Compare and contrast the three levels of strategy in an organization.
Corporate-level strategy focuses on the organization as a whole. Corporate strategy determines the direction that the organization is going and the roles that each business unit in the organization will plan in pursuing that direction.
Business-level strategy focuses on each business or product line. For a small organization in only one line of business or the large organization that has not diversified into different products or markets, the business strategy typically overlaps with the organization’s corporate strategy. For organizations with multiple businesses, however, each division will have its own strategy that defines the products or services it will offer and the customers it wants to reach.
Functional-level strategy focuses on major functional departments within a business unit. For organizations that have traditional functional departments such as manufacturing, marketing, human resources, research and development, and finance, these strategies need to support the business strategy.
Compare decision conditions of certainty, risk, uncertainty and ambiguity.
Programmed and nonprogrammed decisions differ because of uncertainty
Certainty: the information needed is available
Risk: the future outcome is subject to chance regardless of the information available
Uncertainty: information about future events are incomplete
Ambiguity and Conflict: the goals and/or problem are unclear and difficult to define
Briefly define the characteristics of an effective goal.
Specific and Measurable - trying to "do your best" or "do better" is like trying to eat the hole in a donut. There's nothing there to chew on or digest. You need to define some very specific, concrete, and measurable action-steps that tell you what your goal looks like in real-life terms. Include how you will measure your results so you can tell whether you are getting anywhere.
Defined time period - goals should specify the time period over which they will be achieved. Goals need to come with deadlines, due dates, and payoff schedules.
Cover key results areas – goals cannot be set for every aspect of employee behavior or organizational performance. Instead, managers should identify a few key result areas, perhaps up to four or five for any organizational department or job.
Challenging but realistic - Your goals should be realistic and suited to your present capabilities. When goals are unrealistic they set employees for failure and decrease employee performance.
Linked to rewards – the achievement of goals depends on the extent to which employees are rewarded with salary increases, promotions, and awards. People who attain goals should be rewarded.
List and define the four major activities that must occur in order for management by objectives (mbo) to succeed.
1. Set goals: This is the most difficult step in MBO. Setting goals involves employees at all levels and looks beyond day to day activities to answer the question what are we trying to accomplish? A good plan should be concrete and realistic, provide a specific target and time frame and assign responsibility. Goals may be quantitative or qualitative. Quantitative goals are described in numerical terms such as salesperson Jones will obtain 16 new accounts in December. Qualitative goals use statements such as Marketing will reduce complaints by improving customer service next year. Goals should be jointly derived. Mutual agreements between employees and supervisors creates the strongest commitment to achieving goals. In the case of teams, all team members may participate in setting goals. 2. Develop action plans: An action plan defines the course of action needed to achieve the stated goals. Action plans are made for both individuals and departments. 3. Review progress: A periodic progress review is important to ensure that action plans are working. These reviews can occur informally between the managers and subordinates where the organization may wish to conduct three, six, or nine month’s reviews during the year. This periodic check-up allows managers and employees to see whether they are on target or whether corrective action is necessary. Managers and employees should not be locked into predefined behavior and must be willing to take whatever steps are necessary to produce meaningful results. The point of MBO is to achieve goals. The action plan can be changed whenever goals are not being met. 4. Appraise overall performance: The final step in MBO is to carefully evaluate whether annual goals have been achieved for both individuals and departments. Success or failure to achieve goals can become part of the performance appraisal system and the designation of salary increase and other rewards. The appraisal of departmental and overall corporate performance shapes goals for the next year The MBO cycle repeats itself on an annual basis.