Example questions of what might be on test (Exam

date: 02/02/24)

Types of entreperneurships

Discuss the function of balance

The concept of balance in management refers to the optimization of various elements within
and outside an organization. Achieving functional balance is essential for the effective
functioning, sustainability, and success of an organization.
- Optimal Resource Utilization
- Stakeholder Relationships
- Adaptation to Change
- Operational Effectiveness

E.g:

1. External Material Balance

Involves managing tangible assets like resources, technology, and infrastructure to navigate
and respond effectively to external factors and market demands.

“Material benefits (usually monetary) that the organization receives from its environment
cover all the costs of the organization's functioning”

2. External Social Balance

Managing an organization's reputation, interactions, and impact on society to respond to
external social factors, like stakeholder relationships, cultural dynamics, and public
perception.

“the level of social acceptance of an organization”

3. Internal Material Balance

Managing tangible resources, infrastructure, and technology within the organization to
optimize operational processes and support its overall objectives.

“wages and related benefits (bonuses, awards, stock

options, social benefits, privileges, etc.)
work input, commitment, innovativeness, and loyalty, which can all, more or less accurately,
be evaluated in terms of money.”

4. Internal Social Balance

Managing relationships, communication, and cultural dynamics within the organization to
foster a positive workplace environment, teamwork, and employee well-being.
“mutual acceptance, understanding or even emotional involvement between an organization
(in practice – its management) and the organizational participants (members). “

Discuss the difference between a small business and an

entrepreneurship
Refers to: Presentation 2

Small business:
- Start of small, remain small
- Follows a more traditional path (nothing out of the ordinary)
- Minimal change over time

Example: Husband and Wife open a new restaurant in the suburb (does nothing differently
from other restaurants)

Entrepreneurial business:
- Doing something differently and/or better
- Aims to change something in the world
- Start as a entrepreneurship / Start of small, evolve into entreprenerial business
- Fast growth- alot of chage over time (opportunity orientated)

Example: Beggingns of McDonalds was an entreprenerial business because of their new

way of making and serving burgers (starting the fast-food business)
Workshop 1: Disadvantages of scientific management

Workshop 2. Designing business ideas

Workshop 3. Innovations in the music market

Workshop 4: PEST analysis

Presentation 1: Introduction

Scientific management principles:

1. Implement and elaborate scientific methods for each task
2. Select, train, and develop each worker for a specific task
3. Control that the methods are being used
4. Divide the work of managers & workers- so that managers can use scientific methods
and workers do the actual work

Frank & Lillian Gilbreth

- Pioners
- Used camera analysis to establish sequence motion

Ghant chart
- tool for quality controls
Disadvantages of Scientific management
- Work dissatisfaction
- Extensive supervision
- No human touch, people are considered as robots
- No place for creativity

Fayols function of management

1. Planning
2. Organizing
3. Commanding
4. Coordinating
5. Controlling

Hawthorne effect
- Change of behavior of individuals that are aware of being observed.

Human relations movement

- employees who lack social needs participate in internal groups at work
- Employee satisfaction increases productivity
- Informal structure of the organization

● Theory X
- Employees dislike their work, are lazy, must be coerced
- Supporters of this theory will mostly punish workers
● Theory Y
- Employees like work, are creative, seek responsibility
- Supporters of this theory will try to create possibilities for the employees to show
what they are capable of.

Presentation 2: Innovation & Entrepreneurship

Entrepreneurship

Requiers:
- requires the existence of opportunities
- Requires differences between people
- Risk-bearing is necessary
- Requires organizing
- requires a form of innovation
Personal resources of the entrepreneur

Types of entrepreneurship:
Necessity based or Opportunity Based
- Family entrepreneurship
- Intellectual entrepreneurship
- Social entrepreneurship
- Garage entrepreneurship
- Corporate entrepreneurship
- entrepreneurship with passion
- Women entrepreneurship
- Minority and immigrant entrepreneurship

● Garage entrepreneurship
- Garage, basement, dormitory, kitchen (places of starting the business)

● Strengths of Family Businesses

- Culture and values
- Commitment
- Knowledge
- Flexibility with work, money, and time
- Longe range thinking
- Stable culture
- Speedy decisions
- Reliability and trust
 ● Challenges of family businesses
- Resistance to change
- Managing transitions
- Raising capital
- Succession
- Emotional involvement
- Leadership

Types of entrepreneurship:
- Necessity based & Opportunity based

Continuous innovation enhances existing products, services, and processes, while

Discontinuous innovation creates entirely new products, services, or markets.

