
 Definition
 Relates performance and arousal with an inverted U
 Too little arousal/challenge  performance decreases
 Too high arousal/challenge performance decreases due to freaking out
 Want moderate level of arousal/challenge
Term
86. When someone is hyper-sensitive to their environment, what type of job design should they be given? Why?
 Definition
 Hyper-sensitive- need relatively little stimulation to get them to activation level (moderate level of arousal) to get high performance
 Sensitive to their environment
 Job design- specialized jobs
Term
87. When someone is hypo-sensitive to their environment, what type of job design should they be given? Why?
 Definition
 Hypo-sensitive- need a lot of stimulation from their external environment to achieve activation level
 Job design- enriched jobs, craft jobs [ex/ Mr. Saulley]- because provides them with lots of stimulation
Term
88. How does technology affect job redesign efforts?
 Definition
 The more the design of the job is influenced by technological factors the less job design flexibility that exists
 For example, it is easier to redesign craft work than assembly line work which, in turn, is easier to redesign than automated work.
 TEST- where is it easiest to redesign jobs? GM Shreveport, sally’s craft shop, Exxon plastics Sally’s craft because can make it into assembly line…hardest Exxon because technology determines how, what, when job gets done
Term
89. How do unions feel about any attempt from management to redesign jobs?
 Definition
 Unions less than enthusiastic about design- think mgt. getting more work out of less people
 Original members were craft afraid of specialists; now they are specialist afraid of going back to craft
 TEST- any redesign attempt unions hate it no matter what
Term
90. How do economic factors affect redesigning of jobs?
 Definition
 Required or necessary resources may not be available to improve or redesign jobs (e.g. may not have the money to buy a new piece of equipment or hire a job design specialist)
 Job redesign is expensive- redesign one job have to redesign the others because everything is connected
Term
91. What is the relationship between specialization and coordination according to the specialization-coordination dilemma?
 Definition
 More you specialize and divide up the work w/ individuals/groups  the more difficult it is to coordinate
 Why do you need specialization/coordination - specialization give efficiency and technically expert; coordination give responsiveness to environment and can change quickly
 More specialize have more people harder coordinate because more people
 Create more specialized dept.  harder because they each have their own goals
Term
92. Where is it more difficult to coordinate, within departments? Or between? Why?
 Definition
 Coordination across boundaries is where problems occur due to different values, goals, training, etc….
 Coordination within boundaries- is easier to achieve due to similar values, goals, training, etc….
 You need to do in organizational design to be successful is to identify critical interdependencies and draw boundaries around them
 Harder- between departments because have different goals
Term
93. What is the primitive/agency organizational design? What are the advantages/disadvantages?
 Definition
 Primitive/Agency- This type of structure has one boss and a few employees
 All the employees report directly to the boss and he provides the necessary coordination thru personal supervision or informal means
 Advantage- this type of structure is quite flexible; employees do whatever boss tells them to
• Each employee acts as an agent or extension of the boss who coordinates all company activities and performs all managerial tasks.
 Disadvantage- breaks down under conditions of complexity because of the limited information-processing capacity of the boss; more employees boss can’t do it all himself
Term
94. What is the functional organizational design? How are activities grouped?
 Definition
 Functional- groups its activities into separate units or departments in which each undertakes a distinctive function, e.g. marketing, production, etc…
 Jobs grouped based on specialty
 Have a specialization and a focused concentration of functional activities
 Division of labor- specialized jobs- acct, mkt, production good at it and expert slow to change
Term
95. What are the advantages of a functional design?
 Definition
 Same as Specialized Advantages
Term
96. What are the disadvantages of a functional design?
 Definition
 Same as Coordination Disadvantages
Term
97. When does one use the functional design?
 Definition
 When you have a stable environment.
 When you have one or a few product lines.
 When efficiency and quality are your goals.
 When the organization is small to medium in size.
Term
98. What is the product design? How are activities grouped?
 Definition
 Product design- each major product line is administered through a separate and semi-autonomous division
• This allows both responsiveness to the environment and efficient coordination of a large number of specialized units.
• Specialists are grouped together to perform all the duties necessary to produce an individual good or service.
 Each separate unit in a product design is a replica of an individual, functionally designed organization.
 Product design allows you to set up profit centers since they have identifiable cash flows consisting of expenses and revenues.
 Product design is better able to accommodate growth than a functionally designed organization-you just merely slap on a new division.
 Grouped- specialists are grouped according to products- only reason they are there because of the product have common goal coordination goes up [10 products 10 marketing dept.]
