Conceptual skills- The ability to think through complex systems and problems.
Controlling- The process of monitoring activities, measuring results and comparing them
with goals, and correcting performance when necessary.
Creativity- The generation of meaningful ideas by individuals or teams.
Critical thinking- The ability to diagnose situations and predict patterns of behaviors, which
result in better decision making.
Decisional roles- Managerial roles in which managers are responsible for making judgments
and decisions based on avail- able information and analysis of the situation.
Effectiveness- The level to which people or organizations achieve agreed-upon goals.
Efficiency- Using the smallest number of resources to achieve the greatest output.
Entrepreneur Mindset- The ability to quickly sense opportunities, take action, and get
organized under uncertain conditions.
Entrepreneur- Individuals who plan, organize, and lead high-risk business opportunities.
First-line managers- Managers who direct daily activities for producing goods and services.
Fixed Mindset- The belief that talent, intelligence, and abilities are set traits.
Growth company- An organization that increases its annual revenue faster than its
competitors.
Growth Mindset- The belief that talent, intelligence, and abilities can be developed through
dedication, effort, and persistence.
Habit- Something that is done often and regularly, sometimes on an unconscious level.
Improvisation- The art of spontaneously creating something without preparation.
Informational roles- Managerial roles in which managers gather, assess, and communicate
information to individuals and teams in support of the organization’s values, mission, vision,
and goals.
Interpersonal roles- Managerial roles in which managers build relationships with the people
they work with and act as a public symbol for the many people they represent.
Large organizations- Organizations with more than 500 employees.
MGT300 Chapter 1 Key Terms
Leading- The process of effectively motivating and communicating with people to achieve
goals.
Management- The process of working with people and distributing an organization’s
resources to achieve goals efficiently and effectively.
Managerial roles- Organizational expectations that determine the actions of managers,
including interpersonal, informational, and decisional roles.
Mid-size organizations- Organizations with between 100 and 500 employees.
Middle managers- Managers who direct the work of first-line managers and are responsible
for divisions or departments.
Mission- An organization’s central purpose intended to generate value in the marketplace
(for-profit) or community (nonprofit) and which lasts for the life of the leader.
Multinational corporation- An organization with operations in multiple countries, usually
more than 10,000 employees, and de- signs, develops, and sells products and services to
customers all over the world.
Nonprofit organizations- Organizations that are required by the Internal Revenue Service
(IRS) to reinvest all profits back into the organization, as opposed to distributing that money
to investors or employees.
Organization- An entity formed and structured to achieve goals.
Organizing- The process of orchestrating people, actions, resources, and decisions to achieve
goals.
Planning- The process of setting goals for the future, designing strategies, and deciding on the
actions and resources needed to achieve success.
Relational skills- The ability to collaborate and communicate effectively with others.
Self-efficacy- The belief and confidence in our own abilities to deal with certain situations.
Self-leadership- The process through which people intentionally influence their thinking and
behavior to achieve their objectives.
Skills- Talents or abilities that enable a person to complete a particular task, interaction, or
process effectively and efficiently.
Small organizations- organizations with fewer than 100 employees.
Start-up- A newly formed organization with limited or no operational history.
Student organizations- An organization formed to engage students further in the college
experience through academic, political, religious, sports, environmental, and social action.
Technical skills- The ability to use the methods and techniques to perform a task.
Top managers- Managers who set the organization’s direction and make decisions that affect
everybody.
Values- The core ethics and principles of an organization through meaningful statements and
beliefs.
Vision- A description of what the organization hopes to achieve in the long term.
IN REVIEW
1.1 | Define management.
Management is the process of working with people and distributing resources to achieve
goals efficiently and effectively. Effectiveness is the level to which people or organizations
achieve agreed-upon goals, and efficiency is using the smallest amount of resources to
achieve the greatest output.
1.2 | Describe a manager’s four major tasks: planning, organizing, leading, and controlling.
The four management functions are planning, organizing, leading, and controlling. Planning
is defining what the organization wants to achieve, which includes setting goals for the
future, designing strategies, and deciding the actions and resources needed to achieve
success. Organizing means orchestrating people, actions, resources, and decisions to achieve
goals. Man- agers have the greatest opportunity to ensure that events occur as planned or
better than planned by leading, effectively motivating and communicating with people to
achieve goals. Asking whether the right things are getting done in the right way and in the
manner that you anticipated is controlling, which includes measuring and monitoring
activities, comparing results with goals, and correcting performance.