Thinking through analogy; products based on animals

Methods of innovation Technoloical progress, new machines, appliances, new process

Presentation 3: Organization and its environment

Environment change
● Stable
- Slow, predictable
- stable competition and rules
- Well-defined customer needs
● Turbulent
- Rapid change in different directions, difficult to predict
- unstable rules of competition
- Changing customer needs & preferences
- Fast technological changes

Environmental analysis
Macro-environment: PEST
Micro-environment: PORTER Five Forces
Task-environment: SWOT
- What changes are taking place in the market?
- Are these changes affecting the company or competitive environment?
- Do they create opportunities or threats for the company?
Macro environment
(Forces shaping the conditions of business)
Four sectors:
● Political and Legal
- Ex: New law regarding food waste for grocery stores
- Not influenced by management of the organization

● Economical and finaicial

- Suppliers, Clients, Cooperators, Competition, Financial institutions, banks, investors

● Social and cultural

- Social groups that the organization comes into contact with
- Not influenced by management of the organization

● Tehcnological and Physical

- Development of various technologies, which may effect the functioning of the
organization.

Tangible & Intangible resources

Tangible resources include financial means (such as cash, accounts receivable, credits,
regular grants, etc.), real estate, machines, equipment, means of transport, and supplies of
finished products, raw materials, other materials and semi-finished products.

Intangible resources are primary in relation to the material resources. They can be
transformed into material resource. Intangible resources are recognized as more important
than tangible ones.
- Human resources
- Organizational culture
- Information
- Knowlagde
- Strategy
- Contacts, Information

Adaptive transformation process

Occurs as a result of serious qualitative changes in the external environment of the
organization.
Redefinition of the relationship between the organization, its resources that are involved in
the realized processes, the actual processes and their products, and the environment in
which the organization functions.
Proactive transformation process
Fundamental transformation of the organization internally, which is caused by a change in
the comprehension of its mission and goals.

PEST Analysis
Help analyze external environment (Macro enviromental factors)
External enviroment:
- Competitiors
- Suppliers
- Distributors
- Customers
- Strategic Partners

Pest or Pestal stands for

P - Political (Government policy; Political (in)stability; Corruption; Tax policies)
E - Economic (Economic growth; Exchange rates; Inflation; Unemployment; Purchasing
Power)
S - Social (Population growth; Age distribution; Income levels; Cultural Bariers; Willingness
to work)
T - Technological (
E - Enviromental (Carbon footprint, Climate, Well being of plant)
L - Legal (Discrimination laws; Copyright laws; “what is legal?”)

Porter Five Forces

Analyzes the competitive forces within an industry or market.
The model identifies five key factors that shape the level of competition and attractiveness of
an industry.

- Threat of New Entrants

- How easy or difficult it is for new companies to enter the industry
- Bargaining Power of Buyers
- the power that customers (buyers) have in the industry
- availability of alternative products
- Bargaining Power of Suppliers
- the power that suppliers have over the industry
- number of suppliers, uniqueness of their products, availability of substitutes
- Threat of Substitute Products or Services
- Availability of alternative products or services that could meet the same needs
as those offered by companies in the industry
- The higher the availability of substitutes, the lower the industry's
attractiveness
- Intensity of Competitive Rivalry
- Level of competition among existing firms in the industry
 - High competitive rivalry often leads to price wars, reduced profit margins, and
a challenging business environment.

(When studying worth to check out some examples of each force, “in presentation 3, page
15”)

Swot Analysis
Most Popular strategic analyses
● Internal characteristics of the company
- Strengths
- Weaknesses
● External characteristics of the environment
- Opportunity
- Threats
● Conclusion: Formulating a strategy based on
- How strengths can take advantage of the opportunitys
- Minimize threats
- Strengthening weaknesses
- Turning threats into opportunities

External and Internal balance

External balance:
A company's ability to navigate and respond to factors, regulations, and influences outside
the organization.

Managing relationships with customers, competitors, regulatory bodies, and economic trends

Adapting to market dynamics, staying competitive, and aligning strategies with external
opportunities and challenges

Internal balance:
The company’s management of its internal factors, including organizational culture,
structure, leadership, and resources, employee engagement, and overall organizational
effectiveness.
Functional Balance:
Situation in which all four individual balances are at such a level that an organization is
“manageable” and can realize its mission and its goals to an extent that considered
satisfactory.

There are two dimensions of External and internal balance:

- Material
- Social
E.g:

5. External Material Balance

Involves managing tangible assets like resources, technology, and infrastructure to navigate
and respond effectively to external factors and market demands.

