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Strategies for Applying e-Business Techniques
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Create knowledge bases that employees can tap into anytime
Turned customers into collaborative partners who help design, test and launch new products
Become virtually paperless in specific tasks such as purchasing and filing expense reports
Managed logistics in real time
Changed the nature of numerous work tasks throughout the organization
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How can you overcome people's anxieties around change?
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Help people see the upside and honesty (see, hear, feel)
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Group Decision Making
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Uses committees, task faces, review panels, study team, or similar groups to make decisions
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Innovation Strategies
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Ways to improve and enhance
First mover (Pioneer): an organization that first's to bring a product innovation to the market or to use a new process innovation.
Followers: mimic the first movers
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Why is Strategic Management important?
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Can make a difference in how well an organization performs
Continually changing situations
Nature of organizations: composed of diverse divisions, units, functions and work activities
Involved in many decisions that managers make
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Legitimate Power
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The power a leader has as a result of his or her position in the organization
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Human Relations View of Conflict
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The view that conflict is natural and inevitable outcome in any group
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Competitive Advantage
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What sets an organization apart; its distinct edge
The organization does somethign that others cannot or does it better
Quality as a Competitive Advantage: focuses on customers and continuous improvement. Can satisfy customers' need for quality
Sustaining Competitive Advantage: keep its edge despite competitior's actions or evolutionary changes in the industry
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Some Predictions from Path-Goal Theory
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Directive leadership leads to greater satifaction tasks are ambiguous or stressful than when they are highly structured and well laid out.
Supportive leadership results in high employee performance and satifaction when subordinates are performing structured tasks.
Directive leadership is likely to be perceived as redundant among subordinates with high-perceived ability or with considerable experience.
Subordinates with an internal locus of control will be more satisfied with a participative style.
Subordinates with an external locus of control will be more satisfied with a directive style
Achievement-oriented leadership will increase subordinates' expectancies that effort will lead to high performance when tasks are ambiguously structured
Employee performance and satisfaction are likely to be positively influenced when the leader compensates for shortcomings in either the employee or the work setting.
However, if the leader spends time explaining tasks that are already clear or when the employee has the ability and experience to handle them without interference, the employee is likely to see such directive behavior as redundant or even insulting.
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Disadvantages for Group Decisions
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Time consuming
Minority domination
Pressures to conform
Ambiguous responsibility
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Work Teams
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Groups whose members work intensely on a specific, common goal using their positive synergy, individual and mutual accountability, and complementary skills
Problem-Solving: a team of 5-12 employees from the same department or functional area who are involved in efforts to solve specific problems
Self-Managed Work Teams: A type of work team that operates without a manager and is responsible for a complete work process or segment
Cross-Functional Teams: a type of work that's a hybrid grouping of individuals who are experts in various specialties and who work together on various tasks
Virtual Team: A type of work team that uses computer technology to link physically dispersed members in order to achieve a common goal
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Transformational Goals
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Leaders who provide individualized consideration and intellectual stimulation, and who possess charisma.
Inspires followers to transcend their own self-interest for the good of the organization
Transformational leadership is built over transactional
Transformational leaders are more effective, higher performers, and more promotable than their transactional coutnerparts
Transformational leaders correlated with lower turnover rate, higher productivity and higher employee satisfaction
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The Ohio State Studies
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Initiating structure: The extent to which a leader was likely to define and structure his or her role and the roles of the group members in the search for attainment
Consideration: the extent to which a leader had job relationships characterized by mutual trust and respect for group members' ideas and feelings
High-high leader: a leader high in both initiating structure and consideration behaviors
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Behavioral Theories
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Leadership theories that identify behaviors that differentiated effective leaders from ineffective leaders
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Formal Groups
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Are groups defined by the organization's structure that have designated work assignments and specific tasks
Command Groups: determined by the organization chart, individuals who report directly to a given manager
Task Groups: individuals brought together to complete a specific task
Cross-Functional Teams: group brings together the knowledge and skills of individuals from various work areas
Self-Managed Teams: groups that are independent
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Why culture is important?
