CHAPTER ONE
REVIEW QUESTIONS
1. What are some of the personal skills and abilities that Meg Whitman and Ken Chenault bring to their jobs as managers?
Chenault and Whitman have a broad perspective, the ability to see the need for change and implement it, good people skills, decisiveness, and the ability to persuade others. Both enjoy a challenge, take risks to follow their instincts, and have experience in management.
Answer, pp 4-5
2. What are the three critical challenges managers face today?
The three critical challenges managers face today are change, technology, and globalism. All managers are faced with the need or opportunity to change, as it is the most persistent, powerful, and pervasive challenge they face. Technology developments are occurring constantly and are often forcing changes throughout the business world. Globalism, the increasing international and cross-cultural nature of everything from politics to business, affects the way managers set goals, make decisions, and coordinate and lead the work of other people.
Answer, p 7
3. How would you define management?
Management is the process of assembling and using sets of resources in a goal-directed manner to accomplish tasks in an organizational setting.
Answer, p 8
4. Why is it important to understand management within the context of
organizations?
Managerial activities, such as decision making or communication, can happen in non-organizational settings such as a family. You can even engage in managerial activities such as planning and goal setting independently, without others being involved. However, these activities in isolation do not constitute management. Management requires integration of all these activities and the involvement of other people. This integration only occurs in an organizational context. It is similar to a dialogue taking place only when another person participates in the conversation—otherwise, it’s a monologue.
Answer, p 10
5. What are some of the factors that make individual organizations unique?
Organizations often bring together a variety of people from different backgrounds—from different ethnicities and cultures (Asian, African American, Arabic, Anglo, Irish, Vietnamese, and so on), different educational levels (high school dropouts, college graduates, and MBAs), different technical backgrounds (engineering, digital arts, and accounting), and different socioeconomic levels (from very poor to very privileged)—who must then work together to achieve common objectives. Thus, developing a degree of shared cooperation becomes essential. This can only be accomplished by gaining acceptance of existing ways of working together, using existing structures and processes, or by developing new structures and processes. These behaviors, structures, and processes over time constitute the personality, or culture, of the organization. Whatever one may think or assume about the personality or culture of, say, a typical unit of General Motors, it is likely to be different from that of Patagonia, the apparel manufacturer headquartered in Ventura, California, where an office message board posts the local surfing conditions. The basic principles of effective management are relevant in all organizations, but the specific characteristics of an organization affect how those principles are applied.
Answer, p 11-12
6. Explain the paradoxes, or trade-offs, that managers have to master to be
effective.
One of the important factors that separate great managers from mediocre managers is the recognition, acceptance, and mastery of managing paradoxes—the ability to cope with forces that pull managers in opposite directions. Great managers do not avoid these tensions but embrace them, harness them, and utilize them. Managers at times have to make decisions about trade-offs. Sometimes they do, in fact, have to go with one set of actions to achieve the desired results—for example, expand the investment in the R&D (research and development) area of the company—and in the process, forgo another investment and its potential results. That might mean postponing TV advertising during the Super Bowl for two years. However, great managers do not automatically view competing forces in terms of direct trade-offs; they often recognize that the challenge is to respond to both forces simultaneously in a creative fashion that enables the firm to accomplish both sets of objectives or some portion of them.
Answer, p 17
7. Explain why an “entrepreneurial mindset” is important to all managers.
To survive in the hypercompetitive landscape that exists in the twenty-first century managers are required to regularly search for and be open to new opportunities in their current marketplace or to ideas that could create new markets. Entrepreneurship involves identifying new opportunities and exploiting them. Thus, managers must be entrepreneurial. Entrepreneurship is not exclusive to management, especially in the current environment. Entrepreneurial activity is not limited to new, small firms. Managers in large firms need to be entrepreneurial and create new businesses as well. Developing new businesses requires that the lead person and perhaps others take entrepreneurial actions.
