PowerPoint Presentation by Charlie CookThe University of West .docx

PowerPoint Presentation by Charlie Cook
The University of West Alabama
© 2013 Cengage Learning. All rights reserved. May not be
copied, scanned, or duplicated, in whole or in part, except for
use as permitted in a license distributed with a certain product
or service or otherwise on a password-protected website for
classroom use.
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11–1
Management 11e
Griffin
Identify the basic elements of organizations.
Describe the alternative approaches to designing jobs.
Discuss the rationale and the most common bases for grouping
jobs into departments.
Describe the basic elements involved in establishing reporting
relationships.
Discuss how authority is distributed in organizations.
Discuss the basic coordinating activities undertaken by
organizations.
Describe basic ways in which positions within an organization
can be differentiated
11–2

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Learning Objectives
11–2
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Management 11e
Griffin
The Elements of Organizing
Organizing
Deciding how to best group organizational activities and
resources.
Organization Structure
The set of building blocks that can be used to configure an
organization.
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11–3

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11–3
Management 11e
Griffin
Designing Jobs
Job Design
The determination of an individual’s work-related
responsibilities.
Job Specialization (Division of Labor)
The degree to which the overall task of the organization is
broken down and divided into smaller component parts.
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Management 11e
Griffin
Designing Jobs (cont’d)
Benefits of Job Specialization
Workers can become proficient at a task.
Transfer time between tasks is decreased.

Specialized equipment can be more easily developed.
Employee replacement becomes easier.
Limitations of Job Specialization
Boredom and dissatisfaction with mundane tasks.
Anticipated benefits do not always occur.
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11–5
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Management 11e
Griffin
Adam Smith’s Example of Job Specialization
11–6
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Making a pin (nail) requires 18 tasks
1 worker doing all 18 tasks might make
20 pins (nails) a day.
20 workers = (20 x 20) = 400 pins

______________________________
With specialization:
20 workers make 100,000 pins a day.
1 worker = 5,000 pins
20 pins vs. 5,000 pins per worker
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Management 11e
Griffin
Alternatives to Job Specialization
Job
Enlargement
Job
Enrichment
Job
Rotation
Job Specialization
Alternatives

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11–7
Management 11e
Griffin
Alternatives to Job Specialization
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11–8
Job
rotation
Job characteristics approach
Job enlargement
Job Specialization
Alternatives
Job enrichment
Work teams

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11–8
Management 11e
Griffin
Job Characteristics: Core Dimensions
Skill Variety
The number of tasks a person does in a job
Task Identity
The extent to which the worker does a complete or identifiable
portion of the total job
Task Significance
The perceived importance of the task by the worker
Autonomy
The degree of control the worker has over how the work
is performed
Feedback
The extent to which the worker knows how well the job
is being performed
Growth Need Strength
The desire for people to grow, develop, and expand their
capabilities that is their response to the core dimensions
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11–9
Management 11e
Griffin
11–10
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11.1 The Job Characteristics Approach
Management 11e
Griffin
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11–10
Alternatives to Specialization (cont’d)
Work Teams
An alternative to job specialization that allows the entire group
to design the work system it will use to perform an interrelated
set of tasks.

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Management 11e
Griffin
Management Challenge Question
You will be leading your company’s transition team after the
acquisition of your company by
a much larger competitor.
What organizing problems would you anticipate will arise in
merging the two companies?
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11–12
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Management 11e
Griffin
Grouping Jobs: Departmentalization
Departmentalization
The process of grouping jobs according to some logical
arrangement.
Rationale for Departmentalization
Organizational growth exceeds the owner-manager’s capacity to
personally supervise all of the organization.
Additional managers are employed and assigned
specific employees to supervise.
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Management 11e
Griffin
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11–14
11.2 Bases for Departmentalization
Function
Product
Customer
Location
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Management 11e
Griffin
Functional Departmentalization
Advantages
Each department can be staffed by functional-area experts.
Supervision is facilitated in that managers only need be familiar
with
a narrow set of skills.
Coordination inside each department is easier.
Disadvantages
Decision making becomes slow and bureaucratic.
Employees narrow their focus to their department and lose sight
of broader goals and issues.
Accountability and performance are difficult to monitor.
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11–15
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Management 11e
Griffin
Product Departmentalization
Advantages
All activities associated with one product are integrated and
coordinated.
Speed and effectiveness
of decision making are enhanced.
Performance of individual products or product groups can be
assessed.
Disadvantages
Managers may focus
on their product to the exclusion of the rest of the organization.
Administrative costs
may increase due to each department having its own functional-
area experts.
Grouping activities around products or product groups.
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Management 11e
Griffin
Customer Departmentalization
Grouping activities to respond to and interact with specific
customers and customer groups.
Advantage
Skilled specialists can deal with unique customers or
customer groups.
Disadvantage
A large administrative staff is needed to integrate activities of
various departments.
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Management 11e
Griffin