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Can be powerful integrating force helping to implement a business strategy
Can greatly help or hinder the capacity to adapt and the development and implementation of new strategies
Tendency to perpetuate over time
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Final component in the model is
4 stages of follower readiness
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R1: People are both unable and unwilling to take responsibility for doing something. They are neither competent nor confident
R2: People are unable but willing to do the necessary job tasks. They are motivated but currently lack the appropriate skills.
R3: People are able but unwilling to do what the leader wants.
R4: People are able and willing to do what is asked of them.
SLT essetnailly view the leader-follower relationship as analogous to that of a parent and a child
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SLT if followers are _____ and _____ , the leader needs to ______.
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SLT says if followers are unable and unwilling to do a task, the leader needs to give clear and specific directions
SLT says if followers are unable and willing, the leader needs to display high task orientation to compensate for the follower's lack of ability and high relationship orientation to get followers to "buy into" the leader's desires
SLT says if followers are able and unwilling, the leader needs to use a supportive and participative style
SLT says if employees are both able and willing, the leader doesn't need to do much.
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Path-Goal Theory
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A leadership theory that says it's the leader's job to assist his or her followers in attaining their goals and to provide the direction or support needed to ensure that their goals are compatible with the overall objectives of the group or organization
Assumes that the same leader can display any or all these leadership styles
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Traditional View of Conflict
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The view that all conflict is bad and must be avoided
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8 Step Formula (Change)
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Sense of urgency (increase): remove people from complacency
Build the guiding team
Get the vision right
Communicate for buy-in
Empower action
Create short-term wins
Don't let up
Make change stick
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Adaptive Cultures
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Constituency Focused
Management cares deeply about customers, stockholders and employees
Open, candid discussion and decision making
Non-political atmosphere
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Expert Power
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Influence, special skills, or knowledge
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Informal Groups
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Are social, occur natural in the workplace in response to the need for social contact. Form around friendships and common interest
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Adjourning
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The final stage of group development for temporary groups during which members are concerned with wrapping up activities rather than task performance
The group prepares to disband
High levels of task performance are no longer the group's top priority; attention directed at wrapping up activities
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Empowerment
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Increasing the decision-making discretion of workers
Important because of the need for quick decisions and implement changes quickly
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Vertical Integration (backward vertical integration)
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gain control of inputs by becoming its own supplier
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Process Conflict
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Conflict over how work gets done
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Charistmatic Leader
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An enthusiastic, self-confident leader whose personality and actions influence people to behave in certain ways
5 Characteristics that differentiate charismatic leader from non-charismatic ones
They have a vision
Articulate that vision
Willing to take risks to achieve that vision
Are sensitive to both environmental constraints and follower needs
Exhibit behaviors that are out of the ordinary
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Stuck in the middle
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A situation where an organization hasn't been able to develop either a low cost or a differentiation competitive advantage.
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What are some of the common mistakes organization makes?
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People don't recognize complacency
People aren't too scared or mad
Not strong enough team to delegate projects
Credibility
Understanding
Empower
Short-term wins
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Men's Typical Leadership Style
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More likely to use directive, command-and-control style
Rely on formal position authority for their influence
Use transactional leadership, handing out rewards for good work and punishment for bad
The tendency for women to be more democratic than males declines when women are in male-dominated jobs.
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Differentiation Strategy
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A business-level in which a company offers unique products that are widely valued by customers
ie: high quality, extraordinary service and innovated design
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Task conflict
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Conflicts over content and goals of the work
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Step 4 of the Strategic Management Process
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Formulating Strategies
Once SWOT is complete, managers need to develop and evaluate strategic alternatives and then select strategies that capitalize on the organization's strengths and exploit opportunities on or correct the organization's weaknesses
This step is complete when managers have developed a set of strategies that give the organization a relative advantage over its rivals
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Norming
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The third stage of group development, which is characterized by close relationships and cohesiveneness
Strong sense of group identity and camaraderie
Completed when the group structure solidifies and the group has assimilated a common set of expectations of what defines corerction member behavior
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Middle Managers business strategies
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Strategic business Units (SBUs): single business of an organization in several different businesses that are independent and formulate their own strategies
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Group Member Resources in Cross-cultural Groups
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Managers need to clearly understand the cultural characteristics of the groups and and the group members they manage (Global Organizations)
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Why is it important to understand Change?