“Material benefits (usually monetary) that the organization receives from its environment
cover all the costs of the organization's functioning”

6. External Social Balance

Managing an organization's reputation, interactions, and impact on society to respond to
external social factors, like stakeholder relationships, cultural dynamics, and public
perception.

“the level of social acceptance of an organization”

7. Internal Material Balance

Managing tangible resources, infrastructure, and technology within the organization to
optimize operational processes and support its overall objectives.

“wages and related benefits (bonuses, awards, stock

options, social benefits, privileges, etc.)
work input, commitment, innovativeness, and loyalty, which can all, more or less accurately,
be evaluated in terms of money.”

8. Internal Social Balance

Managing relationships, communication, and cultural dynamics within the organization to
foster a positive workplace environment, teamwork, and employee well-being.

“mutual acceptance, understanding or even emotional involvement between an organization

(in practice – its management) and the organizational participants (members). “
Presentation 4: Strategy

Strategy
Method of getting from point of departure, which is described in the SWOT analysis; to the
final destination, which is the goals

A strategy answers the following questions:

- What is the area af activity of the org?
- In what directions do the changes in external / internal enviroment push the org?
- What is the potential of the org?
- What determines the achievement of this superior result (sources of competitive
advantage)

The Strategy Model

1. Defining the organizational mission
2. Defining the sphere of activity of the organization
a. Where and in what market is the organization planning to operate?
b. Who will be the target customer of the organization?
c. What technology will be used for creating the product and how will it be
distributed to the customer?
3. Defining the strategic (competitive) advantage
4. Building a strategy consists in defining the strategic goals, i.e. it is precisely
described what the company wants to achieve during the period for which the
strategy is developed. The goals have to be specific, measurable and crucial for the
entire organization
5. Consists in practical operating programs. These are suggestions of particular
programs that will support the realization of the previously defined strategic goals.

Change
Can be:
- Predictable: Seasonal changes
- Unpredictable: Covid
- Continuous: Slowly and constant, like society aging
(Easier to predict)
- Discontinuous: Bankruptcies

Change concerns both the external and internal environment of organizations.

Competitive advantage (Michael Porter)

Porters Generic Strategies:

Cost Leadership:

From class:
Beeing the cost leader; Aims to offer products or services at competitive prices to attract a
broad market.

Cost Focus:

From class: Special type of sugar/salt

Concentrates on a narrow market or customer segment.
Strives to be the low-cost provider within the targeted niche.
Typically involves understanding the specific needs of the focused market and delivering
cost-effective solutions.

Differentiation Leadership:

Develop unique and differentiated products or services for a broad market.

Focuses on creating distinctive features or attributes in products/services.

Differentiation Focus:

Offer unique and differentiated products or services within a specific market segment or
niche.
Targets a narrow market with distinct needs and preferences.

Strategies for competitive advantage:

Differentiation of Quality Strategy:
- The product is considered to be unique; better then other products. Customer is
willing to pay more
Cost Leadership Strategy:
If an organization maintains its costs at a lower level than its competition, then it can freely
decide whether it wants to lower the price or whether it wants to keep a larger profit margin

Focus or Niche Strategy:

Finding a group of customers that are
not interesting to the other market players and “exploiting them”.
Focusing on the needs of a narrow customer segment makes it
possible to adjust better to their needs.

Sources for competitive advantage:

Brand
the product is popular, because it has a well-known brand;

Global configuration
the advantage is based on the fact that the product
is developed / used by individuals or companies in many places in the world

Design
The product is popular, because it is nice-looking;

Association with another product

The product can easily be used in
combination with another product and the popularity of both is mutually
driven up;

Distribution
The product is popular, because it is easily accessible

Marketing
the product is popular, because the organization has mastered its marketing techniques to
perfection

Ability to redefine principles / innovations

The product is successfullyredefined by the producer as something else, e.g.the fountain
pen ceases to compete with the ball pen as a tool to write with and starts competing with
jewelry.
Strategy has to contain

Presentation 5: ORGANIZATIONAL CULTURE

ORGANIZATIONAL CULTURE
A pattern of shared basic assumptions learned by a group as it solved its problems of
external adaptation and internal integration

Iceberg Model
Developed by Edgar Schein, a pioneer in the field of organizational culture, the Iceberg
Model suggests that there are visible and invisible aspects of culture within an organization.
“a significant portion of culture is hidden beneath the surface”

Visible Culture (Above the Waterline):

- Behaviors - How employees communicate, collaborate, and solve problems;
leadership styles; teamwork; work ethic; and other observable actions.

