MGMT 3000: Exam 3
126 Cards in this Set
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Define entrepreneurship
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strategic thinking and risk-taking behavior that result in the creation of new business opportunities
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What is an entrepreneur?
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a risk-taking individual who takes actions to pursue opportunities others fail to recognize.
someone who builds successful, long-term businesses from good ideas and hard work
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What are the 12 characteristics of an entrepreneur?
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internal locus of control
high energy level high need for achievement tolerance for ambiguity self-confidence passion and action orientedself-reliance and desire for independence flexibility childhood experience and family environment career and work history emerge during windows of care…
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What does internal locus of control mean?
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belief that they are in control of their own destiny
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What does tolerance for ambiguity mean?
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risk takers and enjoy moments of high degrees of uncertainty
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what does flexibility mean?
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willing to admit problems and errors and correct immediately
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What is the age range and time frame when entrepreneurs emerge during windows of career opportunity?
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22-45
recession
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What are the two parts of the characteristic of having unique and deeply embedded life interests
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creative production-product initiation, working with the unknown, and finding unconventional solutions
enterprise control-enjoyment from running things
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What are the two types of entrepreneurs described by economists
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those who are driven by the quest for new opportunities
those who are driven by absolute need
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Describe the entrepreneurs that are driven by absolute need
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refers to people who start new ventures b/c there are few or no other opportunities available
women or minorities who have experienced the "glass ceiling" effect and could not advance any further in their career women are starting new businesses 2x the rate of the national average
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Define small business and give 3 characteristics
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a privately owned company by one individual or a small group of individuals that has sales not large enough to influence its environment
500 or fewer employees independently owned and operated does not dominate its industry
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The US Small Business Association gives the following statistics ____% of US businesses meet this definition _____% of US businesses employ fewer than 20
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99
87
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What are the three most common routes for starting a new business
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start one
buy an existing one buy and run a franchise
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The SBA says that ___% of businesses are being conducted over the internet
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85
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___________ account for 78% of new jobs created in the US.
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family businesses
30% of family firms survive to the second generation, 12% make it to the third generation, and 3% make it further
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60-80% of small businesses fail within the first 5 years for what 8 reasons?
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lack of experience in the industry
lack of expertise in finance, production, sales lack of strategy and planning poor financial control growing too fast, ahead of cash flow insufficient commitment ethical failure (fraud, embezzlement) not usually lack of initial capital
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What are the two essentials for entrepreneurship?
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good ideas
the courage to give them a chance
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what are the 3 life cycles of entrepreneurial firms
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birth stage
breakthrough stage maturity stage
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Describe the Birth Stage life cycle
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fighting for existence and survival
establishment of the firm obtaining a customer-base finding financing and revenue
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Describe the breakthrough stage life cycle
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coping with growth and takeoff
working on the finances of the company becoming profitable growing safely and consistently
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Describe the maturity stage life cycle
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investing wisely and staying flexible
refining the business strategy continuing growth safely managing for continued success
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What is the business plan?
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summarizes the business strategy and structure in a document that should describe the match between abilities and requirements for producing and marketing
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What are the 5 things a business plan should include
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business goals and objectives
strategies used to achieve these goals a plan on how the strategies will be implemented good exit strategy less that 20 pgs length
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What is the most important financial statement of the business plan?
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The Cash budget
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What are the 4 different forms of ownership
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sole proprietorship
partnership corporation LLC(limits liability, taxed as a partnership)
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Describe the three types of external financing methods
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debt- borrowing from another individual, bank, or financial market (must be paid back with interest)
equity-Angel Investor, Venture capitalist (groups of investors seeking to make profits off companies with potential for rapid growth), they do not lend money, they supply capital for stoc…
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What is a franchising agreement?
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operation of the franchise business by the entrepreneur (the franchisee) under a license by a parent company (the franchisor). The entrepreneur pays the parent company for use of trademarks, products, formulas, and business plans
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What are the advantages and disadvantages of franchising?