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Not much experience for dealing with change well
Seeing it work
Knowing the formula
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Trait Theories
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Physical stature, appearance, social class, emotional stability, fluency of speech and sociability
Proved to be impossible to identify a set of traits that would always differentiate
Traits alone are not sufficient for explaining effective leadership
Ignores the interactions of leaders and their group members as well as situational factors
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Advantages for Group Decisions
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Generate more complete information and knowledge
Generate more diverse alternatives
Increase acceptance of a solution
Increase legitimacy
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Creating Effective Teams
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Clear Goals: know what's expected and understand how they will work together to achieve the goals
Relevant Skills: technical and interpersonal skills
Mutal Trust
Unified Commitment: dedication to the teams goal's and a willingness to expend extraordinary amounts of energy to achieve them
Good Communication: verbally and nonverbally
Negotiating Skills: flexibility, confront and reconcile differences
Appropriate Leadership: clarifying goals, demonstrating that change is possible by overcoming inertia, increasing the self confidence of team members and help members to more fully realize their potential
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How can we get started with our own change process?
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Creative Ways
Urgency
Change processes
Creating an experience that creates attention
Be diligent
Speaker
Do away with complacency
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University of Iowa Studies
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Autocratic Style: A leader who tended to centralize authority, dictate work methods, make unilateral decisions, and limit employee participlation
Democratic Style: A leader who tended to involve employees in decision making, delegate authority, encourage participlation in deciding work methods and goals, and use feedback as an opportunity for coaching employees
Laissez-faire Style: A leader who generally gave the group complete freedom to make
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Step 1 of Strategic Management Process
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Identifying the organization's current mission, objectives and strategies
Mission: a statement of purpose
What is our reason for being in business?
Defining organization's mission forces managers to identify the scope of its products
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Cost Leadership Strategy
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a business-level strategy in which the organization is the lower-cost producer in its industry
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Visionary Leadership
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The ability to create and articulate a realistic, credible and attractive vision of the future that improves upon the present situation
Skills Visionary Leaders Exhibit
Ability to explain the vision to others by making the vision clear in terms of required goals and actions through clear oral and written communication.
Ability to express the vision not just verbally but through behavior, which requires behaving in ways that continually convey and reinforce theh vision.
Ability to extend or apply the vision to different leadership contexts. i.e. vision has to be meaningful to the people in accounting as it is to those in production
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Stability Strategy
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A corporate-level strategy characterized by an absence of significant change
Continuing to serve the same clients by offereing the same product or service, maintaining market share, and sustaining the organization's return-on-invesetment
Facing slow or no-growth opportunities
Allows time to analyze their strategic moves
May feel successful enough, meet their personal goals and don't want the hassle of a growing business
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University of Michigan Studies
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Managerial Grid: a 2-D grid of two leadership behaviors: concerns for people and concern for production which resulted in 5 different leadership styles
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Strategic Management Process
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A six step process that encompasses strategic planning, implementation, and evaluation.
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Relationship between Cohesiveness and Productivity
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Dysfunctional Conflicts
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Conflicts that prevent a group from achieving its goal
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Work teams vs. Group teams
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Group
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two or more interacting and interdependent individuals who come together to achieve particular goals
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Growth Strategy
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a Corporate-level strategy that seeks to increase the organization's operations by expanding the number of products offered or markets served
Wants to increase sales revenues, # of employees, and market share
Achieved when organization concentrates on its primary line of business and increase the # of products offered or market served in this primary usiness
Company chooses to grow by increasing its own business operation
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Conflict
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Perceived incompatible difference that results in interference or opposition
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The Arrogance Test
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Do managers look outside the firm for new ideas?
Do they behave humbly with customers and employees?
Do they know their real strengths and weaknesses?