1.3 | Describe sustaining as a balanced approach to management.
The purpose of the sustaining approach to management is sustainable organizations, achieved
through managers’ ability to see, analyze, and design systems that seek organizational, com-
munity, and environmental stability.
1.4 | Correlate managers’ tasks with the organizational roles that they play.
Mintzberg identifies three categories of management roles: interpersonal, including
symbolic, public-facing activities; informational, gathering, assessing, and communicating
information; and decisional, making judgments and decisions based on situations and
gathered information.
1.5 | Compare and contrast different types of organizations, managers and the decisions
they make.
An organization is an entity formed and structured to achieve goals. It can be a small, mid-
sized, or large company. A variety
of different types of organizations and businesses can fall into these various size categories. A
start-up company is a newly formed organization. A growth company increases annual
revenue faster than its competitors. Multinational corporations usually have thousands of
employees and operate all around the world. Nonprofit organizations are required by the IRS
to reinvest all profits back into the organization, as opposed to distributing it to investors or
employees. Examples include religious organizations, charities, arts organizations, and free
health clinics. Student organizations are intended to engage students further in the college
experience. Their focus can be academic, political, religious, sports, environmental, or social.
Top managers set the organization’s direction and make decisions that affect everybody;
middle managers direct the work of first-line managers and are responsible for divisions or
departments; and first-line managers, who direct daily activities for producing goods and
services.
1.6 | Explain the purpose of organizational values, mission, and vision.
Organizational values are beliefs that shape employee and organizational behaviors and are
intended to be timeless. Mission is an organization’s central purpose intended to generate
value in the marketplace ( for-profit) or community (nonprofit) and lasts for the life of the
leader. By consistently holding to the values of the company, the organization’s leadership
defines the mission and sets forth a vision, a descriptive picture of an optimal future 1–10
years from now.
1.7 | Demonstrate how focusing on skills and strengths leads to success as a manager.
Skills are talents or abilities that enable a person to complete a particular task, interaction, or
process effectively and efficiently. Three types of management skills are conceptual,
technical, and relational. Strengths are skills for which managers demonstrate the greatest
aptitude. Research demonstrates that managers who focus on existing strengths earn the
opportunity to be great in those skills one day.
SELF-TEST
1.1 | Define management
1. Management is the process of working with people and distributing an organization’s
resources to achieve goals
2. Managers have the ability to “make a difference” through a balanced approach to:a.
Employee and customer satisfaction
b. Doing well by doing good
c. The triple bottom line of people, profit ,and planet
d. Efficiency and effectiveness
e. Values, mission, and vision
3. Using examples, compare and contrast the “art” and “science” of management.
4. Organizations are legally required to have Corporate Social Responsibility programs.a.
True b. False
5. U.S. economist Milton Friedman famously stated that:
a. The only responsibility of a for-profit company is to maximize the amount of
money that can be made for shareholders.
b. Organizations have to establish trust with employees, communities, and
shareholders to operate effectively.
c. The earth’ s resources are limited and it is the responsibility of all organizations to
conserve.
d. A company can afford to lose a lot of money, but not one shred of reputation.
1.2 | Describe a manager’s four major tasks:
planning, organizing, leading, and controlling.
6. Give an example of how Starbucks’ planning process has changed over the past decade.
7. During what function do managers have the greatest opportunity to ensure things go as
planned and possibly even better?a. Planning b. Organizing c. Leading d. Controlling
8. Illustrate how the management function of controlling was used at Pixar to make The
Incredibles.
9. Diagram the four management functions and their relationship to goal achievement.
1.3 | Describe sustaining as a balanced approach to
management.
10. Explain how sustaining provides a balanced approach to management.
1.4 | Correlate managers’ tasks with the organizational roles that they play.
a. Profitably and ethically
b. Efficiently and effectively
c. Quickly and cheaply
d. For the benefit of shareholders
e. None of the above
11. To which of Mintzberg’s 10 management roles does each of the following correspond?
a. Sit down with two team members to discuss an ongoing argument that has started to
interfere with performance.
b. Present the company’s quarterly financial results to the media.
c. Train new employees to complete monthly performance reports.
d. Reallocate budget resources to increase the marketing budget for one of the company’s
services.
e. Host conference call with top management to update them on sales projections.
f. Attend an award dinner where the CEO of the company will accept a community award on
behalf of the company.
