1
BOH4M Exam Review Notes
BOH
4M
Final
Reference: Summary from textbook: Management Fundaments: Schermerhorne
CHAPTER 1: INTRODUCTION TO MANAGEMENT
Study Question 1: What are the challenges of working in the new economy?







Today’s turbulent environment challenges everyone to understand and embrace continuous
change and developments in a new information-driven and global economy.
Work in the new economy is increasingly knowledge based, and people, with their capacity to
bring valuable intellectual capital to the workplace, are the ultimate foundation of
organizational performance.
The forces of globalization are bringing increased interdependencies among nations and
economies as customer markets and resource flows create intense business competition.
Ever-present developments in information technology and the continued expansion of the
Internet are reshaping organizations, changing the nature of work, and increasing the value of
people capable of performing as knowledge workers.
Organizations must value the talents and capabilities of a workforce whose members are
increasingly diverse with respect to gender, age, race and ethnicity, able-bodiedness, and
lifestyles.
Society has high expectations for organizations and their members to perform with commitment
to high ethical standards and in socially responsible ways, including protection of the natural
environment and human rights.
Careers in the new economy require great personal initiative to build and maintain skill
“portfolios” that are always up-to-date and valuable to employers challenged by the intense
competition and the information age.
Study Question 2: What are organizations like in the new workplace?





Organizations are collections of people working together to achieve a common purpose.
As open systems, organizations interact with their environments in the process of transforming
resource inputs into product outputs.
Productivity is a measure of the quantity and quality of work performance, with resource
utilization taken into account.
High performing organizations are both effective, in terms of goal accomplishment, and
efficient, in terms of resource utilization.
Organizations today emphasize total quality management in the context of technology
utilization, empowerment and teamwork, and concern for work-life balance, among other
trends.
Study Question 3: Who are managers and what do they do?


Managers directly support and facilitate the work efforts of other people in organizations.
Top managers scan the environment, create vision, and emphasize long-term performance
goals; middle managers coordinate activities in large departments or divisions; team leaders and
supervisors support performance at the team or work-unit level.
1|Page
2
BOH4M Exam Review Notes




Functional managers work in specific areas such as finance or marketing; general managers are
responsible for larger multi-functional units; administrators are managers in public or nonprofit
organizations.
Managers are held accountable for performance results that the manager depends on other
persons to accomplish.
The upside-down pyramid view of organizations shows operating workers at the top serving
customer needs while being supported from below by various levels of management.
The changing nature of managerial work emphasizes being good at “coaching” and “supporting”
others, rather than simply “directing” and “order-giving.”
Study Question 4: What is the management process?





The management process consists of the four functions of planning, organizing, leading, and
controlling.
Planning sets the direction; organizing assembles the human and material resources; leading
provides the enthusiasm and direction; controlling ensures results.
Managers implement the four functions in daily work that is intense and stressful, involving long
hours and continuous performance pressures.
Managerial success in this demanding context requires the ability to perform well in
interpersonal, informational, and decision-making roles.
Managerial success also requires the ability to utilize interpersonal networks to accomplish wellselected task agendas.
Study Question 5: How do you learn the essential managerial skills and competencies?




Careers in the new economy demand continual attention to life-long learning from all aspects of
daily experience and job opportunities.
Skills considered essential for managers are broadly described as technical –– ability to use
expertise; human –– ability to work well with other people; and conceptual –– ability to analyze
and solve complex problems.
Skills and outcomes considered as foundations for managerial success include communication,
teamwork, self-management, leadership, critical thinking, and professionalism.
Management fundamentalsfocuses attention on building your career potential through
understanding the practical implications of important concepts and theories.
CHAPTER 2: MANAGEMENT THEORY
Study Question 1: What can be learned from classical management thinking?



Frederick Taylor’s four principles of scientific management focused on the need to carefully
select, train, and support workers for individual task performance.
Henri Fayol suggested that managers should be trained to take on the responsibilities now
known as the management functions of planning, organizing, leading, and controlling.
Max Weber described bureaucracy with its clear hierarchy, formal rules, and well-defined jobs
as an ideal form of organization.
Study Question 2: What ideas were introduced by the human resource approaches?