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Strategic Management
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The set of managerial decisions and actions that determine the long-run performance of an organization
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Functional-level Strategy
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Organization that have traditional functional departments such as manufacturing, marketing, human resources, research and development, and finance, these strategies need to support the business-level strategy
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Step 3 of Strategic Management Process
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Financial capital, technical expertise, skilled employees, experienced managers
Strengths: any activities the organization does well or any unique resources that it has
Weakness: activities the organization does NOT DO well or resources it needs but does not posses
Core Competencies: The organization's major value-creating skills, capabilities, and resources that determine its competitive weapons
Organization's culture is crucial: managers should be aware that strong and weak cultures have different effects on strategy
Culture can promote or hinder an organization's strategic action
SWOT analysis: an analysis of the organization's strengths, weaknesses, opportunities and threats
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Step 2 of Strategic Management
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External Analysis
What competition is doing, what pending legislation might affect the organization
Managers should examine both the specific and general environments
Opportunities: Positive Trends in External Environmental factors
Threats: Negative trends in External Environmental Factors
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Hersey and Blanchard's considers each (task and relationship behaviors) as either high or low and then combining them into
4 specific leadership styles
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Telling (high-task, low relationship): leader defines roles and tells people what, how, when and where to do various tasks
Selling (high-task, high relationship): leader provides both directive and supportive behavior
Participating (low-task, high relationship): leader and follower share in decision-making; main role of the leader is facilitating and communicating
Delegating (low-task, low relationship): the leader provides little direction or support
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Group Structure
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Shapes members behavior and makes it possible to explain, predict, and influence
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Why is it important for people to understand the process of change?
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See that it is easy!
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Functional Conflicts
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Conflicts that support a group's goals and improve its performance
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Group Tasks
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Tasks can be generallized as either simple or complex
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Related Diversification
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When a company grows by mearging with or acquiring firms in different, but related industries
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High Performance (Adaptive) Cultures
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Constituency focused, leadership encouraged
Do well in short-term, long-term: help to adapt
Managers adapt to changing environment, new strategies and tactics initiated
Superior long-term economic performance
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Reward Power
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The power a leader has to give positive benefits or rewards. I.E. Money, favorable performance appraisals, promotions, etc..
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How can we get started with our own change?
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Creative ways: creating an experience that catches attention
Show to employees: Customers, Suppliers and Financial
Pick more than one thing that is practical
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Full-line Generalists
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Dominate and hold most of the industry market share. (Exceptions; the soft-drink industry)
2 Companies tend to lead to monopolistic pricings or mutual destruction
4 companies encourage continual price wars, which can be detrimental
Marketshare is 70-90%
Out of control growth can send specialists into the ditch
Ditch companies have the worst financial performance and have little chance of surviving
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Step 5 of the Strategic Management Process
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Implementing Strategies
After strategies are formulated, they must be implemented
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Change
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Can be overwhelming
Alternative ways to deal; make challenging and fun
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Process of Culture Change
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Creating sense of vision
Activity that gets people attention
Belief it is necessary
Sense of crisis
Creating shared opportunity
Gathering facts
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Trust
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Belief in the integrity, character, and ability of a leader
5 Dimensions that make up Trust
Integrity: most critical
Competence
Consistency
Loyalty
Openness
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Group Size
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Small groups are faster at completing task than larger groups
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Fiedler Model
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Leadership theory that proposes that effective group performance depends upon the proper match between a leader's style of interacting with his or her followers and the degree to which the situation allows the leader to control and influence
Key factor in leadership success was an individual's basic leadership style, either task oriented or relationship oriented
Least-preferred co-worker (LPC) questionnaire: a questionnaire that measured whether a leader was task or relationship oriented
Leader-member relations: one if Fiedler's situation contingencies that described the degree of confidence, trust, and respect employees had for their leader
Task Structure: One of Fiedler's situational contingencies that described the degree to which job assignments were formalized and procedurized
Position Power: One of Fiedler's situational contingencies that described the degree of influence a leader had over power based activities such as hiring, firing, discipline, promotions and salary increases
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Group Member Resources
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Members' knowledge, abilities, and skills
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Status
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A prestige grading, position, or rank within a group
Significant motivator
Behavioral consequences when individuals see a disparity between what they perceive their status to be and what others perceive it to be
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Credibility
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The degree to which followers perceive someone as honest, competent, and able to inspire.
