Final Exam of Management (2006/01/10)
Multiple Choice (40%) 1. When the information available to a manager is incomplete because the manager must make a decision quickly, this is known as: A) bounded rationality. B) devil's advocacy. C) dialectical inquiry. D) a time constraint. E) an information cost. 2. The pattern of faulty and biased decision-making that occurs in groups whose members strive for argument at the expense of good decision-making is called: A) Brainstorming B) Groupthink C) Devil's advocacy D) Bounded rationality E) Satisficing 3. A task force manager holds a meeting and encourages members to share the progress of their work. This manager is focusing in the ________ principle of creating a learning organization. A) personal mastery B) mental models C) team learning D) shared vision E) systems thinking 4. A manager challenges his subordinates to ―think outside the box‖ to improve the way the unit does its work. This manager is focusing on the _________ of creating a learning organization. A) personal mastery B) mental models C) team learning D) shared vision E) systems thinking 5. BMW produces cars exclusively for high-income customers. BMW is pursuing a _________ strategy A) focused differentiation B) focused low-cost C) differentiation D) low-cost E) a combination of the above 6. When an organization enters a new type of industry, which is not similar in any way to the current businesses of the organization, this is known as which type of strategy? A) Concentration on a single business B) Unrelated diversification C) International expansion D) Related diversification E) Vertical integration 7. Two divisions of a company decide to use the same manufacturing facilities to capitalize on the organization's excess capacity and to reduce the fixed costs assigned by corporate headquarters. This is an example of: A) a diversification strategy. B) concentration on a single business. C) international expansion. D) a focused-differentiation strategy. E) synergy. 8. McDonald's Corporation made a basic decision as to how to divide the tasks of the jobs of ―chefs‖ and ―food servers‖ in its restaurants. This was an example of: A) continuous-process technology. B) job design. C) divisional structure. D) product structure. E) matrix structure. 9. The idea behind the concept of ―job enrichment‖ is that __________ a worker's responsibility will __________ the worker's involvement in his or her job and __________ the worker's interest in the quality of the goods the worker produces. A) increasing; decrease; decrease B) decreasing; increase; increase C) increasing; increase; decrease D) increasing; increase; increase E) none of the above 10. The number of subordinates who report directly to a manager is known as what aspect of that manager's responsibility? A) Authority B) Hierarchy of authority C) Chain of command D) Span of control E) Market structure
Short answer Questions (30%) 11. Output control methods are one way for managers to attempt to motivate workers. Behavior control is another way. Give a specific example of how a manager would use each of these methods. 12. Compare programmed and non-programmed decision-making in organizations and give two realistic business examples of each of these two types of decision-making. 13. March and Simon developed three important concepts in their administrative model of decision-making. Discuss these three concepts. 14. Michael Porter presented four ways in which the top management of an organization could select a business-level strategy for their organization. Discuss any two of these four ways of increasing the value of the organization's products and explain the advantages and disadvantages of the strategies that you choose. 15. Discuss the advantages and disadvantages of a matrix structure of organizational design. 16. Discuss the three situational determinants in Fiedler's leadership theory that allow a leader to determine the favorableness or un-favorableness of a situation for leading. Essay 17. When airline flights are overbooked in the United State, an auction is sometimes held to see which passengers are willing to transfer to a later flight in return for compensation. The compensation is determined by the lowest price needed to induce the required number of people to give up their seats. This seems to work fairly well. Would such an auctioning approach work for deciding whether a flight should permit smoking or gain a prioritized landing? And why？ (7%) 18. GM’ new Saturn automobile line was a completely new design that was built by a specially-recruited workforce in a new factory. To market the new car, GM set up separate dealerships and announced the sales people in these organizations would not be paid on a commission basis, as is common in the industry. Instead, they were to be salaried. Why should GM do so? What might be the advantage of this pay policy? (7%) 19. Honda Motor Company engages in sales and manufacturing of automobiles, but there are also other independent Honda companies for engineering and for research. What problems or concerns might have promoted Honda to adopt this unusual form of organization? (8%) 20. Stanford University’s Honor Code forbids faculty from monitoring students during examinations. What effect would expect this to have on student behavior? On the faculty? On the relationships between students and faculty? (8%)