1.5 | Compare and contrast different types of organizations, managers and the decisions
they make.
12.Compare and contrast start-up companies with growth companies.
13.Contrast for-profit and nonprofit organizations.
14.Decide what type of manager should make the following decisions.
a. Set employee schedules.
Top manager Middle manager First-line manager
b. Allocate budget resources.
Top manager Middle manager First-line manager
c. Hire staff.
Top manager Middle manager First-line manager
d. Prioritize financial resources
Top manager Middle manager First-line manager
e. Establish partnerships.
Top manager Middle manager First-line manager
1.6 | Explain the purpose of organizational values, mission, and vision.
15. Match each of the following internal factors with the time
frame of its impact.Values 1–10 years Mission Timeless Vision Life of leader
1.7 | Demonstrate how focusing on skills and
strengths leads to success as a manager.
16. Summarize the theory that Marcus Buckingham and Donald O. Clifton propose in Now,
Discover Your Strengths
Chapter4
KEY TERMS
Advocacy group A set of people dedicated to instituting change based on their concerns or
interests. (p. 93)
Boycott An attempt by an individual or group to change the actions of an organization by
convincing other consumers not to purchase its products or services. (p. 93)
Ceremony An event that provides one or more stakeholders with a sense of purpose and
meaning connected to the organization. (p. 89)
Competing values framework
Competitiors
Counterculture
Crowdsourcing Employing the efforts of customers and the public to innovate and further an
organization’s mission. (p. 93)
Customers
Demographics Sociological characteristics, including age, gender, marital status, ethnicity,
and geographic location, which affect buying habits, work ethic, work-life balance
expectations, travel patterns, and disposable income. (p. 102)
Dominant culture
Economy An orchestrated system of talent, resources, and money with the purpose to create
and distribute products and services. (p. 102)
External environments The specific and general factors out- side an organization that can
change how it operates. (p. 90)
General environment External forces that affect all organiza- tions participating in an
economy, where managers have little or no power to effect change. (p. 97)
Government activism Government’s active role in encouraging business to behave in ways
that are in the public interest through tax credits and other incentives. (p. 96)
Gross domestic product (GDP) The value of what a country produces on an annual basis,
representing the size of its economy. (p. 104)
Hero A real or imagined person who represents an ideal per- former specific to the
organizational culture. (p. 90)
Interactive engagement Collaborating with consumers to develop future products and
services. (p. 91)
Internal environment The forces inside an organization that affect how the managers set
expectations, how employees per- form their roles, and how the company interacts with
stakeholders and responds to external environments. (p. 87)
Organizational culture A collection of beliefs that individuals and groups share to help their
organization respond to environ- mental forces and changes. (p. 87)
Proactive engagement Creating a product or service as an alternative to enhance the
customer’s experience. (p. 91)
Reactive engagement Monitoring positive and negative customer feedback and improving
the organization’s products and services accordingly. (p. 91)
Regulations Rules set by external governing bodies that dictate standards and procedures for
industries, businesses, and professionals. (p. 94)
Ritual A formalized activity intended to communicate and teach the organization’s culture.
(p. 89)
Slogan A repetitive phrase intended to support an organization’s culture, mission, vision, or
values. (p. 88)
Sociocultural forces The behaviors and beliefs associated with demographic groups that
comprise an organization’s available talent and customers. (p. 102)
Specific environment The industry-focused part of the external environment that directly
affects an organization’s operations and performance. (p. 91)
Story A narrative, usually fictionalized or enhanced over time, based on actual organizational
experiences. (p. 88)
Strong culture
Subculture
Suppliers Entities that provide an organization with the external resources that it needs to
operate, including money, materials, people, and information. (p. 94)
Talent The people who have the skills, knowledge, creativity, and relationships necessary to
optimize an organization’s performance. (p. 92)
Unobserveable culture
Weak Culture
IN REVIEW
4.1 | Describe the components that make up an organizational culture.
An organizational culture is a collection of beliefs that individuals and groups share to help
their organization respond to environmental forces and changes. Culture is experienced on
two different levels: conscious and unconscious. The components of culture include slogans,
stories, symbols, rituals, ceremonies, and heroes.
4.2 | Illustrate how internal influences create unique types of cultures.
Managers employ the components of culture to create a specific experience for employees
and other stakeholders that establishes consistent expectations. We demonstrated how
managers at Perfect Planet Interactive, Hannah’s, and Reliable Energy communicated their
organizational cultures differently, which led to very unique types of organizations that were
well suited for their industries.