With an entrepreneurial mind-set, managers can sense opportunities and take actions to exploit them. Uncertainty in the environment tends to level the “playing field” for both large and smaller organizations and for resource-rich and resource-poor ones. Opportunities can be identified by anyone and exploited to achieve a competitive advantage.
Answer, p 22
8. What are the functions of management that all managers perform?
The functions that all managers perform are: planning, which is estimating future conditions and circumstances and making decisions about appropriate courses of action; organizing, which means systematically putting resources together; directing, which is the process of attempting to influence other people to attain organizational objectives; and controlling, which regulates the work of those for whom a manager is responsible.
Answer, pp 25-26
9. What are the management roles Mintzberg identified?
Mintzberg organized his typology of managerial roles into three major categories—interpersonal, informational, and decisional—each of which contains specific roles. Altogether, there are 10 such roles in this system.
Interpersonal roles are composed of three types of behavior and, according to Mintzberg, are derived directly from the manager’s formal authority granted by the organization. They are the Figurehead Role, Leader Role, and the Liaison Role. Informational Roles build on the interpersonal relationships that a manager establishes, and it underlines the importance of the network of contacts built up and maintained by the manager. The three specific informational roles identified by Mintzberg are the Monitor Role, the Disseminator Role, and the Spokesperson Role. Decisional Roles are the final category of roles in this classification system relates to the decision-making requirements of a manager’s job. Four such decisional roles are designated by Mintzberg: the Entrepreneurial Role, the Disturbance Handler Role, the Resource Allocator Role and the Negotiator Role.
Answer, pp 26-29
10. What are the skills needed by managers at all levels of the organization?
Technical skills involve specialized knowledge about procedures, processes, equipment, and the like and include the related abilities of knowing how and when to use that knowledge. Interpersonal skills like sensitivity, persuasiveness, and empathy have been shown to be important at all levels of management, although particularly so at lower and middle levels. Conceptual Skills, often called cognitive ability or cognitive complexity, are skills such as logical reasoning, judgment, and analytical abilities that are a relatively strong predictor of managerial effectiveness. These skills are often the major factor that determines who reaches the highest levels of the organization.
Answer, pp 32-34
CHAPTER 2
REVIEW QUESTIONS
1.What were the environmental shifts that prompted change at LSP?
The environmental shifts that forced change were from analog to digital technology in diagnostic instruments, from M.D.s and Ph.D.s to technicians as end users, and the shift from individual tests to integrated analysis.
Answer, pp 39-40
2. Why does managerial change often mean personal change?
Failure to adapt personally, to help other individuals change, or to effectively lead change in a team can have devastating effects on the individuals involved as well as the organization. Managers may have to change how they motivate their subordinates, gather new and increased amounts of information, make decisions, and how they negotiate conflicts to support new strategies.
Answer, p. 41
3.What is meant by the rate of change?
The rate of change is the pace at which change occurs in the environment. In a survey of executives described in the text, 87% of those responding believe the rate of change is increasing.
Answer, p. 43
4.Explain the external forces for change.
External forces for change are those in the company’s environment. These forces include competitors, socio-cultural changes, political/legal changes, economic changes, and changes in technology.
Answer, pp 44-45
5.What are the internal forces for change?
The internal forces for change can be caused by changes in leadership style, new processes or policies, new equipment, or responses to change in the external environment.
Answer, p. 45
6. List and explain the steps in the change process proposed by Kurt Lewin.
Lewin’s change process has three steps. Unfreezing is the undoing of old patterns. Once old habits are unfrozen, then you are in a position to move and make the needed changes. Movement is the changing of perceptions based on the level of certainty or uncertainty associated with the change. Refreezing is the process of reinforcing change so that it becomes established.
Answer, p. 47-50
7.Why do people fail to see the need for change?
People fail to see the need for change because they are locked into powerful past mental maps that have been successful in the past and filter new information to fit old views. Sometimes, people have an overly simplistic view of the past and the future, failing to see the significance of the changes from the past context to a new one. Lastly, people have an almost automatic resistance to unfreezing attempts because they want to maintain equilibrium.
