Introduction to Management 301

Study Guide Terminology Review and Material for the Final Exam
This is to be used as an aid for studying for the final exam. Questions for the exam
may come from the slides, lectures, and readings. This is not a complete list of the
material for the final exam.
Management is about getting the right work done well by (1)implementing
processes and practices to develop and deliver competitive advantage and superior
performance in innovative and socially responsible organizations and (2) developing
and using the critical skills that individuals need to know and have in order to: work
more effectively with others in organizations, to work well in teams, and to lead
teams and organizations successfully.
Strategy - is a companys action plan for outperforming its competitors and
achieving superior profitability.
Competitive Advantage - meeting customer needs more effectively, with
products or services that customers value more highly, or more efficiently, at lower
cost.
Sustainable Competitive Advantage is giving customers lasting reasons to
prefer a firms products or services over those of its competitors.
Core Values - are the beliefs, traits, and behavioral norms that employees are
expected to display in conducting the firms business and in pursuing its strategic
vision and mission.
Organizational Structure - A formal system of task and reporting relationships
that coordinates and motivates organizational members so they work together to
achieve organizational goals.
Invention is the creation of a product or process that has not previously been
recognized
Creativity is the ability to produce a novel AND useful idea
Innovation is implementing those novel and useful ideas into some new device or
process
Rogers Five Factors - that influence an individuals decision to adopt or reject an
innovation:
Relative Advantage: How improved an innovation is over the previous
generation.

Compatibility: The level of compatibility that an innovation has to be

assimilated into an individuals life.
Complexity or Simplicity: If the innovation is perceived as complicated or
difficult to use, an individual is unlikely to adopt it.
Trialability: How easily an innovation may be experimented. If a user is able to
test an innovation, the individual will be more likely to adopt it.
Observability: The extent that an innovation is visible to others. An innovation
that is more visible will drive communication among the individuals peers
and personal networks and will in turn create more positive or negative
reactions
Innovation Strategy Types
First mover, innovation culture, able to create and then dominate the market
against fast followers
Fast follower, firm must very good with innovation and have strong R&D, and
good at figuring out why the first mover was not so hot so you can jump in
fast and grab the market.
Niche strategy, focus on specific niche market, requires a close connection to
customers on what they want as far as product differentiation
Reactive, firms that are followers and have a focus on operations, have a wait
and see approach and look for low risk opportunities, will copy proven
innovation.
Development cycle time - The time elapsed from project initiation to product
launch, usually measured in months or years.
Partly parallel development processes - A development process in which some
(or all) of the development activities at least partially overlap. That is, if activity A
would precede activity B in a partly parallel development process, activity B might
commence before activity A is completed.
Lead users - Customers who face the same general needs of the marketplace but
are likely to experience them months or years earlier than the rest of the market
and stand to benefit disproportionately from solutions to those needs.
Stage-gate process developed by Robert G. Cooper - The stage-gate process
provides a blueprint for moving projects through different stages of development. At
each stage, a cross-functional team of people (led by a project team leader)
undertakes parallel activities designed to drive down the risk of a development
project. At each stage of the process, the team is required to gather vital technical,
market, and financial information to use in the decision to move the project forward
(go), abandon the project (kill), hold, or recycle the project. In Stage 1, the team
does a quick investigation and conceptualization of the project. In Stage 2, the

team builds a business case that includes a defined product, its business
justification, and a detailed plan of action for the next stages. In Stage 3, the team
begins the actual design and development of the product, including mapping out
the manufacturing process, the market launch, and operating plans. In this stage,
the team also defines the test plans utilized in the next stage. In Stage 4, the team
conducts the verification and validation process for the proposed new product, and
its marketing and production. At Stage 5, the product is ready for launch, and full
commercial production and selling commence.
go/kill decision points (Stage-gate process) - decision points in the
development process where managers must evaluate whether or not to kill the
project or allow it to proceed.
Entrepreneurial opportunities - Those situations in which new goods, services,
raw materials, and organizing methods can be introduced and sold at greater than
their cost of production.
Entrepreneurial action - Action through the creation of new products/processes
and/or the entry into new markets, which may occur through a newly created
organization or within an established organization.
Entrepreneurial mind-set - Involves the ability to rapidly sense, act, and
mobilize, even under uncertain conditions.
Corporate entrepreneurship - Entrepreneurial action within an established
organization
Entrepreneurial philosophy toward rewards - One that compensates
employees based on their contribution toward the discovery/generation and
exploitation of opportunity
Entrepreneurial orientation toward culture - A focus on encouraging
employees to generate ideas, experiment, and engage in other tasks that might
produce opportunities
Penetration strategy - Encouraging existing customers to buy more of the firms
current products. Relies on taking market share from competitors and/or expanding
the size of the existing market.
Product development strategy - Developing and selling new products to people
already purchasing the firms existing products. Capitalizes on existing distribution
systems and on the corporate reputation of the firm
Market development strategy - Selling the firms existing products to new
groups of customers. New geographical market - Selling in new locations. New
demographic market - Selling to a different demographic group. New product use Selling an existing product, which may have a new use, to new groups of buyers