4.3 | Describe and compare general and specific external environments.
Specific environment forces include customers, talent, advocacy, suppliers, regulations, and
competitors. Specific environments are specific to an organization’s industry; therefore, these
forces
have a tangible effect on operations. General environment forces include politics/laws,
resources, technology, sociocultural, and economy. Managers have a limited impact on these
influences, which nonetheless can have a dramatic impact on organizations and managers’
need to change.
4.4 | Explain how managers analyze challenges and opportunities in organizations.
How do managers know what to change? First, it is vital that a manager understands the
mission of the organization and pur- pose of its subsystems. This allows a manager to
understand where process and employee behaviors are inconsistent with purpose. Exponential
growth– or decay-driven runaway loops are easily identified, and managers must seek to
balance them. Goals and states of stability offer managers targets to adjust behavior.
4.5 | Summarize the common reasons why managers change how their organizations operate.
Organizations go through continuous change, whether management notices or not. By
understanding mission and purposes, acknowledging imbalances, designing plans to stabilize
the sys- tem, and communicating with stakeholders, managers can institute well-considered,
positive change for their organizations.
SELF-TEST
4.1 | Describe the components that make up an organizational culture.
1.List the six characteristics of corporate culture.
2.Which of the following reconstructs the stages of a “hero’s journey”?
a. Identifying Resources, Innovation ,and Resource Allocation
b. Idea Generation, Motivation, Success
c. Plan, Organize, Lead
d. Leaving Home, learning from Challenges, Returning Home
e. None of the above
3. Compare and contrast rituals and ceremonies.
4.2 | Illustrate how internal influences create unique types of cultures.
4. Interpret the significance of Reliable Energy’s ceremony to recognize the company’s safety
award.
5. Describe how employees at Perfect Planet Interactive demonstrate the organizational value
of “embracing their inner geek.”
4.3 | Describe and compare general and specific external environments.
6. Cite a contemporary example of a boycott.
7.Industries are only regulated by external governing bodies.
a. True
b. False
8. Explain the impact of government activism on two industries by citing one example for
each that is not detailed in this book.
9. Government legislation limiting the behaviors of management in support of the public’s
interest has primarily been a bipartisan issue.
a. True
b. False
10. Predict challenges that a manager might face with Veteran
and Millennial generation employees working together on a team.
4.4 | Explain how managers analyze challenges and
opportunities in organizations.
11.In the summer job scenario, what feedback loop balances the behavior of “traveling with
friends”?
12.Explain the concept of a “balanced approach” to management.
13.Predict the behavior of an energy budget system, with a runaway feedback loop for
savings and a low-intensity balancing loop for usage.
4.5 | Summarize the common reasons why
managers change how their organizations operate.
14. Which of the “top five reasons managers should change” applies to the Amazon energy
budget example? Based on an analysis of the system, formulate a change in behavior to save
on energy costs.
Chapter 9 Key Terms
Analyzer A company whose strategies seek to maintain existing products and services while
pursuing limited innovation. They often imitate or follow the proven success of prospector
organizations. (p. 231)
Barrier to entry An obstacle that makes it difficult for an organization to enter a particular
market or replicate a competitor’s service and product offerings. (p. 235)
BCG Matrix A framework developed by the Boston Consulting Group for evaluating
business units according to growth and market share. (p. 237)
Blue Ocean Strategy- This mindset breaks up our long-held beliefs and opens up our
minds to new opportunities and different approaches.
Capacity refers to the financial and human resources available to the company, which will
enable or hinder it to achieve goals. (p. 237)
Competitive advantage The characteristics of an organization’s products or services that
distinguish it from competitors and pro- vide an advantage in the marketplace. (p. 231)
Competitive analysis The process of assessing and monitoring the competition in order to
design more effective strategies. (p. 232)
Competitive inertia A tendency to continue with competitive practices that had been
successful in the past, even if they are less effective in the present. (p. 237)
Complementors: Organizations that sell products or services compatible with other goods and
services in an industry to add value to mutual customers.
Core capabilities Activities and processes that an organization routinely does well in
comparison to its competitors; also known as core competencies. (p. 240)
Cost focus Strategy: A strategy used by organization to gain competitive advantage by
keeping costs and prices lower than their rivals while targeting a narrow market.