The human resource or behavioural approaches shifted attention toward the human factor as a
key element of organizational performance.
The historic Hawthorne studies suggested that work behaviour is influenced by social and
psychological forces and that work performance may be improved by better “human relations.”
2|Page
3
BOH4M Exam Review Notes



Abraham Maslow’s hierarchy of human needs introduced the concept of self-actualization and
the potential for people to experience self-fulfillment in their work.
Douglas McGregor urged managers to shift away from Theory X and toward Theory Y thinking,
which views people as independent, responsible, and capable of self-direction in their work.
Chris Argyris pointed out that people in the workplace are adults and may react negatively when
constrained by strict management and rigid organizational structures.
Study Question 3: What is the role of quantitative analysis in management?



The availability of high-power desktop computing provides new opportunities for mathematical
methods to be used for problem solving.
Many organizations employ staff specialists who apply their expertise in quantitative
management science and operations research.
Quantitative techniques used by managers include forecasting, linear programming, and
simulation, among others.
Study Question 4: What is unique about the systems view and contingency thinking?




Organizations are complex open systems that interact with their external environments to
transform resource inputs into product outputs.
Resource acquisition and customer satisfaction are important requirements in the organizationenvironment relationship.
Organizations are composed of many internal subsystems that must work together in a
coordinated way to support the organization’s overall success.
Contingency thinking avoids “one best way” arguments, recognizing the need to understand
situational differences and respond appropriately to them.
Study Question 5: What are the continuing management themes of the 21st century?




The commitment to meet customer needs guides organizations toward total quality
management and continuous improvement of operations.
Interest in Japanese management practices illustrates the opportunities to learn new ways of
managing from practices in other countries.
Changing times place great value on learning organizations, ones that are able to continually
learn and adapt themselves to changing circumstances.
New managers must accept and excel at 21st century leadership responsibilities to perform as
global strategists, technology masters, sensitive politicians, leader/motivators, and ethical role
models.
CHAPTER 3: ETHICS
Study Question 1: What is ethical behaviour?





Ethical behaviour is that which is accepted as “good” or “right” as opposed to “bad” or “wrong.”
Simply because an action is not illegal does not necessarily make it ethical in a given situation.
Because values vary, the question of “What is ethical behaviour?” may be answered differently
by different people.
Four ways of thinking about ethical behaviour are the utilitarian, individualism, moral-rights, and
justice views.
Cultural relativism argues that no culture is ethically superior to any other.
Study Question 2:How do ethical dilemmas complicate the workplace?
3|Page
4
BOH4M Exam Review Notes




When managers act ethically they have a positive impact on other people in the workplace and
on the social good performed by organizations.
An ethical dilemma occurs when someone must decide whether to pursue a course of action
that, although offering the potential of personal or organizational benefit or both, may be
considered potentially unethical.
Managers report that their ethical dilemmas often involve conflicts with superiors, customers,
and subordinates over such matters as dishonesty in advertising and communications as well as
pressure from their bosses to do unethical things.
Common rationalizations for unethical behaviour include believing the behaviour is not illegal, is
in everyone’s best interests, will never be noticed, or will be supported by the organization.
Study Question 3: How can high ethical standards be maintained?




Ethics training in the form of courses and training programs helps people better deal with
ethical dilemmas in the workplace.
Whistleblowers expose the unethical acts of others in organizations, even while facing career
risks for doing so.
Top management sets an ethical tone for the organization as a whole, and all managers are
responsible for acting as positive models of appropriate ethical behaviour.
Written codes of ethical conduct formally state what an organization expects of its employees
regarding ethical conduct at work.
Study Question 4: What is corporate social responsibility?



Corporate social responsibility is an obligation of the organization to act in ways that serve both
its own interests and the interests of its many external publics, often called stakeholders.
Criteria for evaluating corporate social performance include economic, legal, ethical, and
discretionary responsibilities.
Corporate strategies in response to social demands include obstruction, defence,
accommodation, and pro-action, with more progressive organizations taking proactive stances.
Study Question 5: How do organizations and governments work together in society?