Honesty is the main component of credibility.
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Manager: Well spot trends
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External focus
Devising new strategies
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Common Responsibilities of all Leaders
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Coaching
Facilitating
Handling disciplinary problems
Reviewing team and individual performance
Training and communication
Two Priorities: Managing the team's external boundary, facilitating the team process
4 Specific Leadership Roles: Liaisons with external constituencies, troubleshooter, conflict managers, coaches
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Ditch Dwellers
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Not one of the highly efficient generalist or highly focused niche, they are weak
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What can we learn about Warren Buffett and Berkshire Hathaway?
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More people understand the better
Easier for Senior Management to make things happen
Pamphlets from executives, to bottom of organization
Smart, fast and effective way
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Forward Integration
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Gaining control of outsputs by becoming its own distributor
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Hersey and Blanchard's Situational Leadership Theory
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Situational leadership theory (SLT): a leadership contingency theory that focuses on followers' readiness
The emphasis on the followers in leadership effectiveness reflects the reality that it is the follower who accept or reject the leader
SLT uses the same two leadership dimensions that Fiedler identified: task and relationship behaviors
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Group Cohesiveness
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The degree to which group members are attracted to one another and share the group's goals
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Lower level managers (Functional level strategies)
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The Rule of Three: competitive forces in an industry, if kept relatively free of government interference or other special circumstances, will inevitably create a situation where 3 companies dominate any given market
3 large dominate players: "full-line generalists", "Super niche players", and "ditch dwellers"
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The Bureaucracy Test
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How centralized is decision making
How large are staff groups
How much do managers delegate
How risk averse is management
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Internal Structure of Group
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Defines member's roles, norms, conformity, status systems, group size, group cohesiveness, and formal leadership positions
Roles: a set of behavior patterns expected of someone occupying a given position in a social unit
Norms: acceptable standards or expectations shared by groups' members. For example: work output levels, absenteeism, promptness and amount of socializing allowed on the job
Conformity: group members feel extensive press to align to their opinions with other's opinions
Status
Group Size
Group Cohesiveness
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Leader
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Someone who can influence others and who has managerial authority
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The Internal Focus Test
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Do managers talk to customers
Do they go out to evaluate competitors
Do they talk to stalkholders
Do executives talk to non-management employees
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Horizontal Integration
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A company grows by combining with other ogranzations in the same industry (combining operations with competitors)
U.S. Federal Trade Commission must approve any proprosed horizontal strategy
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Drawbacks and Benefits of Managing Global Teams
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Step 6 of Strategic Management Process
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Evaluating Results
How effective have the strategies been?
What adjustments are necessary?
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Leadership
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The process of influencing a group toward the achievement of goals
Not all leaders should be managers: the fact that an individual can influence others does not mean that he/she can also plan, organize and control.
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Referent Power
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Power that arises because of a person's desirable resources or personal traits. Developed out of admiration of another and desire to be like that person.
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Group Processes
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The communication patterns used by members to exchange information, group decision processes, power dynamics, conflict interaction and the like.
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Women's Typical Leadership Style
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Tend to adopt a more democratic or participative style
Share power and information, and attempt to enhance followers self-worth
Rely on charisma, expertise, contacts, and interpersonal skills
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Relationship Conflict
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Conflict based on interpersonal relationships
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Corporate Culture and Performance
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Culture: Norms and behavior (how we behave and expect others to behave)
Shared Values
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Retrenchment (Renewal) Strategy
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Short-run renewal strategy
Used in situations when performance problems aren't as serious
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Leader Participation Model
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A leadership contingency model that related leadership behavior and partcipation in decision making
A sequential set of rules (norms) that a leader followed in determining the form and amount of participation in decision making.