Location Departmentalization
The grouping of jobs on the basis of defined geographic sites or
areas.
Advantage
Enables the organization to respond easily to unique
customer and environmental characteristics.
Disadvantage
Large administrative staff may be needed to keep track of units
in scattered locations.
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Management 11e
Griffin
Other Forms of Departmentalization
Alternative Groupings
By specific units of time
By sequence.
By customer characteristics, products, or services
Other Considerations
Departments are often called by other names.
Divisions, units, sections, and bureaus

Organizations are likely to employ multiple bases of
departmentalization, depending on level.
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11–19
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Management 11e
Griffin
Establishing Reporting Relationships
11–20
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Scalar
Principle
Span of
Management
Chain of Command
Reporting Relationships
Considerations

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Management 11e
Griffin
Reporting Relationships
Chain of Command
A clear and distinct line of authority among
the positions in an organization.
Unity of Command
Each person within an organization must have a clear reporting
relationship to one and only one boss.
Scalar Principle
A clear and unbroken line of authority must extend from the
bottom to the top of the organization.
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Management 11e

Griffin
Span of Management
Span of Control
The number of people reporting to a manager.
A. V. Graicunas
Subordinate interactions
Direct—manager’s relationship with each subordinate.
Cross—among the subordinates themselves.
Group—between groups of subordinates.
Formula for the number of interactions of all types:
I = N(2N/2 + N – 1), where I is the total number of interactions
and N is number of subordinates.
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Management 11e
Griffin
Span of Management (cont’d)
Narrow Versus Wide Spans
Ralph C. Davis
Operative span for lower-level managers of up to 30 workers.

Executive span for middle and top managers set at 3 to 9.
Span depends on managers’ jobs, company growth rate, and
similar factors.
Lyndall Urwick and General Ian Hamilton
Executive span should never exceed six persons.
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11–23
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Management 11e
Griffin
Establishing Reporting Relationships: Tall versus Flat
Organizations
Tall Organizations
Are more expensive because of the number
of managers involved.
Foster more communication problems because of the number of
people through whom information must pass.
Flat Organizations
Lead to higher levels
of employee morale
and productivity.
Create more administrative responsibility for the relatively few

managers.
Create more supervisory responsibility for managers due to
wider spans of control.
11–24
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11–24
Management 11e
Griffin
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11–25
11.3 Tall Versus Flat Organizations

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Management 11e
Griffin
Competence of supervisor and subordinates
(the greater the competence, the wider the potential span)
Physical dispersion of subordinates
(the greater the dispersion, the narrower the potential span)
Extent of nonsupervisory work in manager’s job
(the more nonsupervisory work, the narrower the potential span)
Degree of required interaction
(the less required interaction, the wider the potential span)
Extent of standardized procedures
(the more procedures, the wider the potential span)
Similarity of tasks being supervised
(the more similar the tasks, the wider the potential span)
Frequency of new problems
(the higher the frequency, the narrower the potential span)
Preferences of supervisors and subordinates
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11.1 Factors Influencing the Span of Management
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11–26
Management 11e
Griffin
Distributing Authority
Authority
Power that has been legitimized by the organization.
Delegation
The process by which managers assign a portion of their total
workload to others.
Reasons for Delegation
To enable the manager to get more work done by utilizing the
skills and talents of subordinates.
To foster development of subordinates by having them
participate in decision making and problem solving.
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Management 11e
Griffin

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11.4 Steps in the Delegation Process
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Management 11e
Griffin
Problems in Delegation
Manager
Reluctant to delegate.
Disorganization prevents planning work in advance.
Subordinate’s success threatens superior’s advancement.
Lack of trust in the subordinate to do well.
Subordinate
Reluctant to accept delegation for fear of failure.
Perceives no rewards for accepting additional responsibility.
Prefers to avoid any risk and responsibility.
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Management 11e
Griffin
Decentralization and Centralization
Decentralization
Systematically delegating power and authority throughout the
organization to middle- and lower-level managers.
Centralization
Systematically retaining power and authority
in the hands of higher-level managers.
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Management 11e
Griffin

Factors in the Choice of Centralization
11–31
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Organization’s
Centralization Choice
History of the organization
Nature
(cost and risk) of decisions to be made
External environment’s complexity and uncertainty
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Management 11e
Griffin
Coordinating Activities
Coordination
The process of linking the activities of the various departments
of the organization.
The Need for Coordination
Where departments and work groups are interdependent; the
greater the interdependence, the greater the need for
coordination.