Government agencies are charged with monitoring and ensuring compliance with the mandates
of law.
Managers must be well informed about existing and pending legislation in a variety of social
responsibility areas, including environmental protection and other quality-of-life concerns.
Organizations exert their influence on government in many ways, including interpersonal
contacts of executives, use of lobbyists, and financial contributions to PACs.
All managerial decisions and actions in every workplace should fulfill performance accountability
with commitments to high ethical standards and socially responsible means.
CHAPTER 9: STRATEGY
Study Question 1: What are the foundations of strategic competitiveness?




Competitive advantage is achieved by operating in ways difficult for competitors to imitate.
A strategy is a comprehensive plan that sets long-term direction and guides resource allocation
to achieve sustainable competitive advantage.
Strategic intent directs organizational resources and energies toward a compelling goal.
The strategic goals of a business should include superior profitability and the generation of
above-average returns for investors.
Study Question 2: What is the strategic management process?
4|Page
5
BOH4M Exam Review Notes




Strategic management is the process of formulating and implementing strategies that achieve
organizational goals in a competitive environment.
The strategic management process begins with analysis of mission, clarification of core values,
and identification of objectives.
A SWOT analysis systematically assesses organizational resources and capabilities and
industry/environmental opportunities and threats.
Porter’s five forces model analyzes industry attractiveness in terms of competitors, new
entrants, substitute products, and the bargaining power of suppliers and buyers.
Study Question 3: What types of strategies are used by organizations?




Corporate strategy sets direction for an entire organization; business strategy sets direction for
a business division or product/service line; functional strategy sets direction for the operational
support of business and corporate strategies.
The grand or master strategies used by organizations include growth ––pursuing expansion
through concentration and diversification; they also include retrenchment –– pursuing ways to
scale back operations through restructuring and divestiture.
Global strategies take advantage of international business opportunities; cooperative strategies,
such as international joint ventures, use strategic alliances for performance gains.
E-business strategies use IT and the Internet to pursue competitive advantage.
Study Question 4: How are strategies formulated?




The three options of Porter’s model of competitive strategy are: differentiation –– distinguishing
one’s products from the competition; cost leadership –– minimizing costs relative to the
competition; and focus –– concentrating on a special market segment.
The BCG matrix is a portfolio planning approach that classifies businesses or product lines as
“stars,” “cash cows,” “question marks,” or “dogs.”
The adaptive model focuses on the congruence of prospector, defender, analyzer, or reactor
strategies with demands of the external environment.
The incremental or emergent model recognizes that many strategies are formulated and
implemented incrementally over time.
Study Question 5: What are current issues in strategy implementation?





Management practices and systems –– including the functions of planning, organizing, leading,
and controlling –– must be mobilized to support strategy implementation.
Pitfalls that inhibit strategy implementation include failures of substance  such as poor
analysis of the environment, and failures of process  such as lack of participation in the
planning process.
Boards of directors play important roles in corporate governance, monitoring top management,
and organizational strategies and performance.
Strategic leadership inspires the process of continuous evaluation and improvement of
strategies and their implementation.
Success in strategic leadership requires the abilities to manage trade-offs in resource
allocations, maintain a sense of urgency in strategy implementation, and effectively
communicate the strategy to key constituencies.
5|Page
6
BOH4M Exam Review Notes

CHAPTER 13: LEADERSHIP
Study Question 1: What is the nature of leadership?






Leadership is the process of inspiring others to work hard to accomplish important tasks.
The ability to communicate a vision, a clear sense of the future, is increasingly considered to be
an essential ingredient of effective leadership.
Power is the ability to get others to do what you want them to do through leadership.
Managerial power equals position power plus personal power.
Sources of position power include rewards, coercion, and legitimacy or formal authority; sources
of personal power include expertise and reference.
Effective leaders empower others –– that is, they help and allow others to take action and make
job-related decisions on their own.
Study Question 2: What are the important leadership traits and behaviours?




Early leadership research searched unsuccessfully for a set of personal traits that would always
differentiate successful and unsuccessful leaders.
Traits that seem to have a positive impact on leadership include drive, integrity, and selfconfidence.
Research on leader behaviours focused on alternative leadership styles based on concerns for
task and concerns for people.
One suggestion of leader-behaviour researchers is that effective leaders will be good at teambased or participative leadership that is high in both task and people concerns.
Study Question 3: What are the contingency theories of leadership?