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Ad- reduced financial risk of new business success thru experience provided by a franchisor. Training, financial, and management support by franchisor
Disad-start-up fees to purchse franchise, limitations of franchise (market are, product, customers), imposed operational controls of fran…
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Define organizational design
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the set of elements that can be used to configure an organization
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define job specialization
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refers to the process of dividing a large task into successfully smaller jobs
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What are the advantages of job specialization
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workers become more proficient at each task
transfer time between tasks decreases more narrowly defined jobs have specialized equipment avaliable for assistance it is easier to replace a specialized employee
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What are the drawbacks to job specialization
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work is boring for specialized employees and there are no challenges, which may cause the quality of the work to suffer
the benefits do not always occur
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define departmentalization
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the grouping of jobs according to a logical arrangement
LOOK AT CHART
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What does the saying "The Emperor is Far Away" mean
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you can get away with certain illegal activities b/c Beijing is faw away and while there is some state government, it is nothing compared to the Emperor's power
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Define span of management
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number of people who report to a particular manager
****no clear cut prescriptions for the optimal span
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Define tall vs. flat organiztions and decribe each
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The number of layers of organizational hierarchy
more layers->tall, more expensive because of number of managers involved, more communication problems because of the amount of people less layers->flat, flatter organiztions have higher levels of employee morale and productivity, they are …
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What are the 4 situational variables that determine optimal span and descibe each
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contact required-for jobs that require more supervision or coordination require narrower (taller) spans of control
level of subordinated education and training- with highly skilled individuals, they can more or less be supervised less so a flatter span of control would be more appropriat…
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define authority
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power that has been legitimized by organization
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Define delegation and the reasons for this
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establishment of pattern of authority between superior and subordinates, the process by which managers assign a portion of their total workload to others
manager gets more work done by utilizing skills of subordinates, helps develop subordinates by having them participate in decision mak…
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define decentraliztion
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systematically delegation power and authority throughout the organization to middle and lower level managers. they delegate as far down the shain of command as possible
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What are the three determining facors to decentralization
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external environment- as complexity and uncertainty increase, the need for decentraliztion increases
organizational history- most firms continue to do what they have always done nature of decisions-as cost and risk incerase, the need for centraliztion increases
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define centraliztion
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systematically retaining power and control in the hands of higher-level managers
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Employees at the bottom must perform tasks to satisfy _________goals Employees at the top must know about the activities and accomplishments of the _____
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top level
bottom
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What are the 5 primary methods used to coordinate activities of members, define
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*direct supervision-all work is coordinated by supervisors through continually-monitorer rules
*standardization of work processes-routine jobs may be coordinated through standard operation procedures or by the technology itself that regulates the activities *standardization of the output…
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Describe the Matrix Design
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2 overlapping bases of departmentaliztion
set of product groups or temporary departments are superimposed across the functional departments employees become members of their departments and project team creates a multiple command structure where an employee reports to departmental and pr…
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What are matrix design advantages
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enhances organizational flexibility
creates high motivation and increased organizational commitment opportunity to learn more skills efficient way to use human resources team members serve as bridges to their departments useful for decentraliztion
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What are matrix design disadvantages
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employees uncertain about reporting relationships
managers can use design as an anarchy and have complete control they dynamics of group behavior could lead to slower decision maing, one-person domination, compromise decisions, or a loss of focus more time may be needed for coordination …
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What did the study by Burns and Stalker state?
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the external environment was related to the internal organization structure of 20 English firms.
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Burns and described mechanistic organizational structure and organic organizational structure how?
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mech-iuf the external environment was stable, the interneal organziation was managed by rules, procedures, and clear heirarchy or authority; it was also very centralized and managerial decisions were made at the top
org-in rapidly changing external environments, the internal organization…
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Describe the Beurocratic Model of Organization Design
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created by Max Weber.
bureaucracy-model of organization design based on a legitimate and formal system of authority Weber viewed the model as logical, rational, and efficient (the one best way to do things)
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What are the 6 characteristics of the Bureaucratic model of Organization Design
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it should adopt a distinct division of labor, and each position should be filled by an expert
it should develop a consistent set of rules to ensure uniform performance it should establish hierarchy of positions that create a chain of command from top to bottom managers should conduct bus…
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What is the Peter Principle
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every employee will be promoted to his or her level of incompetence. It explains that competence at one level in the structure will not necessarily lead to competence at the next level
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What is the System Four Organizaitonal Structure and who proposed this design
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considered to be the opposite of bureaucracu. central premise is that there are 4 kinds of management systems
Rensis Likert
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What are the 4 kinds of management systems under the System Four Organizational Structure
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The exploitative-Authoritative Style- characterized by the threat of punishment or hostile attitudes. Top mgmt does the decision making
The Benevolent-Authoritative Style- slightly less hostile and threatening, but all decisions, goal setting, are under control of top mgmt The Consultati…
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Are leadership and management the same?