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Management 11e
Griffin
Coordinating Activities:
Forms of Interdependence
Pooled interdependence
When units operate with little interaction; their output is simply
pooled at the organizational level.
Sequential interdependence
When the output of one unit becomes the input of another unit
in sequential fashion.
Reciprocal interdependence
When activities flow both ways between units.
11–33
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Management 11e
Griffin
Input
Output
Sequential
Major Forms of Interdependence
11–34
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Pooled
Input
Input
Input
Output

Output
Input
Output
Input
Output
Input
Reciprocal
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Management 11e

Griffin
Structural Coordination
Task
Forces
Integrating Departments
Electronic Coordination
Structural
Coordination
Techniques
Management Hierarchy
Rules and Procedures
Managerial Liaison Roles
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11–35
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Management 11e
Griffin
Structural Coordination Techniques
The Managerial Hierarchy
Placing one manager in charge of interdependent departments or
units.

Rules and Procedures
Routine coordination of activities using rules and procedures
that set priorities and guidelines for actions.
Managerial Liaison Roles
A manager coordinates interdependent units by acting as a
common point of contact, facilitating the flow of information.
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Management 11e
Griffin
Structural Coordination… (cont’d)
Task Forces
Used with multiple units when coordination is complex,
requiring more than one individual and the need for
coordination is acute.
Disbanded when need for coordination has been met.
Integrating Departments
Permanent organizational units that maintain internal
integration and coordination on an ongoing basis.
May have authority and budgetary controls.
Electronic Coordination
E-mail, electronic scheduling, PDAs, cell phones

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Management 11e
Griffin
Differentiating Between Positions
Line Positions
Positions in the direct chain of command responsible for the
achievement of an organization’s goals.
Have formal (legitimate) authority.
Staff Positions
Positions intended to provide expertise, advice, and support to
line positions.
Have advisory authority; can give compulsory advice.
Have functional authority to enforce compliance with
organizational policies and procedures.
Administrative Intensity
The degree to which managerial positions are concentrated in
staff positions.

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Management 11e
Griffin
KEY TERMS
organizing
organization structure
job design
job specialization
job rotation
job enlargement
job enrichment
job characteristics approach
work teams
departmentalization
functional departmentalization
product departmentalization
customer departmentalization
location departmentalization
chain of command
span of management
authority
delegation
centralization
coordination
pooled interdependence

sequential interdependence
reciprocal interdependence
line position
staff position
administrative intensity
11–39
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Key terms for Chapter 11.
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11–39
Management 11e
Griffin
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10–1
Management 11e
Griffin
Discuss the nature of entrepreneurship.
Describe the role of entrepreneurship in society.
Understand the major issues involved in choosing strategies for
small firms and the role of international management in
entrepreneurship.
Discuss the structural challenges unique to entrepreneurial
firms.
Understand the determinants of the performance of small firms.
10–2
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Learning Objectives
10–2
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Management 11e
Griffin

The Nature of Entrepreneurship
Entrepreneurship
The process of planning, organizing, operating, and assuming
the risk of a business.
Entrepreneur
Someone who engages in entrepreneurship.
Small Business
A business that is privately owned by one individual or a small
group of individuals; it has sales and assets that are not large
enough to influence its environment.
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Management 11e
Griffin
The Role of Entrepreneurship in Society
Research Findings:
Most new businesses fail, those that survive often do so because
the entrepreneur works for little income.
More than 98% of U.S. businesses have fewer than 100
employees.
Most U.S. workers work for small businesses.
The majority of small businesses are owner operated.

Small business is a strong presence in both mature and emerging
economies
Small businesses have a strong effect on job creation,
innovation, and are important to big businesses.
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10–4
Management 11e
Griffin
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10–5
10.1 The Importance of Small Business in the United States
(a) Approximately 86 percent of all U.S. businesses employ
fewer than 20 people; another 11.7 percent employ between 20
and 99 people. In contrast, only about 2.1 percent employ
between 100 and 400 workers, and another .2 percent employ
500 or more. (b) 24.5 percent of all U.S. workers are employed

by firms with fewer than 20 people; another 29.6 percent work
in firms that employ between 20 and 99 people. 25.5 percent of
U.S. workers are employed by firms with 100–499 employees,
and another 20.3 percent work for businesses that employ 500
or more total employees
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Management 11e
Griffin
Entrepreneurship’s Role in Society
Small Businesses’ Role in Job Creation
Create many of the new jobs in the U.S.
Dominate sectors that have added the most jobs.
Represent 92% of all U.S. exporters.
Innovation
Major innovations are as likely to come from small
businesses as from large firms.
Much of what is created in the high-technology sectors comes
from start-up companies.
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10–6
Management 11e
Griffin
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10–7
10.2 Representative Jobs Created and Lost between 2007–2008
Aetna
Wal-Mart
Home Depot
Verizon
Communications
Sprint Nextel Corp.
Johnson & Johnson
IBM
Merck
Pfizer
Caterpillar
–1,240
–1,450
–7,000
–8,000
–8,000