- Artifacts - tangible, visible elements of an organization's culture that include objects,

symbols, and structures. office layout, symbols and logos, office rituals, language and
communication patterns

Invisible Culture (Below the Waterline):

- Underlying Assumptions: This layer comprises the deeper, often implicit aspects of
culture that guide behavior and decision-making.

- Beliefs and Values: Core beliefs, values, and assumptions that shape how members
of the organization perceive and interpret their environment.

- Norms: Unwritten rules and expectations that influence how people interact and
make decisions within the organization.
Critrcs of iceberg analogy:
- Culture is an ecosystem: living and changing.
- Culture is a shadow of the leader.

The Lilly Pond

THE CULTURAL PYRAMID

Artifacts:
Artifacts include all the manufactured articles of a given culture and these constitute the
element that stands out the most. Everything that we see as soon as we enter a given
organization is an artifact.

Types of artifacts: – physical artifacts; – behavioral artifacts; – language artifacts.

Norms and Values:

given community believes to be right and normal and also that, which it believes to be
valuable. It is hard to identify the norms and values of a given community at first glance.

Cultural Assumptions:
Fundaments that the entire organizational culture is based on. This is the most difficult and
most durable element of the organizational culture.

Refers to the human nature, interpersonal relations, the nature of the organization, its
environment and the relations of the organization with its environment

FUNCTIONS OF ORGANIZATIONAL CULTURE

Enables rapid and efficient communication.

Standardizes behaviors, increases predictability and replaces control.

Unifies interpretation and evaluation of reality.

Creates common aspirations, goals, hopes and fears.

ACCULTURATION / SOCIALIZATION
The culture is subject to the process of being entrenched in the psyche of the organizational
members. This process is often called acculturation or socialization. It involves instilling
culture in an individual through a group.

This is done by means of a reward and punishment system that is applied within a group
Rewards - voluntarily providing collaboration and support in the activities performed by the
individual, recognition, prestige, popularity, and all kinds of spontaneous honorable
distinctions.
Punishments - lack of rewards, but also more active actions undertaken against the “unruly”
individual, such as sabotaging the activities performed by the individual, negative feedback,
derogatory rumors, low prestige, and a general lack of support from the group, and in
extreme cases isolation and ostracism, i.e. banishment from the group.

FACTORS INFLUENCING CULTURE

COMPETITIVE ENVIRONMENT
The changing competitive environment, especially the actions of the competitors, often inflict
cultural changes.

- Japanese car manufacturers imposed radical cultural changes on other

manufacturers, being the result of making the quality and customer satisfaction the
top-priority values.
In the Polish market of educational services the non-state universities forced the state
universities to search for ways to increase the level of student satisfaction and to treat them
like “customers”.

TECHNOLOGICAL CHANGE
Technological change also often bring the cultural changes.

Examples:
- The Internet changed the behavioral norms and patterns in industries such as aerial
transport, tourism, accommodation or some spheres of the trade industry.
- The mobile phone industry drastically changed the relations of customers with
fixed-line operators, forcing them to a greater flexibility and adjusting their offer to the
diversified needs of the customers. Thus, customer satisfaction became a value.
LEGAL ENVIRONMENT
Legal factors - cause resistance and are under the pain of legal sanctions, in the long term
they also lead to cultural changes, and in particular to the development of new norms and
patterns.

The effects of the legislation concerning discrimination of minorities, employees' rights,

protection of personal data or the protection of the natural environment.

PARTNERS
The source of enforcements that change the organizational culture can also be partners and
the socalled peer groups, which operate in the same business and jointly apply certain
standards.
Examples:
- Accreditation systems in business schools enforce cultural changes that entail
involving business and international partners in the decision-making processes.
- In the industrial sector the collaboration with partners that apply quality management
systems (such as the ISO-system) enforces the implementation of the same systems
including their spontaneously applied (i.e. culturally sanctioned) norms and patterns

INTERNATIONALIZATION
An important source of cultural changes in organizations is internationalization.
Organizations demonstrate a natural tendency to imitate those that are the most successful.
Examples:
- Japanese quality management concepts - “quality circles” or “Just-In-Time” and
American “sales”, “promotions”, “discount stores”, etc. are becoming more and more
common.
- Each of these concepts must be rooted not only in regulations and formal institutions,
but also in the culture.

SOCIAL STRUCTURE
The organizational culture transforms under the influence of changes of the broader social
structure in which an organization functions.
Examples:
- Aging or increase of the share of young people, an increase in the level of education
of the populations as well as changes in the level of wealth.
- Countries that are known for their high level of work ethos, such as Japan or
Germany face the situation, where traditional patterns are being broken as a result of
the labor force getting increasingly younger, the rise in the level of wealth and the
spreading of consumerism.