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NO. Leaders have more of their focus on the long-term aspects of an organization, managing external forces, and producing dramatic change
Organizations need both to be effective: leaders make changes and managemetn to achieve orderly results
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Describe Transactional Leadership
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These leaders focus managing transactions between the organiztion and it speople by giving recognition or pay increases as rewards and penalties for those employees that dont perform well
management by exepetion is often utilized by transactional leaders as they only recognize people or …
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Describe Transformationale Leadership
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goes beyond ordinary expectations by transmitting a sense of the mission, stimulating learning experiences, and focuses on changing the attitudes and assumptions of employees
research has shown transformational is superior to transactionin in instpiring workers to exert extra effort, emp…
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What are the 4 characteristics of transformational leadership
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charismatic- in order to provide the sense of mission, gain trust, and motivate
individualized consideration- work to treat each person the exact same and give time and personal attention; encouraging others intelectually stimulating- promotes continued learning, encourages logical and r…
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What are physical leadership traits
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leaders tend to be taller, heavier, have better health and physique, have a higher energy output, and have more pleasant and attractive appearances than their subordinates.
cultural stereotypes may have played a role because not the same traits across the board too weak or inconsistent f…
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What are intellectual leadership traits
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more intellegent because of careful and precise problem-solving
sometimes subordinates have different goals or objectives than you so they reject your ideas
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What are leadership personality traits
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self-confidence and self-esteem
honesty and integrity situational factors determine whether or not a personality trait turns positive or negative
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Describe the Authoritarian, Democratic, and Laissez faire Leadership. Describe the results of this study
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Kurt Lewin (german behaviroal scientist) conducted a study that placed twn year old boys into three groups of five to participate in an after-school activity under the leaderhip of a grad student trained to give leadership in these three methods. They roated thru the three types every 6 w…
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Describe the Michigan studies in relation to leaderhsip behaviors
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Rensis Likert performed these by conducting extensive interviews and identified 2 forms of leader behavior that were on opposite ends of the continuum.
job centered- this behavior involves paying close attention to subordinates work, explaining work producres, and being keenly interested…
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Describe the Ohio State Studies
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also found two basic leadership behaviors but they are not on a continuum, they are independent
initiating-structure- clearly defines subordinates' roles so everyone knows what is expected, establishes formal lines of communication, and determines how tasks will be performed. employees …
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Define leadership grid
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provides a means to evaluate leadership styles, and train managers according to an ideal
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What are the two basic leader behaviors that were established by the leadership grid study
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concern for production-horizontal axis; similar to job-centered/initiating structure. They focus on the job aspects of behavior
concern for people-vertical axis; similar to employee-centered/consideration. Focus on the human aspects of behavior
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What are the 5 extreme forms on the leadership grid?
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1,1-impoverished manager-low concern for people and production
9,1-authority compliance-high concern for production, low concern for people 1,9-country club manager-high concern for people, low concern for production 5,5-middle of the road manager-moderate concern for production and peop…
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Define situational leadership
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These approaches believe that the appropriate leader behavior varies from one situation to the next, so the goal was to identify key situational factors and specify how they interact and affect behavior
A few studies have enhanced views on situational leadership and have led to the concl…
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Describe Vroom's Decision Tree Approach
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attempts to prescribe a leadership style appropriate for a given situation
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What are the two basic assumptions in Vroom's tree Approach
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The degree to which subordinates should be encouraged to participate in decision making depends on the characteristics of the situation
not one of the decision making processes is best for all situations
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Under Vroom's Approach, what are the 5 different decision styles?