–8,900
–10,000
–16,000
–19,500
–20,000
Whole Foods Market
Microsoft
T-Mobile
Google
Nordstrom
Cisco Systems
Deloitte
Accenture
Edward Jones
+8,570
+7,130
+3,586
+3,550
+2,421
+2,412
+2,311
+2,176
+2,1290
JOB LOSSES
JOB GAINS
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Management 11e
Griffin

Entrepreneurship’s Role in Society (cont’d)
Importance to Large Businesses
Most products made by large manufacturers are sold to
customers by small businesses.
Small businesses as suppliers provide large firms with essential
services, supplies, and raw materials.
Large businesses outsource many routine business operations
such as packaging, delivery, and distribution to small
businesses.
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10–8
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10–8
Management 11e
Griffin
Strategy for Entrepreneurial Organizations
10–9
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Emphasizing distinctive competencies

Gaining first mover advantage
Choosing an industry in which to compete
Basic Strategic
Challenges
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10–9
Management 11e
Griffin
Services are the fastest growing segment of small-business
enterprise.
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10.3 Small Businesses (Businesses With Fewer Than Twenty
Employees) by Industry
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Management 11e
Griffin
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10–11
10.4 Economies of Scale in Small-business Organizations
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Management 11e
Griffin
Emphasizing Distinctive Competencies
Identifying Niches in Established Markets
Niches represent a market segment currently unexploited in a
market where several large firms compete.
Niches offer a competitive advantage to small businesses.
Identifying New Markets
Using the transfer of an existing product/service to explore a
new market.
Creating new industries/products/services.

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Management 11e
Griffin
First Mover Advantages
First-Mover Advantage
Exploiting an opportunity before any other firm does.
Why first-mover advantage is not taken by larger firms:
Decisions are slowed by organizational hierarchy.
Size of the assets at risk makes large firms overly cautious.
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10–13
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10–13

Management 11e
Griffin
What would you caution an entrepreneur about the dangers of
taking first-mover advantage?
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10–14
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Management 11e
Griffin
10–14
Writing a Business Plan
Business Plan
is a document that summarizes the business strategy and
structure. It should include:
business goals and objectives.
strategies used to achieve these goals and objectives.
a plan of how the entrepreneur will implement these strategies.
Entrepreneurship and International Management
Expansion and growth potential in foreign markets.
Entering a foreign country’s market can be an important catalyst
for success.

10–15
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Management 11e
Griffin
Structure of Entrepreneurial Organizations
Starting the New Business
Buying an Existing Business
Business has a proven ability to draw customers and make a
profit (the business is a going concern).
Networks (e.g., customers and suppliers) are established.
Negative: New owners inherit any existing problems.
Starting from Scratch
Avoids problems associated with previous owners.
Freedom to choose suppliers, equipment, location, and workers.
Negative: More business risk and uncertainty.
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Management 11e
Griffin
Getting into the Game
Identifying a Genuine Business Opportunity
Who are my customers?
Where are they?
At what price will they buy my product?
In what quantities will they buy?
Who are my competitors?
How will my product differ from those of my competitors?
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Management 11e
Griffin

Financing the New Business
Venture Capital Companies
Small-Business Investment Companies
SBA Financial Programs
Sources of
New Business
Financing
Personal
Resources
Strategic
Alliances
Lenders
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10–18
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Management 11e
Griffin
Seeking New Business Advice

Advisory Boards
Management Consultants
Small Business Administration
Networking with Others
Sources of
Management Advice
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Management 11e
Griffin
Franchising
The Franchising Agreement
Governs the operation of a franchise business by the
entrepreneur (the franchisee) under a license by a parent
company (the franchiser).
The entrepreneur pays the parent company for use of
trademarks, products, formulas, and business plans.