Diversification strategies - Selling a new product to a new market

Backward integration - A step back (up) in the value-added chain toward the raw
materials
Forward integration - A step forward (down) in the value-added chain toward the
customers
Horizontal integration - Involves a different, but complementary, value-added
chain diversification strategy
Participative management style - Manager involves others in decision making
Time management - Process of improving an individuals productivity through
more efficient use of time
Task environment - the set of forces and conditions that originate with global
suppliers, distributors, customers, and competitors; these forces and conditions
affect an organizations ability to obtain inputs and dispose of its outputs
General environment - includes the wide-ranging global, economic, technological,
sociocultural, demographic, political, and legal forces that affect the organization
and its task environment. For the individual manager, opportunities and threats
resulting from changes in the general environment are often more difficult to
identify and respond to than are events in the task environment.
Economies of scale - are the cost advantages associated with large operations.
They result from factors such as manufacturing products in very large quantities,
buying inputs in bulk, or making more effective use of organizational resources than
do competitors by fully utilizing employees skills and knowledge.
Social structure - is the traditional system of relationships established between
people and groups in a society. Societies differ substantially in social structure.
National culture - is the set of values that a society considers important and the
norms of behavior that are approved or sanctioned in that society. Societies differ
substantially in the values and norms they emphasize.
Globalization - the shift toward a more integrated and interdependent world
economy
Multinational enterprise (MNE) - any business that has productive activities in
two or more countries
Global Environment - Set of forces and conditions in the world outside the
organizations boundaries that affect the way it operates and shape its behavior.
Changes over time. Presents managers with opportunities and threats.

Global Outsourcing - The purchase or production of inputs or final products from

overseas suppliers to lower costs and improve product quality or design.
Barriers to Entry - Factors that make it difficult and costly for the organization to
enter a particular task environment or industry
Economic Forces - Interest rates, inflation, unemployment, economic growth, and
other factors that affect the general health and well-being of a nation or the
regional economy of an organization.
Technological Forces - Changes in the technology that managers use to design,
produce, or distribute goods and services
Sociocultural Forces - Pressures emanating from the social structure of a country
or society or from the national culture
Political and Legal Forces - Changes in laws and regulations, such as
deregulation of industries, privatization of organizations, and increased emphasis on
environmental protection.
National culture - includes the values, norms, knowledge, beliefs, moral principles,
laws, customs, and other practices that unite the citizens of a country.
Values - Ideas about what a society believes to be good, right, desirable and
beautiful. Provide the basic underpinnings for notions of individual freedom,
democracy, truth, justice, honesty, loyalty, love, sex, marriage, etc.
Norms - Unwritten, informal codes of conduct that prescribe how people should act
in particular situations and are considered important by most members of a group
or organization
Individualism - is a worldview that values individual freedom and self-expression
and adherence to the principle that people should be judged by their individual
achievements rather than by their social background.
Collectivism - is a worldview that values subordination of the individual to the
goals of the group and adherence to the principle that people should be judged by
their contribution to the group.
Power Distance - Degree to which societies accept the idea that inequalities in the
power and well-being of their citizens are due to differences in individuals physical
and intellectual capabilities and heritage
Uncertainty Avoidance -The degree to which societies are willing to tolerate
uncertainty and risk.
High Uncertainty Avoidance - Societies are more rigid and expect high
conformity in their citizens beliefs and norms of behavior. In these societies,

structured situations are preferred because they provide a sense of security.

Societies high on uncertainty avoidance are more rigid and skeptical about people
whose behaviors or beliefs differ from the norm.
Low Uncertainty Avoidance - Cultures are easygoing, value diversity, and
tolerate differences in personal beliefs and actions societies that have an
achievement orientation value assertiveness, performance, success, competition,
and results.
Long Term Orientation - A worldview that values thrift and persistence in
achieving goals.
Short Term Orientation - A worldview that values personal stability or happiness
and living for the present.
Diamond of National Competitive Advantage - Consists of Home Country
Advantage, Firm Strategy Structure and Rivalry (different styles of management and
organization; degree of local rivalry), Factor Conditions (Availability and relative
prices of inputs e.g. labor, materials, etc.). Related and Supporting Industries
(Proximity of suppliers, end users, and complementary industries), and Demand
Conditions (Home market size and growth rate; buyers' tastes).
Diversity - Dissimilarities/differences among people in age, gender, race, ethnicity,
religion, sexual orientation, socioeconomic background, and capabilities/disabilities
Glass ceiling - A metaphor alluding to the invisible barriers that prevent minorities
and women from being promoted to top corporate positions.
Equal Pay Act, 1963 - Requires that men and women be paid equally if they are
performing equal work.
Title VII of the Civil Rights Act, 1964 - Prohibits discrimination in employment
decisions on the basis of race, religion, sex, color, or national origin; covers a wide
range of employment decisions, including hiring, firing, pay, promotion, and working
conditions.
Age Discrimination in Employment Act, 1967 - Prohibits discrimination against
workers over the age of 40 and restricts mandatory retirement.
Pregnancy Discrimination Act, 1978 - Prohibits discrimination against women in
employment decisions on the basis of pregnancy, childbirth, and related medical
decisions.
Americans with Disabilities Act, 1990 - Prohibits discrimination against disabled
individuals in employment decisions and requires that employers make
accommodations for disabled workers to enable them to perform their jobs.