Cost leadership strategy A strategy in which an organization seeks competitive advantage
by reducing production costs and therefore consumer prices. (p. 232)
Defender A company whose strategies support stable growth and continual improvement of
existing products and services. (p. 231)
Defensive Strategy: known as retrenchment strategy, focuses on the reduction of one or
more of a company’s operations with the goal of becoming a more financially stable
business.
Differentiation focus Strategy: A strategy used by organizations to achieve competitive
advantage by providing better-value products or services to a narrow target market.
Differentiation strategy A strategy in which an organization seeks competitive advantage by
providing goods or services that are significantly different from the competition. (p. 246)
Diversification strategy A risk-reduction strategy in which an organization adds new kinds
of goods, services, or business units. (p. 247)
Divisional strategy A strategy that determines how a business will compete in a particular
industry or market. (p.230)
First mover A company that gains competitive advantage by being the first to offer a new
product or service, or to use a new cost-saving technology. (p. 232)
Functional strategy A strategy that determines how employees will implement and achieve a
tactical plan. (p. 230)
Growth strategy A strategy for increasing revenue, profits, market share, or territories. (p.
238)
Market position An honest assessment about how the company competes in its industry. (p.
237)
Organizational strategy A corporate-level strategy that addresses the question “What
business are we in?” and unites all parts of the organization. (p. 230)
Prospector A company that uses strategies for high-risk, fast growth through product and
market innovation. (p. 232)
Reactor A company that does not follow a consistent strategy but just responds to changes in
the environment. (p. 231)
Resources The assets, people, processes, and capabilities of an organization. (p. 237)
Stability strategy A strategy in which an organization focuses on processes, products, and
services that will sustain it over the long term. (p. 232)
SWOT analysis A method of assessing an organization’s strengths, weaknesses,
opportunities, and threats (abbreviated as SWOT). (p. 239)
Vertical integration: A method of diversification in which an organization begins
producing its own supplies or takes on the distribution and selling of its products.
(backward and forward integration)
IN REVIEW
9.1 | Explain how businesses use planning to solve problems and make a difference.
Designing and defining strategies is a continuous process that helps organizations determine
what they do, why they should be in business, how they can win and sustain market share,
and how they can innovate continually to keep ahead of the competition.
To design a successful strategy, managers must understand the full nature of the competitive
forces that are present and take a holistic, systemic view of the industry structure. Being able
to diversify in a competitive industry, seeing an opening in the market, and continuously
staying ahead of the competition would not be possible without a clearly defined, skillfully
designed strategy.
9.2 | Distinguish how planning is different at the organizational, divisional, and functional
levels of a business.
As a result of the planning process, Chris needs to document decisions regarding goals,
strategies, resource allocation, and actions required; these are called strategic plans. There are
three levels of strategy: organizational, divisional, and functional.
With the philosophical foundation of an organization’s mission, vision, and values,
organizational, divisional, and functional strategies are documented with business, tactical,
and operational plans, respectively.
9.3 | Explain how senior managers develop organizational strategies and business plans.
Business strategies can be classified in many ways, but all of them seek to gain competitive
advantage, which is the characteristic of an organization’s products or services that
distinguish it from competitors and provide an advantage in the marketplace. By following
certain types of strategies, companies can be categorized as first movers, reactors,
prospectors, defenders, or analyzers.
A reactor is a company that does not follow a consistent strategy, but just responds to
changes in the environment. An analyzer is a company whose strategies seek to maintain
existing products and services while pursuing limited innovation. A defender is a company
whose strategies support stable growth and continual improvement of existing products and
services. A prospector is a company that uses strategies for high-risk, fast growth through
product and market innovation.
9.4 | Outline methods that managers use to understand their industries and competitors.
The Five Forces Model outlines five forces that determine what managers should expect
when competing in an industry: power of suppliers, power of buyers, substitute products and
services, new entrants, and rivalry. Understanding and designing strategies to compete
effectively should create a barrier to entry, an obstacle that makes it difficult for competing
organizations to enter a particular market or replicate a competitor’s service and product
offerings.
9.5 | Describe how managers assess the organization’s capacity to execute proposed business
plans.
An organization’s market position is an honest assessment about how the company competes
in its industry. An organization’s capacity refers to the financial and human resources
available to the company, which will enable or hinder it to achieve goals.