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Management 11e
Griffin
Franchising (cont’d)
Disadvantages
Start-up fees to purchase franchise.
Limitations of franchise (market area, product, customers).
Loss of independence due to imposed operational controls of
franchiser.
Advantages
Reduced financial risk of new business success through
experience provided by franchiser.
Training, financial, and management support by franchiser.
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Management 11e
Griffin
Management Challenge Questions
What characteristics of a franchisee would an
entrepreneur/franchisor likely find most attractive?
What aspects of this relationship could be detrimental to either
party?
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10–22
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Management 11e
Griffin
10–23

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The Performance of Entrepreneurial Organizations
Crossovers to small business
by former large-business employees
The emergence
of E-commerce
Trends in New Business Start-Ups
Better survival rates for
small businesses
Increased entrepreneurial opportunities for minorities and
women
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Management 11e
Griffin
Success in Entrepreneurial Organizations
Reasons for Failure
Managerial incompetence/ inexperience of the entrepreneur.
Neglect in not devoting sufficient time and effort to the
business.
Weak control systems that do not warn of impending problems.
Insufficient capital to sustain the business until it starts to turn
a profit.
Reasons for Success

Hard work, drive, and dedication by the entrepreneur.
Careful analysis of market conditions provides insights about
business conditions
Managerial competence through training and experience
contributes to success.
Luck sometimes plays a role.
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Management 11e
Griffin
KEY TERMS
entrepreneurship
entrepreneur
small business
established market
niche
first-mover advantage
business plan
venture capital company
franchisee
franchisor
franchising agreement

10–25
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Management 11e
Griffin
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9–1
Management 11e

Griffin
Define decision making and discuss types of decisions and
decision-making conditions.
Discuss rational perspectives on decision making, including the
steps in rational decision making.
Describe the behavioral aspects of decision making.
Discuss group and team decision making, including the
advantages and disadvantages of group and team decision
making and how it can be more effectively managed.
9–2
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Learning Objectives
9–2
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Management 11e
Griffin
The Decision Making Process
Decision Making
The act of choosing one alternative from among a set of
alternatives.
Decision-Making Process:
Recognizing

and defining
the decision situation
Identifying alternatives
Choosing
the “best” alternative
Putting the alternative
into practice
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9–3
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Management 11e
Griffin
The Nature of Decision Making
Decision-Making Process (cont’d)
An effective decision optimizes some set of factors such as
profits, sales, employee welfare, and market share.
Managers make decisions about both problems and
opportunities.
9–4

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9–4
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Management 11e
Griffin
Types of Decisions
Programmed Decision
is a fairly structured decision or one that recurs with some
frequency or both.
Example: Starting your car in the morning.
Nonprogrammed Decision
is relatively unstructured and occurs much less often a
programmed decision.
Example: Choosing a vacation destination.
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Management 11e
Griffin
Decision-Making Conditions
Decision Making Under Risk
Decision Making Under Uncertainty
Decision Making Under Certainty
Conditions Affecting
Decision Making
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9–6
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Management 11e
Griffin
Level of ambiguity and chances of making a bad decision
Uncertainty
Risk
Certainty
The decision maker faces conditions of…
Lower

Moderate
Higher
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9.1 Decision-Making Conditions
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Management 11e
Griffin
Decision-Making Conditions
Decision Making Under Certainty
The decision maker knows with reasonable certainty what the
alternatives are and what conditions are associated with each
alternative.
Decision Making Under Risk
The availability of each alternative and its potential payoffs and
costs are all associated with risks.
Decision Making Under Uncertainty
The decision maker does not know all the alternatives, the risks
associated with each, or the consequences of each alternative.

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Management 11e
Griffin
When faced with a decision situation, managers should…
obtain complete and perfect information
eliminate uncertainty
evaluate everything logically and rationally
…and end up with
a decision that best serves the interests of the organization
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9.2 The Classical Model of Decision Making
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9–9
Management 11e
Griffin
StepDetailExample1. Recognizing and defining the decision
situationSome stimulus indicates that a decision must be made.
The stimulus may be positive or negative.A plant manager sees
that employee turnover has increased by 5 percent.2.
Identifying alternativesBoth obvious and creative
alternatives are desired. In general, the more important the
decision, the more alternatives should be generated.The plant
manager can increase wages, increase benefits, or change hiring
standards.3. Evaluating alternativesEach alternative is
evaluated to determine its feasibility, its satisfactoriness, and
its consequences.Increasing benefits may not be feasible.
Increasing wages and changing hiring standards may satisfy all
conditions.4. Selecting the best alternativeConsider all
situational factors and choose the alternative that best fits the
manager’s situation.Changing hiring standards will take an
extended period of time to cut turnover, so increase wages.5.
Implementing the chosen alternativeThe chosen alternative
is implemented into the organizational system.The plant
manager may need permission from corporate headquarters. The
human resource department establishes a new wage structure.6.
Following up and evaluating the resultsAt some time in the
future, the manager should ascertain the extent to which the
alternative chosen in step 4 and implemented in step 5 has
worked.The plant manager notes that, six months later, turnover
dropped to its previous level
classroom use.
9–10
9.1 Steps in the Rational Decision-making Process