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telling-the manager in charge decides by himself and then announces it to the group
selling-the manager speaks with group members at a meeting, defining for them the problem and its boundaries, and then facilitates a group discussion as they make the decision together consulting(individu…
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Telling is appropriate for groups with ____________________, selling is appropriate for groups who are ____________________________, and consulting is best for followers who are ______________--
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low maturity
able, but unwilling willing, yet unable to perform the task
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Describe the LPC(least preferred co-worker) theory
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1st situational theory, created by Fred Fiedler, He identified task-oriented and relationship-oriented as the 2 basic styles of leadership behavior. He believed that the appropriate style of leadership behavior varies with situational favorableness. the style used is a reflection of the l…
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Under the LPC theory, describe the three components of the Favorableness of Situation (leaders point of view)
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*Leader-Member relations-nature of the relationship; a good relationship has high trust, respect, and confidence between each member, and are generally more favorable
*Task Structure-degree to which a task is defined. Structured tasks are more routine, easily understood, unambiguous, and…
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When a situation is either most or least favorable it is?
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Task oriented
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When a situation is moderately favorable it is?
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Relationship-oriented
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Path Goal Theory is?
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(Evans and House) a direct extension of expectancy theory. the primary functions of a leader are to make valued/desired rewards available in the workplace, and to clarify to subordinates how they can get them
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Under Path Goal theory, what are the 4 different leader behaviors?
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direct-let subordinates know what is expected of them, give guidance, and schedule work
supportive-friendly/approachable, generally show concern for employees' welfare, and treat everyone equallyparticipative-consult with subordinates, allow participation in decision making, and solicit …
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Describe the Leader Member Exchange Approach
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asserts that supervisors have different relationships with different subordinates, and each superior-subordinate pair is called a VERTICAL DYAD
supervisors normally establish a special relationship with a small number of subordinates (in group) and those without this relationship are cal…
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Define substitutes for leadership
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identifies certain situations in which leader behaviors are neutralized/replaced by characteristics of subordinates, the task, and the organization
nurses and doctors do not wait for directive leader behavior in an emergency
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What is the Transparency Int'l Corruption Perception Index
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determined by expert assessments and opinion surveys that ranks 180 countries on their perceived levels of corruption. Indicates the degree of public sector corruption as perceived by business people and country alalysts(0 is very corrupt and 10 is clean).
germany-7.6 usa-7.3 italy-4.8 c…
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What is the TI Bribe Payers Index
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an evaluation of the supply side of the corruption-the propensity of firms from industrialized countries to bribe abroad
W. Europe-high score (good) Chine, India, and developing world is low (bad)
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Describe the 6 parts of perception
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size-the larger the object, the easier to perceive
intensity-greater the intensity, more likely to be perceived contrast-have high contrast w/ surrounding environment, more likely to be perceived motion- objects that are moving, more likely to be perceived novelty-stimuli that is new and…
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Define perceptual organization
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the process of grouping environmental stimuli into recognizable patterns. Stimuli isn't seen as random observations, but is organized into recognizable and meaningful patterns and the principles that we base our sensation organization on
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What are the 4 principles we base out sensation organization on
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figure ground-we tend to perceive verbal communication as a figure in itself and sometimes miss the more important nonverbal communication
similarity- this goes along with frequency and intensity factors of attention with athletic team jerseys as examplesproximity-things that you lean ab…
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____% of the content of messages is trhough facial expressions and body posture ____% is thru inflection and tone _____% is thru words
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55
38 7
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Name 3 different kinds of nonverbal communication
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images- kinds of words people choose to use; choices conveys more than just the strict meaning of the words
settings- context of environment; boundaries, familiarities, home turf, body language-how people position their bodies, distance b/w communicators, eye contact, body/hand movement,…
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Name the amount of feet in intimate space, personal space, social space, and public space personal reaction bubbles
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1.5
4 12 25
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Books on tape are recorded around _________ wpm as a comfortable range to hear words slide presentations are ____wpm
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150-160
100
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conversations are around _____wpm. adults can hear with complete comprehension at ____wpm
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200
300
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What is the Halo effect
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when one personality trait influences perception on the whole
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What is selective perception
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systematically screening out info that we don't want to hear
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what is implicit personality theories?
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thaking the personalities of people that you know and categorizing new acquaintances with those perceptions
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What is projection perceptual error?
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dysfunctional process of attributing our own feelings and characteristics to to others
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First Impression
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forming impressions based on very little information can be damaging
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What is stereotyping?