Term
99. What are the advantages of a product design?
 Definition
 Same as Coordination Advantages
Term
100. What are the disadvantages of a product design?
 Definition
 Same as Specialization Disadvantages
 Instead of 10 go to 1 HR person then they become jack of all trades specialization goes down
Term
101. When does one use the product design?
 Definition
 When you have a highly uncertain environment that requires rapid adaptation.
 When the organization is large.
 When the organization has multiple product lines.
 When the goals of the organizations are external effectiveness and adaptation, multiple products, and client satisfaction.
Term
102. What is a profit center and what are its benefits?
 Definition
 Each problem in product design is a profit center- get rid of the one that is failing (dog); star reinvest
 Establishes accountability and success of product with VP
 Each product in product design has revenues, expenses..so you can see which products make/lose$
• Hold people accountable
 CEO is only one responsible in final design, but in product, many people responsible
Term
103. What is a matrix design? How are activities grouped?
 Definition
 Design born out of necessity- we HAVE to do this, don’t want to
 These projects needed to be completed on time, on budget, and according to specifications. These projects required a great deal of technical expertise.
 A matrix design- is basically a product design overlaid onto a functional design. The matrix design is structured to reap the benefits of both these designs while avoiding the disadvantages associated with each.
Term
104. What are the advantages of a matrix design?
 Definition
 Extremely flexible and responsive. It is ideally suited for fluctuating workloads and it allows the organization to respond quickly to various market segments that are critical to its success.
 High rate of new product innovation due to interdisciplinary nature of the product teams (e.g. ideas of personnel guy spurs new ideas in R&D guy)
 It allows you to achieve specialization without suffering great losses in coordination due to functional home and project teams.
 Establishes responsibility for all matters relating to a project through the project manager.
 Minimizes duplication of specialists.
 Integration of project completion needs at lower levels where people have the right information and the expertise to complete the project-achieves coordination.
 Sets up career paths for both experts (functional managers) and broadly trained managers (project managers). This achieves specialization.
Term
105. What are the disadvantages of a matrix design?
 Definition
 Lose command of control. Top management loses control over activities
 Multiple authority roles. Unity of command principle is lost
 Personal stress and strain due to ambiguity and reporting to two supervisors. (You need people with high tolerance for ambiguity and high stress tolerance).
 Places a premium on teamwork. Employees need good interpersonal skills
 Power struggles within the organization between the functional and project managers)
 Employee allegiance is difficult to obtain. You have conflict between technical sophistication and project completion. Employees have mixed identities. Employees experience role conflict
 Very expensive in terms of communication and control costs. You have to have a lot of staff meetings and conflict resolution meetings to resolve problems/conflicts between managers and team members.
 Line-staff separation is blurred.
Term
106. When does one use the matrix design?
 Definition
 Same as Product Design “when to use”
 One major change- prospect high tech. problems instead of low tech.
Term
107. What is the job of a project manager in the matrix design?
 Definition
 Coordination- make sure products completed on time, within budget, and customer specifications
Term
108. What is the job of a functional manager in the matrix design?
 Definition
 Specialization- making sure people are up to date with training
 Send out experts to go to which projects
 Has all the power- can control people, the best people they have
Term
109. Which type of manager has no formal authority in the matrix design?
 Definition
 Project Manager- power of persuasion to get things done; stay around for 2-3 years and then move up
Term
110. In which organizational design type is it most difficult to replace the CEO from within the organization? Why is this the case?
 Definition
 Most difficult- functional because CEO is general managers; they only know their one area
 Don’t make good general managers because they only know one thing
 Have to go outside to replace- with product and matrix- you can get another CEO from within
Term
111. Which organizational design type accommodates growth readily
 Definition
 Matrix- can accommodate growth
 Product
Term
112. What is scalar chain or chain of command? What functions does it serve? What structural mechanism does one use to bypass the strict chain of command in organization?
 Definition
 Chain of command- exists whenever one individual reports to or is made subordinate to another.
• Refers to vertical authority. The higher the manager’s level in the organization (such as top over middle or first-line), the higher the manager’s formal authority.
 Chain of command accomplishes two things: 1) defines level of authority and 2) it routes directives and information up and down the organization-provides an information/decision network.
 If I follow strict chain of command takes too long; want to by-pass the middle man
Term
113. What is unity of command? Why does one try not to violate this principle of organizing?
 Definition
 Refers to the fact that subordinates should report to one and only one boss. Violation of this principle occurs to varying degrees in all organizations and the greatest violation comes in the matrix design.
 Clarifies responsibility and who reports to whom. It supplements the scalar chain.
Term
114. Where is unity of command violated? In what organizational design type is unity of command violated to the greatest extent?