classroom use.
9–10
Management 11e
Griffin
Your are captain of a container ship caught in a typhoon. Water
is leaking into the cargo hold and you are unsure of whether or
not you should abandon ship.
What state of uncertainty is described in this scenario?
How does the state of uncertainty affect the likelihood that you
will make the correct decision?
classroom use.
9–11
classroom use.
9–11
Management 11e

Griffin
Is the alternative
feasible?
Eliminate from
consideration
Is the alternative
satisfactory?
Are the alternative’s
consequences
affordable?
Retain for further
consideration
Yes

Yes
Yes
Eliminate from
consideration
Eliminate from
consideration

No
No
No
classroom use.
9–12
9.3 Evaluating Alternatives in the Decision-making Process
classroom use.
9–12
Management 11e
Griffin
Behavioral Aspects of Decision Making
Satisficing
Bounded rationality
Coalitions
Escalation of commitment
Intuition
Risk propensity
Influences on
Decision Making

classroom use.
9–13
classroom use.
9–13
Management 11e
Griffin
When faced with a decision situation, managers actually…
use incomplete and imperfect information
are constrained by bounded rationality
tend to satisfice
…and end up with
a decision that may or may not serve the interests of the
organization
classroom use.
9–14
9.4 The Administrative Model of Decision Making

classroom use.
9–14
Management 11e
Griffin
Behavioral Aspects of Decision Making
Bounded Rationality
Decision makers are limited by their values and unconscious
reflexes, skills, and habits.
Satisficing
The tendency to search for alternatives only until one is found
that meets some minimum standard of sufficiency to resolve the
problem.
Coalition
A positive or negative political force in decision making which
consists of an informal alliance of individuals or groups formed
to achieve a goal.
classroom use.
9–15
classroom use.
9–15
Management 11e
Griffin

Behavioral Aspects of Decision Making (cont’d)
Intuition
An innate belief about something without conscious
consideration.
Escalation of Commitment
Staying with a decision even when it appears to be wrong.
Risk Propensity
The extent to which a decision maker is willing to gamble when
making a decision.
9–16
classroom use.
classroom use.
9–16
Management 11e
Griffin
How could a coalition lead to escalation of commitment?
What can be done to prevent or avoid the escalation?
9–17
classroom use.

classroom use.
9–17
Management 11e
Griffin
Managerial Ethics and Decision Making
Individual
Ethics
Managerial
Ethics
Employees
Other economic agents
Organizational
Ethics
classroom use.
9–18
classroom use.
9–18
Management 11e

Griffin
Ethics and Decision Making
Managerial Ethics
Individual ethics (personal beliefs about right and wrong
behavior) combine with the organization’s ethics to create
managerial ethics.
Components of Managerial Ethics:
Relationship of the firm to employees
Employees to the firm
The firm to other economic agents
9–19
classroom use.
classroom use.
9–19
Management 11e
Griffin
Group and Team Decision Making
Interacting
group or team
Delphi
groups
Nominal

group
Forms of Group Decision Making
classroom use.
9–20
classroom use.
9–20
Management 11e
Griffin
Group and Team Decision Making
Forms of Group Decision Making
Interacting group or team
Consists of an existing group or newly formed team interacting
and then making a decision.
Delphi groups
Developing a consensus of expert opinion from a panel of
experts who individually contribute through a moderator.
Nominal groups
Generating ideas through the individual contributions of
alternatives that are winnowed down to reach a decision.
9–21

classroom use.
9–21
classroom use.
Management 11e
Griffin
AdvantagesDisadvantagesMore information and
knowledge are available.
More alternatives are likely
to be generated.
More acceptance of the final decision is likely.
Enhanced communication
of the decision may result.
Better decisions generally emerge.The process takes longer than
individual decision making, so
it is costlier.
Compromise decisions resulting from indecisiveness may
emerge.
One person may dominate
the group.
Groupthink may occur.
classroom use.
9–22
9.2 Advantages and Disadvantages of Group and Team
Decision Making

classroom use.
9–22
Management 11e
Griffin
Making Group and Team Decisions
More Effective
Being aware of the pros and cons of having a group or team
make a decision.
Setting deadlines for when decisions must be made.
Avoiding dominance problems by managing group membership.
Having each group member individually critically evaluate all
alternatives.
Not making your position known too early.
Appointing a group member to be a “devil’s advocate.”
Holding a follow-up meeting to recheck the decision.
9–23
classroom use.
classroom use.