Answer, pp 51-53
8. How does uncertainty affect the failure to move?
The greater the desired change, the greater the uncertainty. There are three dimensions of uncertainty: uncertainty centered in the change itself, outcome uncertainty, and requirement uncertainty.
Answer, pp 53-55
9. Why are some changes unfinished?
Some changes are unfinished due to lack of reinforcement, because the desired results are slow in coming, and because it is hard to recognize slow changes when you are in the middle of the process.
Answer, pp 55-56
10. What can be done to overcome the obstacles to change?
Obstacles to change can be overcome by creating high contrast to focus people on key differences. Another is by confronting them with the need to change through providing an inescapable experience.
Answer, p. 60
CHAPTER 3
REVIEW QUESTIONS
1. Which dimension of the external environment has had a very strong impact on the oil business in Russia?
The dimension of the external environment that has had a very strong impact on the oil business in Russia is the political environment. Political instability in Kazakhstan, Russia, and Georgia made it difficult to negotiate agreements about drilling and transportation. In addition, economic turbulence and social opposition have also had a “chilling effect” on the extraction and development of oil for export.
Answer, p. 75
2. What are the forces in the general environment that affect business?
The forces in the general environment that affect business are global, socio-cultural, political-legal, economic, and technology.
Answer, p. 78
3. Why is it important to understand current economic conditions, economic cycles, and structural changes?
The exact nature of the business and industry determine the specific factors that have the strongest effect on any organization. Current economic conditions are those such as the unemployment rate that determines the cost of labor, interest rates that determine the cost of money and ability of people to borrow to purchase costly items such as homes or automobiles. Economic cycles involve the expansion and contraction of the economy or of a specific industry. Knowing what is happening now and what may come in the future, or whether an industry regularly has peaks and valleys in demand is important for planning purposes. Structural changes are those that significantly affect the dynamics of economic activity now and in the future. Such structural changes as the shift from an agrarian to an industrial economy, then to a service economy requires adaptation by individuals and companies.
Answer, p. 82
4. What does the gross domestic product measure?
Gross domestic product measures the total dollar value of final goods and services produced within a nation’s borders.
Answer, p. 85
5. List and explain each of the forces in the task environment that affect business.
Forces in the task environment are competitors, suppliers, regulators, customers, labor, and strategic partners. Competitors are companies in the same industry who are rivals for your business. The nature of competition, barriers to new entrants, and switching costs are also important to understanding competition. Suppliers provide the inputs for a business and affect the supply chain. If there are few suppliers who already have customers, it may be difficult to enter the market or obtain the materials you need. Regulators include both regulatory agencies and consumer groups. The greater the power of customers, because there are few or because they are united, the greater value they can extract from producers, decreasing profits. Labor affects costs depending on supply and demand, as in other markets. Labor unions, although decreasing in numbers in the U.S., can exert pressure in many industries to increase wages and benefits that are costly. Strategic partners are those who work together in an industry to develop cost savings or convenience for companies and customers.
Answer, p. 92
6. Explain Michael Porter’s model for analyzing the task environment and how it is used.
Michael Porter’s model for analyzing the task environment does so in terms of five forces that significantly affect the performance and profitability of businesses in the same industry. It is used to decide whether entering a new industry offers a good opportunity to be profitable. It is primarily based on analysis of the competition and the difficulty of entering the market relative to intensity of rivalry, strength of suppliers, strength of customers, and availability of substitutes.
Answer, p. 92
7. What are the key factors and forces in an organization’s internal environment?
The key forces and factors in an organization’s internal environment are its owners, Board of Directors, employees, and culture.
Answer, p. 99
8. How does the Board of Directors affect the internal environment of an organization?
The Board of Directors represents the owners of an organization and has the general responsibility of overseeing the general management of the company. It may include individuals from inside and outside the company.