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categorizing individuals based on one or two traits and giving them other characteristics just because they met the qualifying characteristics for the category
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Describe visibility when referring to discrimication and prejudice
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when a small percent of a large group belong to one category, they are more likely to be noticed
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Describe contrast when related to discrimination and prejudice
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when one or more individuals are added to the group that may be different from other members, the group will begin to focus on what makes them different
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describe assimilation when referring to discrimination and prejudice
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involves the application of stereotypes about a person's social category which makes minority participants not unique but more as representatives of their social category
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The self-fulfilling prophesy (pygmalion effect) can be put into what 4 categories
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"our actions towards other impact others beliefs about us causing their actions toward us to reinforce our beliefs about ourselves which influence out actions in the end"
*input-people that are expected to be good performers are given better suggestions and ideas *output expected-specifi…
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define behavior
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a combination of personality and environment
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define personality
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relatively stable set of psychological attributes that distinguish one person from another. Managers should understand the Basic "Big 5" as well as the way they affect behaviors
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For observing others behavior, _________ influence of personality and ____________ situational influences
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overestimate
underestimate
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For explaining out behavior, __________ situational influences and _______________ our personality characteristics
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overestimate
underestimate
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What are the "big 5" personality traits?
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Openness
Conscientiousness Emotional Stability Agreeableness Extraversion
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What is agreeableness mean as a part of the "big 5"
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A person's ability to get along with others
those with high agreeableness are more gentle, cooperative, forgiving, and good natured and WORK BETTER WITH OTHERS AT WORK. those with low agreeableness are irritable and short tempered
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What is conscientiousness mean as a part of the "big 5"
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the number of goals on which a person focuses. those with fewer goals are organized, systematic, careful, and tend to be higher performers
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What does emotional stability mean as a part of the "big 5"
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measure of the extent to which an individual is calm, poised, resilient, and secure.
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What does extraversion mean as a part of the "big 5"
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person's comfort level with relationships, tend to be higher overall job performers and more likely to be attracted to a job based on personal relationships
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What does openness mean as a part of the "big 5"
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measure of an individual's rigidity of beliefs and range of interests. those with high levels tend to be more willing to listen to new ideas and to change as a result of new info
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What does Locus of control mean?internal and external
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extent to which people believe their behavior has a real effect on what happens to them
internal-hard work leads to success, they control their own lives external-forces outside an individual's control dictate life events
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What does self efficacy mean?
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beliefs about one's own capabilities to perform a task; those with high levels believe they can perform well which those with low levels doubt their abilities
self confidence
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What does self esteem mean?
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extent to which one believes that they are worthwhile and deserving as an individual.
seek high status jobs
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Define attitudes
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combination of beliefs and feelings that people have about specific ideas, situations, or other people
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What are the 3 core components of attitudes
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affective-(like/dislike) feelings and emotions towards a situation
cognitive(prior experience)- derive from perceived knowledge of a situation, subject to individual peceptionsIntentional (future action)- how individual expect to behave in a given future situation
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What is cognitive dissonance?
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uncomfortable feeling that exists as a result of conflicting attitudes.
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What is self-awareness
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the basis for all the others; person's capacity for being aware how he/she is feeling. those with high levels guide their lives and their behaviors more effectively
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What is self management?
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capacity to balance anxiety, fear, and anger to avoid its interfering with accomplishing things
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What is social awareness?
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understanding how others are feeling without being told
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what is relationship management?
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getting along with others, and establishing positive relationships
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Is EI(emotional intelligence) biologically based?
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NO!even adults may develop or increase this
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What is satisfaction and performance?
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extent to which one is gratified by or fulfilled in work. Determined by personal (needs/aspirations), group (social relationships), and organizational (work atmosphere) factors
if someone is satisfied, absenteeism and turnover decrease while contributions increase satisfaction does not l…
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What is absenteeism, tardiness, and turnover
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people who are satisfied and are rarely late or absent from work
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How does job satisfaction have to do with mental and physical health?
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job satisfaction contributes to overall better health for individuals where dissatisfaction leads to poor health and stress
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How does job involvement have to do with job satisfaction?
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people will be highly involved in their job if they actively participate in it, view it as central to their life, and see their performance as a central part of their self-concept
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How does organizational commitment have to do with job satisfaction?
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one's identification with and attachment to the organization itself. those with high levels see themselves as true members of the organization for the long-term, an dmay overlook minor dissatisfactions
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MGMT 3000: EXAM 1