EML - (Week 2)

36 flashcards · Psychology · by Meg b

1. The four stages in the life cycle of an organisation: B - birth G - growth D - decline D - death

2. Enthusiasm, innovative, small and flexible, intimacy and all4one and one4all are all terms that could be used to describe a company at the birth stage

3. Unstructured, uncertain, vulnerable, credible issues, inexperience and limited capital are terms to describe a company a the birthstage

4. As a theory of growth, Gibrat's law states that firm growth occurs in 'random shocks'

   There is no systematic determinants of firm growth

5. Gibrat's law works well for larger firms

   Age is also typically found to be correlated with growth rates

6. What are the types of growth presented graphically?

7. What does Penrose's theory explain?

   Sources and hazards of growth

8. Penrose suggests that firms grow as a result of efficiency generated through 'learning by doing'

9. Penrose suggests that as managers gain more experience, they become more efficient at what they do and take less time to do their tasks

   Freed-up managerial resources then go towards value-creating growth-inducing activities

10. Penrose stated that growth is limited by the amount of available managerial attention at ay period

11. Penrose states that too much focus by managers on expansion diverts attention from operating efficiency, increasing operating costs.

12. Above the optional growth rate, increases in growth will lead to higher operating costs

    due to low managerial attention

13. The Penrose Effect states that fast growing firms have higher operating costs than slower growing ones

14. Firms seek growth as employees may see better opportunities for their own growth, work is challenging but less boring and firms find it easier to maintain morale

15. What does Marris' Theory of 'Managerial' Capitalism explain?

    How the optimal point of growth is naturally determined

16. Managers and shareholders decided the management of firms

17. Managers aim at maximising growth rate while shareholders aim at maximising dividends and share prices

18. What does the Marris growth model balance?

    Growth rate and share prices

19. Marris' theory suggests that mangers re-invest profits for expansion to drive growth but this reduces dividends available for shareholders

20. Marris' theory suggests that continuous low dividend reduces share prices resulting in shareholders selling off shares which could result in take-over of the firm and manager job losses. So mangers pay dividends which limits the resources available for firm growth. But investors want balanced growth of the firm to ensure return on capital thus there is an optimal point for balanced growth

21. Growth challenges for manages include convincing the market, recruiting a team with an entrepreneurial sprit, raising capital and managing risks.

22. The Population Ecology Theory explains determinants of the rate or birth (and death) of new firms in a population of existing firms.

23. According to the Population Ecology model: resources dry up and are no longer lucrative existing firms stand tough against new entrants this regulates the size of the industry

24. What are potential sources of capital for growth?

25. Weitzel & Jonsson's 5 stages of decline are: B - blinded I - inaction F - faulty action C - crisis D - dissolution

26. Locke's goal setting theory states that having a goal improves performance

27. Locke & Latham's five goal setting principles are: C - clarity C - challenge C - commitment F - feedback T - task complexity

28. 'Do your best' is not a good goal as people give then the benefit of doubt in evaluating their performance

29. Belbin discovered nine clusters of behaviours called 'Team Roles'

    Most people will have two or three roles

30. 1 Tuckman group development sequence:Forming orientation, establishing relationships most members positive and polite

31. 2 Tuckman group development sequence: Storming conflit and polarisation around interpersonal issues

32. 3 Tuckman group development sequence: Norming resistance overcome and group feeling cohesive, new roles adopted, personal opinions expressed

33. 4 Tuckman group development sequence: Performing roles become flexible and functional, group energy channeled into task followed by adjourning

34. Drexler/Sibbet's team performance model includes: four stages to create the team three to describe increasing levels of performance

35. Drexler/Sibbet team performance model includes: O - orientation T - trust building G - goal clarification C - commitment I - implementation H - high performance R - renewal