Principles-of-Management Principles of Management at Western Governors University(IAC1) Questions and Answers

A common consideration for starting a new business venture is finding the right opportunity. This involves identifying a viable market need or problem that the new business can address effectively. It also includes evaluating the feasibility, potential profitability, and personal fit of the business idea. Entrepreneurs must thoroughly assess opportunities to ensure that their venture can achieve success and sustainability​​.

The purpose of value chain analysis is to enable a company to understand the various activities involved in producing and delivering a product or service and to identify opportunities to gain a competitive advantage. The concept of the value chain was introduced by Michael Porter and involves examining all activities a firm performs and how they interact to create a competitive advantage.

Definition and Purpose:

A value chain describes the series of activities that an organization carries out to create value for its customers.

The primary purpose is to systematically identify and analyze these activities to understand where value is added to the final product or service, which can then be leveraged to gain a competitive advantage​​.

Components of Value Chain:

Primary Activities: These include inbound logistics, operations, outbound logistics, marketing and sales, and services. Each of these activities adds value directly to the production and delivery of the product.

Support Activities: These include procurement, technology development, human resource management, and firm infrastructure. These activities support the primary activities and add value indirectly​​.

Systematic Approach:

By analyzing each activity in the value chain, a firm can identify areas where efficiencies can be improved or where innovation can be introduced.

This systematic approach helps the firm to focus on optimizing these activities to reduce costs, improve quality, and differentiate its products from competitors, thus developing a competitive advantage​​.

In summary, value chain analysis allows a company to use a systematic approach in developing a competitive advantage by identifying and optimizing the activities that create value​​.

Entrepreneurs who want to start a new business need to assess levels of risk and innovation involved in establishing a new venture. The tool commonly used to assess these dimensions is the Entrepreneurial Strategy Matrix.

Entrepreneurial Strategy Matrix(Answer D): This matrix helps entrepreneurs evaluate their business ideas by plotting the level of innovation (low to high) against the level of risk (low to high). This analysis aids in understanding the feasibility and potential success of the new venture by identifying which strategies are likely to succeed given the level of risk and innovation involved​​.

Collaboration Tracking Matrix(Answer A) andInnovation Creation Diagram(Answer B): These are not standard tools used to assess risk and innovation in entrepreneurship as described in the textbook.

Entrepreneurial Loss Function Diagram(Answer C): This is not a recognized tool for assessing risk and innovation in entrepreneurial ventures as per the principles of management.

The first step of the control process is setting performance standards.

Setting Performance Standards(Answer B): This step involves establishing the criteria against which performance will be measured. These standards serve as the benchmark for assessing actual performance and determining any necessary corrective actions​​.

Measuring Performance(Answer C) andComparing Performance Against Standards(Answer D): These steps come after setting performance standards.

Taking Corrective Action(Answer A): This is the final step in the control process.

The process that includes automation or support of customer processes, direct communication with customers, and analysis of customer data for a broad range of purposes is Customer Relationship Management (CRM). CRM systems help organizations manage interactions with current and potential customers, streamline processes, and improve profitability by using customer data analysis for various business strategies​​.

When a computer manufacturer purchases the company that supplies computer chips for the company, it is using a vertical integration strategy. Vertical integration involves expanding a company's operations into different stages of production within the same industry, such as acquiring suppliers or distributors, to increase control over the supply chain and reduce costs​​.

Total Quality Management (TQM) has the benefits of group problem solving, information sharing, and cooperation across business functions. TQM focuses on continuous improvement in all aspects of an organization’s operations and involves all employees from top management to front-line workers. It encourages participation in decision-making and emphasizes collaboration and teamwork across different functions​​.

To stimulate conflict and get a different perspective, bringing in outsiders is the most appropriate technique.

Bringing in Outsiders(Answer A): This technique involves introducing new individuals who have different viewpoints, which can stimulate conflict and provide new perspectives that might be overlooked by the current team. It helps in shaking up the status quo and encouraging innovative thinking​​.

Appointing a Devil's Advocate(Answer B): While also effective in stimulating conflict, this technique involves someone within the group challenging ideas to ensure thorough evaluation. However, it might not provide as fresh a perspective as bringing in outsiders.

Authoritative Command(Answer C) andCompromise(Answer D): These are more about resolving conflict rather than stimulating it.

The type of organizational design used when a company groups employees according to the tasks they perform is a functional structure. In a functional structure, employees are organized based on their specific roles or functions within the organization, such as marketing, finance, production, or human resources. This allows for specialization and efficiency within each functional area​​.

The most effective conflict-resolution technique for creating a shared goal that cannot be attained without the cooperation of each of the conflicting parties is the establishment of superordinate goals.

Superordinate Goals(Answer B): Superordinate goals are overarching goals that are important to both parties in a conflict and require their cooperation to be achieved. These goals help conflicting parties to focus on common objectives and work together to achieve them, thereby reducing conflict and promoting collaboration​​.

Communication(Answer A): While communication is crucial in conflict resolution, it alone may not create a shared goal that necessitates cooperation.

Avoidance(Answer C): Avoidance is a passive approach that generally postpones the conflict rather than resolving it.

Authoritative Command(Answer D): This involves using authority to resolve the conflict, which may not create cooperation or shared goals among the parties.

A core job dimension in the Hackman and Oldham model of job design is autonomy.

Autonomy(Answer B): This refers to the degree to which a job gives an employee the freedom, independence, and discretion to schedule work and determine the procedures for carrying it out. It is a critical aspect that influences motivation and job satisfaction​​.

Compensation(Answer A) andNetworking(Answer D): These are not part of the core job dimensions in the Hackman and Oldham model.