The BCG Matrix is a framework developed by the Boston Consulting Group for evaluating
business units according to growth and market share, so that managers could quickly
categorize their company’s position in the industry where it competes. This enables
management to assess quickly the validity of its strategies and where to invest resources.
How do managers know how to figure out their organization’s future plans, other than simply
guessing? Managers typically apply a SWOT analysis, which assesses an organization’s
strengths, weaknesses, opportunities, and threats. It is a useful way of defining business
strategy and helping to make strategic insights and decisions.
9.6 | Demonstrate how managers develop divisional strategies and tactical plans.
Applying the balanced scorecard approach allows the management team to “augment
traditional financial measures with benchmarks for performance in three key nonfinancial
areas: 1) a company’s relationship with its customers, 2) its key internal processes, and 3) its
learning and growth.” The framework intends to ensure that managers translate vision into
strategy and execution of the strategy, both of which are critical to success.
9.7 | Compare traditional strategic planning models to an event-based approach.
Managers typically use three types of strategies to run its business: focus, differentiation, and
vertical integration. Focus strategy is when an organization concentrates on a specific target
market and may use cost leadership and/or differentiation strategies. Differentiation strategy
is when an organization seeks competitive advantage by providing goods or services, which
are significantly different from the competition. As a result of focus, cost leadership, and
differentiation strategies, companies will often seek to produce and distribute their sup- plies,
called vertical integration. The method of diversification in which an organization begins
producing its own supplies is referred to as backward integration. This is also called
diversification strategy, which is a risk-reduction strategy in which an organization adds new
kinds of goods, services, or business units. The method of diversification in which an
organization takes on the distribution and selling of its products is referred to as forward
integration.
SELF-TEST
9.1 | Explain how businesses use planning to solve problems and make a difference.
6. One of the main responsibilities of managers is to create, present, and implement
that will defend the company against the threat of competition, ascertain the best
market position, and determine the weaknesses that might make its position
vulnerable in the industry.
7. When an organization purchases another organization or business in order to grow, that is
called a(n).
9.2 | Distinguish how planning is different at the organizational, divisional, and functional
levels of a business.
3. The three levels of strategy include:
a. organizational
b. transitional
c. functional
d. (a) and (c)
4. The three levels are strategy are documented with which three types of plans?
9.3 | Explain how senior managers develop organizational strategies and business plans.
10. Strategically, organizations can be defined in three ways. Using those terms, describe
the Dolphin Resort under Herb Cork and then how it changed under Chris Heppler.
11. Stability strategy is when an organization seeks competitive advantage by reducing
production costs and therefore consumer price.
a. True
b. False
9.4 | Outline methods that managers use to understand their industries and competitors.
7. What is the Five Forces model?8. What seven barriers did Chris explore to determine if the
new Fisherman’s Hotel would weaken the Dolphin Resort’s position in the market?
9.5 | Describe how managers assess the organizations capacity to execute proposed business
plans.
8. What is the BCG Matrix?
9. A(n) analysis is a method of assessing an organization’s strengths, weaknesses,
opportunities, and threats
9.6 | Demonstrate how managers develop divisional
strategies and tactical plans.
11. The balanced scorecard framework intends to ensure that managers translate vision into
strategy and execution of the strategy, both of which are critical to success.
a. True
b. False
9.7 | Compare traditional strategic planning models to an event-based approach.
12. When an organization seeks competitive advantage by providing goods or services, which
are significantly different from the competition, it’s called ______.
a. vertical integration
b. diversification strategy
c. differentiation strategy
d. forward strategy
Chapter 1 self-test answer
1. b. Efficiently and effectively
2. c. People, profit, and planet
3. The art of management refers to the things that managers do to collaborate and
communicate in pursuit of an organizational goal, such as setting up and leading a
monthly sales meeting. The science of management refers to technically focused
activities, such as tracking data to ensure quality on an assembly line.
4. b. False
5. a. The only responsibility of a for-profit company is to maximize the amount of money that
can be made for shareholders.
6. Store managers must understand and listen to customers so that the store can reflect the
local culture and community.
7. c. Leading
8. Controlling was used to ensure that the quality of effects was consistent with the director’s
vision and within the
9. …
10. Without ethical and socially responsible decision making, the other management
functions cannot be properly executed.