9–23
Management 11e
Griffin
KEY TERMS
decision-making
decision-making process
programmed decision
nonprogrammed decision
state of certainty
stage of risk
state of uncertainty
classical decision model
steps in rational decision making
administrative model
bounded rationality
satisficing
coalition
intuition
escalation of commitment
risk propensity
interacting groups
Delphi group
nominal group
groupthink
9–24
classroom use.

classroom use.
9–24
Management 11e
Griffin
classroom use.
classroom use.
8–1
Management 11e
Griffin
Discuss the components of strategy, the types of strategic
alternatives, and the distinction between strategy formulation
and strategy implementation.
Describe how to use SWOT (Strengths, Weaknesses,
Opportunities, and Threats) analysis in formulating strategy.
Identify and describe various alternative approaches to
business-level strategy formulation.

Describe how business-level strategies are implemented.
8–2
classroom use.
Learning Objectives
8–2
classroom use.
Management 11e
Griffin
Identify and describe various alternative approaches to
corporate-level strategy formulation.
Describe how corporate-level strategies are implemented.
Discuss international and global strategies.
8–3
classroom use.
Learning Objectives (cont’d)
8–3

classroom use.
Management 11e
Griffin
The Nature of Strategic Management
Strategy
Is a comprehensive plan for accomplishing an organization’s
goals.
Strategic Management
Involves formulating and implementing strategies to take
advantage of business opportunities and meet competitive
challenges.
Effective Strategies
Promote superior alignment between an organization, its
environment, and its goals.
classroom use.
8–4
classroom use.
8–4
Management 11e
Griffin

Components of Strategy
Distinctive Competence
Competitive
Scope
Resource Deployment
Components of Effective Strategies
classroom use.
8–5
classroom use.
8–5
Management 11e
Griffin
Strategic Alternatives
Business-level strategy
Functional-level strategy
Operations-level strategy
Corporate-level strategy
Business-level strategy
Functional-level strategy
Operations-level strategy
Market A
Market B

classroom use.
8–6
classroom use.
8–6
Management 11e
Griffin
Types of Strategic Alternatives
Business-Level Strategy
The set of strategic alternatives that an organization chooses
from as it conducts business in a particular industry or a
particular market.
Corporate-Level Strategy
The set of strategic alternatives that an organization chooses
from as it manages its operations simultaneously across several
industries and several markets.
classroom use.
8–7

classroom use.
8–7
Management 11e
Griffin
Strategy Formulation and Implementation
Strategy Formulation
The set of processes involved in creating or determining the
organization’s strategies; it focuses on the content of strategies.
Strategy Implementation
The methods by which strategies are operationalized or
executed within the organization; it focuses on the processes
through which strategies are achieved.
classroom use.
8–8
classroom use.
8–8
Management 11e
Griffin
Management Challenge
If it is important that all employees be involved in strategy

implementation, then what are the most important
responsibilities for managers in helping them participate?
classroom use.
8–9
classroom use.
8–9
Management 11e
Griffin
Types of Strategies
Deliberate Strategy
A plan, chosen and implemented to support specific goals, that
is the result of a rational, systematic, and planned process of
strategy formulation and implementation.
Emergent Strategy
A pattern of action that develops over time in the absence of
goals or missions, or despite goals and missions.
classroom use.
8–10

classroom use.
8–10
Management 11e
Griffin
classroom use.
8–11
8.1 SWOT Analysis
classroom use.
8–11
Management 11e
Griffin
SWOT Analysis and Strategy
Evaluating Organizational Strengths
Organizational strengths
are skills and abilities enabling an organization to conceive of
and implement strategies.

Common organizational strengths
are organizational capabilities possessed by numerous
competing firms.
Distinctive competencies
are useful for competitive advantage and superior performance.
Imitation of distinctive competencies
removes the competitive advantage of the competency.
classroom use.
8–12
classroom use.
8–12
Management 11e
Griffin
SWOT Analysis and Strategy (cont’d)
Evaluating Organizational Strengths (cont’d)
Sustained competitive advantage
occurs when a distinctive competence cannot be easily
duplicated.
is what remains after all attempts at strategic imitations cease.
Strategic imitation of a distinctive competence is difficult
when:
it is based on unique historical circumstances.
it is difficult for competitors to understand its nature or
character.