Contingency leadership approaches point out that no one leadership style always works best;
rather, the best style is one that properly matches the demands of each unique situation.
Fiedler’s contingency theory describes how situational differences in task structure, position
power, and leader-member relations may influence which leadership style works best.
House’s path-goal theory points out that leaders should add value to situations by responding
with supportive, directive, achievement-oriented, and/or participative styles as needed.
The Hersey-Blanchard situational model recommends using task-oriented and people-oriented
behaviours, depending upon the “maturity” of followers.
The Vroom-Jago leader-participation theory advises leaders to choose decision-making methods
–– individual, consultative, or group –– that best fit the problems they are trying to resolve.
Study Question 4: What is transformational leadership?



Charismatic leadership creates a truly inspirational relationship between leader and followers.
Transactional leadership focuses on tasks, rewards, and structures to influence follower
behaviour.
Transformational leaders use charisma and related qualities to inspire extraordinary efforts in
support of change and performance excellence.
Study Question 5: What are current issues in leadership development?


Emotional intelligence, the ability to manage our relationships and ourselves effectively, is an
important leadership capability.
The interactive leadership style often associated with women emphasizes communication,
involvement, and interpersonal respect, all things consistent with the demands of the new
workplace.
6|Page
7
BOH4M Exam Review Notes

Drucker and others remind us leadership is “hard work” that always requires a personal
commitment to meet the highest ethical and moral standards.
CHAPTER 12: HUMAN RESOURCES
Study Question 1: Why do people make the difference?




Even in this age of information, high technology, and globalization, people are irreplaceable
assets that make organizations work.
Organizations with positive human resource policies and practices are gaining significant
performance advantages.
The challenges of complexity and uncertainty in highly competitive environments are best met
by a diverse and talented workforce.
The diversity advantage is only gained when the talents of all persons, regardless of personal
characteristics, are respected and given the opportunity to be displayed.
Study Question 2: What is strategic human resource management?





The human resource management process is the process of attracting, developing, and
maintaining a quality workforce.
Human resource management becomes strategic when it is integrated into the organization’s
strategic leadership.
Human resource management is influenced by a complex and changing legal environment.
Equal employment opportunity guarantees people the right to employment and advancement
without discrimination.
Current legal issues in HRM include sexual harassment, comparable worth, rights of
independent contractors, and employee privacy.
Study Question 3: How do organizations attract a quality workforce?





Human resource planning is the process of analyzing staffing needs and identifying actions to
satisfy those needs over time.
The purpose of human resource planning is to make sure the organization always has people
with the right abilities available to do the required work.
Recruitment is the process of attracting qualified job candidates to fill vacant positions.
Realistic job previews provide candidates with accurate information on the job and organization.
Managers use interviews, employment tests, and references to help make selection decisions;
the use of assessment centers and work sampling is becoming more common.
Study Question 4: How do organizations develop a quality workforce?




Orientation is the process of formally introducing new hires to their jobs, performance
requirements, and the organization.
On-the-job training includes job rotation, coaching, modeling, and mentoring; off-the-job
training includes formal programs such as management development courses.
Performance management systems establish work standards and the means for assessing
performance results.
Common performance appraisal methods are graphic rating scales, behaviourally anchored
rating scales, critical incidents, and multiperson comparisons.

Study Question 5: How do organizations maintain a quality workforce?

Career planning systematically matches individual career goals and capabilities with
opportunities for their fulfillment.
7|Page
8
BOH4M Exam Review Notes




Programs that address work-life balance and the complex demands of job and family
responsibilities are increasingly important in human resource management.
Compensation and benefits packages must be continually updated so the organization stays
competitive in labour markets.
Whenever workers must be replaced through promotions, transfers, retirements, and
terminations, the goal should be to treat everyone fairly while ensuring that remaining jobs are
filled with the best personnel available.
In collective bargaining situations, labour-management relations should be positively
approached and handled with all due consideration of applicable laws.
CHAPTER 14 MOTIVATION
Study Question 1: What is motivation?




Motivation involves the level, direction, and persistence of effort expended at work; simply put,
a highly motivated person works hard.
Extrinsic rewards are given by another person; intrinsic rewards derive naturally from the work
itself.
To maximize the motivational impact of rewards, they should be allocated in ways that respond
to individual needs.
The three major types of motivation theories are the content, process, and reinforcement
theories.
Study Question 2: What are the different types of individual needs?