11. a—Disturbance handler, b—Spokesperson, c—Leader, d—Resource allocator, e—
Disseminator, f—Figurehead
12. A start-up company does not have an operating history, compared to a growth company,
which has a track record and increases its revenues faster than industry standards or
competitors
13. For-profit organizations distribute profits to shareholders and employees, compared to
nonprofits that must reinvest all surplus resources back into the organization
14. a. First-line manager, b. Middle manager, c. First-line manager, d. Middle manager, e. Top
manager
15. Values—Timeless, Mission—Life of leader, Vision— 1–10 Years
16. When managers focus on the skills where they are strongest, they will see greater
performance results than when they focus more on their weaknesses.
Chapter 4 self-test answer
1.Slogans, Stories, Symbols, Rituals, Ceremonies, and Heroes.
2.d.
3. Rituals communicate and teach the organizational culture, while ceremonies create a sense
of purpose through recognition and celebration.
4. This ceremony celebrated the company’s “Safety First” program commitment to safety, by
recognizing the team with the best overall company performance.
5.At Perfect Planet Interactive, the company ’s value of “embracing your inner geek” is
demonstrated by every employee having an active passion for gaming.
6. Coca-Cola is currently being boycotted by consumers for depleting groundwater in India.
7. False; industries can also be self-regulating.
8. Housing industry: to stabilize the financial industry, the U.S. government in 2010
announced that it would provide refinancing options for homeowners with home loans
less than $729,750. Automobiles: nearly 680,000 cars were re- placed with more fuel-
efficient vehicles, based on a government supported incentive.
9. False. Legislation over the past four decades has been evenly split between Republican and
Democratic presidents.
10. Three dynamics that could lead to team challenges include communication style, leadership
style, and work ethic. The Veteran generation is formal in their communications, believes
that leadership is earned over time, and works to sur- vive. Conversely, the Millennial
generation communicates
informally with their peers, using quick and short communications over mobile devices;
believes that leadership ina technology-driven world is the domain of young people; and
works to live a good life. This could lead to challenging manager situations, including
miscommunication, disparity in needs for recognition and power, and inconsistent
expectations regarding the time spent physically in the office.
11. The balancing loop that affects the inflow of “income” through a summer job.
12. A “balanced approach” to management refers to the man- ager’s responsibility to ensure that
the system and subsystems of an organization achieves long-term stability, with limited
adverse effects on itself or interconnected forces. Understanding how to change system
dynamics positively is a primary competence for a balanced approach to management.
13. This would create an effect on an organization’s energy budget, where it would eventually
have a surplus of energy that could be sold to other users. Thus, the energy budget would
ultimately stop being an expense and actually make money.
14. “Intensity of balancing loop not sufficient to curb behavior in runaway loop”—in order to
find stability in this system, one might recommend investing in alternative, renewable
energy sources that the company would purchase. This would increase the intensity of the
balancing loop for the outflow of savings, and thus counterbalance the anticipating
increase in inflow due the growth projections of cloud computing.
Chapter9 self-test answer
1. strategies
2. acquisition
3. d.
4. Organizational, divisional, and functional strategies are documented with business, tactical,
and operational plans, respectively.
5. Under Herb Cork’s management, we could define the hotel as a reactor, which is a
company that does not follow a consistent strategy, but just responds to changes in the
environment. Under Chris’s management, the Dolphin Resort started as an analyzer,
which is a company whose strategies seek to maintain existing products and services
while pursuing limited innovation but then successfully made the transition from analyzer
to defender, which is a company whose strategies support stable growth and continual
improvement of existing products and services.
6. b; False. Cost leadership strategy is when an organization seeks competitive advantage by
reducing production costs and therefore consumer price. Stability strategy is when an
organization focuses on processes, products, and services that will sustain it over the long
term.
7. The Five Forces Model outlines five forces that determine what managers should expect
when competing in an industry: power of suppliers, power of buyers, substitute products
and services, new entrants, and rivalry. Managers can then assess the major threats that an
organization can expect to encounter in an industry. By outlining and pro- actively
responding to these threats, managers can define more clearly their opportunity to
succeed.
8. Supply-side economies of scale, demand-side benefits of scale, customer switching costs,
capital requirements, incumbent advantages independent of size, unequal access to
distribution channels, and restrictive government policy.
9. The BCG Matrix is a framework developed by the Boston Consulting Group for evaluating
business units according to growth and market share. It allows managers to categorize
quickly their company’s position in the industry where it competes, enabling management to
assess the validity of its strategies and where to invest resources.
10. SWOT (Strengths, Weaknesses, Opportunities, Threats)
11. a; True.
12. b.