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Team Leadership: Challenge for Managers
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Learning how to become an effective team leader
Learn skill such as having patience to share information
Trust others
Give up authority
Know when to intervene
Master the difficult balancing act of knowing when to leave their team alone and when to get involved
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Competitive Strategies (Michael Porter): Resources and Capabilities
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Threat of new entrants: economics of scale, brand loyalty, and capital requirements determines how easy or hard it is for new competitors to enter an industry
Threat of substitutes:factors such as switching costs and buyer loyalty determine the degree to which customers are likely to buy a substitute product
Bargaining power of buyers: factors such as # of customers in the market, customer information, and the availability of substitutes determine the amount of influence that buyers have in an industry
Bargaining power of suppliers: factors such as the degree of supplier concentration and availability of substitute inputs determine the amount of power that suppliers have over firms in the industry
Current rivalry: factors such as industry growth rate, increasing or falling demand, and product differences determine how intense the competitive rivalry will be among firms currently in the industry
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Leadership Focus
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Responsibility given to lower levels
Small central staff
Decisiveness and risk talking encouraged
Issue oriented
Substance over form
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5 Conflict Resolution
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Avoidance
Accommodation
Forcing
Compromise
Collaboration
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Stages of Group Development
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Forming
Storming
Norming
Performing
Adjourning
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General Assumptions of House and his theories
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Assumes that leaders are flexible
Environment: outside the control of the follower; tasks structure, formal authority system and the work group
Part of the personal characteristics of the follower: including locus of control, experience and perceived ability
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Focus Strategy
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A business-level strategy in which company persues a cost or differentiation advantage in narrow industry segment
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Readiness
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The extent to which people have the ability and willingness to accomplish a specific task
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Forming
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The first stage of group development in which people join the group and then define the group's purpose, structure, and leadership
Completed when member begin to think of themselves as part of a group
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Turnaround (renewal) strategy
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A renewal strategy for situations in which the organization's performance problems are more serious
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House identified 4 leadership behaviors
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Directive Leader: Lets subordinates know what's expected of them, schedules work to be done, and gives specific guidance on how to accomplish tasks
Supportive Leader: Friendly and shows concern for the needs of followers
Participative Leader: Consults with group members and uses their suggestions before making a deicion
Achievement-Oriented Leader: sets challenging goals and expects followers to perform at their highest level
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Top Level (Corporate-Level) Management Organizational Strategies
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An organizational strategy that seeks to determine what business a company should be in or wants to be in
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Social Loafing
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The tendency for individuals to expend less effort when working collectively than when working individiually
Some in the group are not carrying their fair share
See others as lazy or inept
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Customer Service Strategies
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Communication
Customer feedback
Training
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Storming
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The second stage of group development which is characterized by intra-group conflict
Conflict over who will control the group
Resist the control that the group imposes
Completed when there is a clear hierarchy of leadership within the group and agreement on the group's direction
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Renewal Strategy
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A corporate-level strategy designed to address organizational weakness that is leading to performance declines
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Final Condition needed for an effective team is ________.
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A supportive climate
Internally: sound infrastructure which means having proper training, clear and reasonable measurement
Externally: managers should provide the team with the resources needed to get the job done
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Super Niche Players
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Specializing through either product or market segmentation
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Cross-Cultural Leadership
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Effective leaders DO NOT use any single style:
They adjust their style
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Corporate Porfolio Analysis (BCG Matrix)
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Developed by Boston Consulting Group
A strategy tool that guides resource allocation decisions on the basis of market share and growth rate of SBUs
Cash cow: low growth, high market share
Stars: high growth, high market share
Question marks: high growth, low market share
Dogs: low growth, low market share
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Coercieve Power
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The power a leader has because of his or her ability to punish or control. Followers react to this power out of fear of negative results.
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What are the obstacles to change?
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Complacency
Anxiety
Anger (feelings)
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Performing
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The forth stage of group development when the group is fully functional and accpeted
Group energy has moved from getting to know and understand each other to performing the task at hand
Performing is the last stage in the development of PERMANENT work groups
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Transactional Leaders
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Leaders who guide or motivate their followers in the direction of established goals by clarifying role and task requirements
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Inter-actions view of conflict
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The view that some conflict is necessary for a group to perform effectively
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