it is based on a complex phenomenon (e.g., organizational
culture).
classroom use.
8–13
classroom use.
8–13
Management 11e
Griffin
Evaluating Organizational Weaknesses
Organizational weaknesses
Skills and capabilities that do not enable an organization to
choose and implement strategies that support its mission.
Weaknesses can be overcome by:
investments to obtain the strengths needed.
modification of the organization’s mission so it can be
accomplished with the current workforce.
Competitive disadvantage
occurs when an organization fails to implement strategies being
implemented by competitors.

classroom use.
8–14
classroom use.
8–14
Management 11e
Griffin
Evaluating an Organization’s Opportunities and Threats
Organizational opportunities
are areas in the organization’s environment that may generate
high performance.
Organizational threats
are areas in the organization’s environment that make it
difficult for the organization to achieve high performance.
classroom use.
8–15
classroom use.
8–15

Management 11e
Griffin
Formulating Business-Level Strategies
Overall cost leadership strategy
Focus
strategy
Differentiation strategy
Porter’s Generic
Strategies
classroom use.
8–16
classroom use.
8–16
Management 11e
Griffin
Formulating Business-Level Strategies
Porter’s Generic Strategies
Differentiation strategy
An organization seeks to distinguish itself from competitors
through the quality of its products or services.
Overall cost leadership strategy
An organization attempts to gain competitive advantage by

reducing its costs below the costs of competing firms.
Focus strategy
An organization concentrates on a specific regional market,
product line, or group of buyers.
classroom use.
8–17
classroom use.
8–17
Management 11e
Griffin
Strategy TypeDefinitionExamplesDifferentiationDistinguish
products
or servicesRolex (watches)
Godiva (chocolate)
Mercedes-Benz (automobiles)
Nikon (cameras)
Cross (writing instrumentsOverall cost leadershipReduce
manufacturing
and other costsTimex (watches)
Hershey (chocolate)
Kia (automobiles)
Kodak (cameras)
BIC (writing instruments)FocusConcentrate on specific regional
market, product market, or group of buyersTag Heuer (watches)
Vosges (chocolate)

Fiat, Alfa Romeo (automobiles)
Hasselblad (cameras)
Waterman (writing instruments)
Fisher-Price (handheld calculators)
classroom use.
8–18
8.1 Porter’s Generic Strategies
classroom use.
8–18
Management 11e
Griffin
Implementing Porter’s Generic Strategies
Differentiation
Marketing and sales emphasize high-quality, high-value image
of the organization’s products or services.
Overall Cost Leadership
Marketing and sales focus on simple product attributes and how
these product attributes meet customer needs in a low-cost and
effective manner.
Focus
Either differentiation or cost leadership, depending on which
one is the proper basis for competing in or for a specific market

segment, product category, or group buyers.
classroom use.
8–19
classroom use.
8–19
Management 11e
Griffin
Miles and Snow’s Strategy Types
Prospectors
Defenders
Analyzers
Reactors
Strategic Types of Organizations
classroom use.
8–20

classroom use.
8–20
Management 11e
Griffin
Miles and Snow’s Strategy Types
Prospector
Encourages creativity to seek out new market opportunities and
to take risks.
Develops the flexibility to meet changing market conditions by
decentralizing its organizational structure.
Defender
Focuses on defending its current markets by lowering its costs
and/or improving the performance of its current products.
Analyzer
Incorporates elements of both the prospector and the defender
strategies to maintain business and to be somewhat innovative.
Reactor
Has no clear strategy, reacts to changes and events.
classroom use.
8–21
classroom use.
8–21
Management 11e

Griffin
Strategy TypeDefinitionExamplesProspectorIs innovative and
growth oriented, searches for new markets and new growth
opportunities, encourages risk takingAmazon.com
3M
RubbermaidDefenderProtects current markets, maintains stable
growth, serves current customersBIC
eBay
Mrs. FieldsAnalyzerMaintains current markets and current
customer satisfaction with moderate emphasis on
innovationDuPont
IBM
Yahoo!ReactorNo clear strategy, reacts to changes in the
environment, drifts with eventsInternational Harvester
(now doing business as Navistar)
Joseph Schlitz Brewing Co.
Kmart
Montgomery Ward
(no longer in business)
classroom use.
8–22
8.2 The Miles and Snow Typology
classroom use.
8–22

Management 11e
Griffin
Introduction
Maturity
Growth
Time
Decline
Sales Volume
Stages
High
Low
classroom use.
8–23
8.2 The Product Life Cycle
classroom use.
8–23
Management 11e
Griffin
Management Challenge Questions
Which of Porter’s generic strategies are best suited for which

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