Civil Rights Act, 1991 - Prohibits discrimination (as does Title VII) and allows for
the awarding of punitive and compensatory damages, in addition to back pay, in
cases of intentional discrimination.
Family and Medical Leave Act, 1993 - Requires that employers provide 12
weeks of unpaid leave for medical and family reasons, including paternity and
illness of a family member.
Socioeconomic diversity - requires that managers be sensitive and responsive to
the needs and concerns of individuals who might not be as financially well off as
others when setting meeting times and required travel.
Legal basis to prohibit discrimination on the basis of Sexual Orientation
-20 states have laws against discrimination based on sexual orientation. The New
Jersey Law Against Discrimination prohibits discrimination based on sexual or
affectional orientation. There is a 1998 Executive Order that prohibits discrimination
in federal workplaces. Currently a bill is before the US Congress to prohibit
discrimination on the basis of sexual orientation.
Distributive Justice - A moral principle calling for fair distribution of pay,
promotions, and other organizational resources based on meaningful contributions
that individuals have made and not personal characteristics over which they have
no control.
Procedural Justice - A moral principle calling for the use of fair procedures to
determine how to distribute outcomes to organizational members.
Perception - The process through which people select, organize, and interpret
what they see, hear, touch, smell, and taste to give meaning and order to the world
around them
Stereotype - Simplistic and often inaccurate beliefs about the typical
characteristics of particular groups of people
Bias - The systematic tendency to use information about others in ways that result
in inaccurate perceptions
Similar-to-me effect perceive others who are similar to ourselves more
positively than we perceive people who are different
Overt Discrimination - Knowingly and willingly denying diverse individuals access
to opportunities and outcomes in an organization
Quid pro quo - Asking for or forcing an employee to perform sexual favors in
exchange for receiving some reward or avoiding negative consequences.
Hostile work environment - Telling lewd jokes, displaying pornography, making
sexually oriented remarks about someones personal appearance, and other sex-

related actions that make the work environment unpleasant. Interferes with their
ability to perform their jobs effectively
Four Barriers in Managing Multi-cultural Teams 1. Direct versus indirect
communication, 2. Trouble with accents and fluency, 3. Differing attitudes toward
hierarchy, 4. Conflicting decision-making norms.
Strategy Intervention Types to Overcome Barrier in Managing Multicultural Teams 1. Adaptation: working with or around differences, 2. Structural
intervention: reorganizing to reduce friction, 3. Managerial intervention: making
final decisions without team involvement, 4. Exit: voluntary or involuntary removal
of a team member.
Ethics are the inner guiding moral principles, values, and beliefs that people use to
analyze or interpret a situation and then decide what is the right or appropriate way
to behave.
Societal Ethics - Standards that govern how members of a society should deal
with one another in matters involving issues such as fairness, justice, poverty, and
the rights of the individual
Organizational Ethics - Guiding practices and beliefs through which a particular
company and its managers view their responsibility toward their stakeholders. Top
managers play a crucial role in determining a companys ethics
Occupational Ethics - Standards that govern how members of a profession, trade,
or craft should conduct themselves when performing work-related activities
Trust - willingness of one person or group to have faith or confidence in the
goodwill of another person
Reputation - esteem or high repute that individuals or organizations gain when
they behave ethically
Self-dealing - occurs when managers take advantage of their position to further
their own private interests rather than those of the firm.
Short-termism - is the tendency for managers to focus excessively on short-term
performance objectives at the expense of longer-term strategic objectives. It has
negative implications for the likelihood of ethical lapses as well as company
performance in the longer run.
Stakeholders - The people and groups that supply a company with its productive
resources and so have a claim on and stake in the company.
Social Responsibility - The way a companys managers and employees view their
duty or obligation to make decisions that protect, enhance, and promote the welfare
and well-being of stakeholders and society as a whole

Engagement Based on the level of an employees personal satisfaction in their

role at the company and the level of an employees contribution to the companys
success
Disengagement - Employees are disconnected from organizational priorities, Feel
underutilized, skeptical, indulge in contagious negativity, Focus on complaints and
the perceived failure of procedural justice in the organization, Lower productivity,
Limited to no discretionary effort, and Lower creativity
Empowerment -The process of giving employees at all levels in the organization
the authority to make decisions, be responsible for their outcomes, improve quality,
and cut costs
Justice rule is that an ethical decision distributes benefits and harms among
people and groups in a fair, equitable, or impartial way.
Tragedy of the commons the idea that the pursuit of self-interest with no
consideration for societal interests leads to disaster