Maslow’s hierarchy of human needs suggests a progression from lower-order physiological,
safety, and social needs to higher-order ego and self-actualization needs.
Alderfer’s ERG theory identifies existence, relatedness, and growth needs.
Herzberg’s two-factor theory points out the importance of both job content and job context to
motivation and performance.
McClelland’s acquired-needs theory identifies the needs for achievement, affiliation, and power,
all of which may influence what a person desires from work.
Study Question 3: What are the process theories of motivation?





Adam’s equity theory recognizes that social comparisons take place when rewards are
distributed in the workplace.
People who feel inequitably treated are motivated to act in ways that reduce the sense of
inequity; perceived negative inequity may result in someone working less hard in the future.
Vroom’s expectancy theory states that Motivation = Expectancy x Instrumentality x Valence.
Expectancy theory encourages managers to make sure that any rewards offered for
motivational purposes are achievable, predictable, and individually valued.
Locke’s goal-setting theory emphasizes the motivational power of goals; task goals are specific
rather than ambiguous, difficult but achievable, and set through participatory means.
Study Question 4: What role does reinforcement play in motivation?



Reinforcement theory recognizes that human behaviour is influenced by its environmental
consequences.
The law of effect states that behaviour followed by a pleasant consequence is likely to be
repeated; behaviour followed by an unpleasant consequence is unlikely to be repeated.
Reinforcement strategies used by managers include positive reinforcement, negative
reinforcement, punishment, and extinction.
8|Page
9
BOH4M Exam Review Notes

Positive reinforcement works best when applied according to the laws of contingent and
immediate reinforcement.
Study Question 5: What are the challenges of motivation in the new workplace?




The insights of content, process, and reinforcement theories can be integrated in a model of
motivational dynamics.
Merit pay plans tie pay increases to performance accomplishments.
Incentive compensation programs, such as bonuses, gain sharing and profit sharing, allow
workers to benefit materially from improvements in profits and productivity.
Pay-for-knowledge systems link pay to the mastery of job-relevant skills.
CHAPTER 16: TEAMWORK (see class notes since I used my own notes for
this chapter) – effective teamwork and decision making
Study Question 1: How do teams contribute to organizations?





A team is a collection of people who work together to accomplish a common goal.
Organizations operate as interlocking networks of formal work groups, which offer many
benefits to the organizations and to their members.
Teams help organizations through synergy in task performance, the creation of a whole that is
greater than the sum of its parts.
Teams help satisfy important needs for their members, providing various types of support and
social satisfactions.
Social loafing and other problems can limit the performance of teams.
Study Question 2: What are current trends in the use of teams?







Teams are important mechanisms of empowerment and participation in the workplace.
Committees and task forces are used to facilitate operations and allow special projects to be
completed with creativity.
Cross-functional teams bring members together from different departments and help improve
lateral relations and integration in organizations.
Employee involvement teams, such as the quality circle, allow employees to provide important
insights into daily problem solving.
New developments in information technology are making virtual teams, or computer-mediated
teams, more commonplace.
Self-managing teams are changing organizations by allowing team members to perform many
tasks previously reserved for their supervisors.
Effective teams make use of alternative communication networks to best complete tasks.
Study Question 4: How do teams make decisions?




Teams can make decisions by lack of response, authority rule, minority rule, majority rule,
consensus, and unanimity.
The potential advantages of group decision making include having more information available
and generating more understanding and commitment.
The potential liabilities to group decision making include social pressures to conform and
greater time requirements.
Groupthink is a tendency of members of highly cohesive teams to lose their critical evaluative
capabilities and make poor decisions.
9|Page
10
BOH4M Exam Review Notes

Techniques for improving creativity in team decision making include brainstorming and the
nominal group technique.
Study Question 5: What are the challenges of leading high-performance teams?



Team building helps team members develop action plans for improving the way they work
together and the results they accomplish.
The team-building process should be data based and collaborative, involving a high level of
participation by all team members.
High-performance work teams have a clear and shared sense of purpose as well as strong
internal commitment to its accomplishment.
10 | P a g e