 Definition
 TEST-Where is it violated in every organization- functional, product, matrix (on purpose)- because manager and higher manager will give you different instructions
Term
115. What is delegation of authority? Why do managers delegate authority?
 Definition
 Delegation of authority- extends a manager’s reach; enables a manager to identify and utilize employee talents.
 It empowers your employees, giving them freedom to think and experiment. When one delegates, you are providing the employee with a chance to grow and develop. You give the employee freedom to succeed.
 Why do this- because you can’t do it all yourself
 Allows you to use the talents and skills of employees
 Make sure before you delegate- they are able, motivated, and know what to do- need all three to happen
Term
116. What cannot be delegated when a manager delegates authority?
 Definition
 Responsibility- you’re still responsible- they mess it up it’s your fault too
 When managers delegate they don’t reduce their accountability, they remain responsible for their own actions and the actions of their subordinates. You can delegate authority but not responsibility.
Term
117. Why do managers resist delegating authority?
 Definition
 Manager feels like he/she lacks trained subordinates.
 Manager feels like he/she is only capable of doing the work.
 Manager may fear that the subordinates will make costly mistakes.
 Manager may fear that if the subordinate handles the task well then the subordinate could become a competitor. The manager might be “shown up” by the subordinate.
 Manager may believe that delegating makes them look lazy
 Manager may find that it is easier to do it themselves. This is especially true when
 Manager has difficulty communicating directions clearly.
 Manager resists delegating for fear of losing control.
Term
118. What do the terms “centralized” and “decentralized” mean as they pertain to delegation of authority?
 Definition
 Centralized-extent to which authority isn’t delegated, but concentrated at higher levels of management.
 Decentralized- extent to which authority is delegated.
 Remember these are relative terms and not absolutes. They represent opposite ends along a delegation of authority continuum. Usually, you won’t find a completely centralized or decentralized organization.
Term
119. What are the signs that one’s organization is becoming decentralized?
 Definition
 Most centralized- functional
 Most decentralized- Matrix
 Product- between- more decentralized than functional; more centralized than matrix
 How do you know org. becoming more decentralized- lower level mgt. making more decisions, flexibility, autonomy (enriched)
Term
120. What are the benefits of decentralized organizations?
 Definition
 Lower level managers can deal with problems on the spot.
 It provides opportunity for lower level managers to develop their decision making skills. EMPLOYEE DEVELOPMENT.
 Motivation of lower level managers is boosted when they’re entrusted to make decisions rather than just always following orders. Their jobs are enriched.
 It spreads the organization’s work load out and allows top managers more time for strategic planning.
Term
121. When does an organization need to be decentralized?
 Definition
 Decentralization becomes necessary as an organization grows in size because coordination problems force you to make others responsible/accountable for coordination
 With decentralization, it allows one to be more responsive to the environment because it provides for quicker coordination.
Term
122. What does span of control mean?
 Definition
 Span of control- number of subordinates/people who report directly to a supervisor.
 A span of control can be wide or narrow
• Wide span, a manager would supervise many employees whereas
• Narrow span, a manager would supervise few.
 Responsible for 20 people span of control is 20
Term
123. What is the relationship between span of control and organizational height?
 Definition
 A relationship exists between the span of control and organizational height
 The narrower the span of control- the taller the organization (e.g. more management levels)
 Wider the span of control- the flatter the organization (e.g. fewer management levels)-downsizing
Term
124. What is the paradox of managerial control as it relates to span of control?
 Definition
 Paradox of managerial control with narrow spans of control- is that narrow spans of control allow managers tighter control over their subordinates BUT this loosens overall control from top to bottom in the organization because there are now more managerial levels.
 The result of narrow spans of control and hence, more levels of management, is a greater distortion of communication traveling up and down the scalar chain in the organization.
 These successive management levels act as filters in the communication process. Therefore, in an organization where there are narrow spans of control, top management has less control over lower levels of management.
 Wide span of control lot people to supervise individual manager less control fewer mgt levels easier for top manager to control first line
Term
126. What is the optimal span of control?
 Definition
 There is none-every situation is different
Term
127. What are the factors that narrow span of control? Widen span of control?
 Definition
 TEST- Which of following narrows span of control
• Dynamic environment- quick changes narrow span of control
• Supervising- complex activities employees are doing supervise fewer people
• A lot of committee meetings and paper work less time for managing narrow span
• Administrative asst. who does this for you widen it
• Inexperience supervisor get one person to supervise narrow
• Well trained and experienced workers wide
Term
 EXTRA CREDIT- performance is a function of
 Definition
ability x motivation x role clarity
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