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D B C B A B E B D D Managers can control the output of subordinates by setting the desired quantity/budget level, and by using management by objectives (MBO) as well as self-control by employees themselves, e.g., the salespeople, and the research professionals. Managers can attempt to control the behavior of subordinates by direct supervision and by the discipline of rules and SOPs on the working procedures, e.g., to supervise the workers on the assembly line. Programmed decision making is routine, automatic. It arises in situations that an organization has faced many times before, and for which it can develop rules and guidelines to be applied. For example, the regular purchasing under the material quantity below the safe stock. Non-programmed decision making is non-routine. It arises in situations that are new, ambiguous, and/or complex. No ready-made decision rules have been set down. For example, the terrorism caused the shortage of supply chain. The three important concepts in this model are bounded rationality, incomplete information, and satisficing decisions. March and Simon believed that managers have the cognitive limitations to absorb, process and evaluate all of the possible relevant information for a complex decision. Moreover, the managers confront too many unknown outcomes and the situations of asymmetric and ambiguous information. So they actually search and choose an acceptable or satisfactory response to problems and opportunities, rather than trying to make the best decision. Managers can select a low-cost strategy (trying to provide the lowest-cost products to increase the market share, however, it may fail under diverse preferences), a differentiation strategy (trying to provide many different products to attract every market segment, but it costs much), a focused low-cost strategy (trying to target a specific price-sensitive segment, but it may limit the growth and also may be deprived of the territory by the dominants), or a focused differentiation strategy. Advantages: Most flexible of organizational structures. Can maximize the use of human resources as members are assigned on and off teams as needs change. Can be intrinsically motivating for employees, who have a high degree of empowerment. Disadvantages: Complex, sometimes stressful for employees and managers. Conflict may be a problem. Needs to be supported by a culture that supports collaboration and flexibility. Fiedler postulated that leader-member relations, task structure, and the leader's position power all contribute to determining how favorable a situation was for leadership. The task-oriented leadership style may be proper under more favorable condition and the worst one, while the relationship-oriented style may be suitable for the between conditions. The criteria of measurement – Visibility – Timely
– Controllability – Contestability – Sensibility – Relevancy to objectives – Team-based or personal contribution – Delineation of interactive externality Remove the anti-incentive circumstances—Success beyond diligence – Unpredictable market dynamics and Unforeseeable consequences of diligent efforts – Novel vs. Mature – New brands vs. Incumbents – Additional compensation or raise the fixed salary higher 18. Auctioning for the smoking right Economic criteria—additional revenue benefit to the airline minus the installation cost of special cabin Legal criteria—infeasible under the flight regulation or the health related lawsuit Practical criteria—difficult to quarantine the smoke spreading absolutely in the flight cabin (non-exclusive externality) Ethical criteria—the dirty smoke mist as the poisonous gas to the lungs Auctioning for the landing priority Economic criteria—discrimination pricing benefit to the airport; the potential catastrophe after the air traffic jamming Legal criteria—(in-)feasible under the flight regulation or the discretion depended on air traffic controller Practical criteria—resulting in too many emergency landing; to induce the fuel-wasting hover and unnecessary going around Ethical criteria—the safety of flight passengers; the most dangerous timing of flight occurs at taking off and landing 19. The Honda marketing & manufacturing division and the R&D division may be mutually locked due to the asset specificity problem (lower reselling/disposal/non-salvageable opportunity causing the prohibitively expensive transaction costs (TC) and small number (monopoly/monopsony) inherently. Even though, the relationship of internal hierarchy and cooperative integration could reduce TC, however, it may be too interdependent to response quickly because of possibly high bureaucratic cost caused by no additional consideration about alternatives. So, operating separately as the independent profit centers which were obliged to purposefully break through the adverse situations of high TC may be a proper adaptive solution. The Honda R&D corporate had to provide many workable technologies for manufacturers beyond the Honda Motor. On the other hand, the Honda Motor needed to look for attractable car designs from many outstanding designers. To embrace the competition mechanism into the internal structure could induce the executives to challenge the status quo no matter the situation is advantageous or adverse. 20. If the teachers and students both obey this code, after the long-run socialization of honest and trust through some enforcement mechanisms, e.g., the flunk-out term if cheating, the special exam ceremonies of integration and enhancement will disciplined the students and many alumni with honor. This characteristic and university culture will seem to be a creditable signal to the outside society and further to attract more newcomers in the future. The higher entrance competition will help the university teachers choose higher talented students to educate and research collectively. In the meantime, the teachers will emphasize the distinctive personal views coming from the students rather than the standardized answers without creativity in the examination process, so as to prevent copying and imitation. Besides, this self-monitoring process also encouraged the students to bring up the innovative spirits, integrity, and achieve in the high-tech areas eventually.