Essential Leadership Concepts: Midterm Study Guide for MGMT 164
School
University of California, Los Angeles**We aren't endorsed by this school
Course
MGMT 164
Subject
Management
Date
Dec 12, 2024
Pages
14
Uploaded by MasterManateeMaster686
MGMT 164 Midterm Study GuideKey Concepts and DefinitionsAchievement Motive (Bolman)●Definition: Managers with a high achievement motive are driven by goals andchallenges. They seek to take responsibility, find solutions, master complex tasks, andmeet objectives.●Example: A manager may set personal performance goals or constantly look for ways toimprove team outcomes, showing a need to accomplish and succeed.Position Power●Definition: Power that comes from a person’s title or role within an organization,allowing them to influence others.●Example: A CEO or department head typically holds position power and can makedecisions that others in the organization follow.EQ Components (Goleman)●Self-awareness: Understanding one’s emotions, strengths, and weaknesses.●Self-management: Managing emotions and impulses effectively.●Social awareness: Empathy and understanding of others' feelings.●Social skills: Building healthy relationships and managing social interactions.●Context: High EQ helps leaders connect better with their teams, navigate conflict, andfoster a positive work environment.Social Intelligence (Goleman)●Definition: A set of interpersonal skills rooted in our neural makeup that enables us toconnect with others effectively.●Example: Leaders with high social intelligence can inspire and motivate teams byunderstanding social dynamics and emotional needs.Primal Leadership (Goleman)
●Definition: A leader’s emotional state impacts their team’s motivation and performance.●Primary Task: To manage their own emotions and create a positive emotional tonewithin the team.●Example: A calm and optimistic leader can uplift a team during stressful projects,whereas a stressed leader may unintentionally spread tension.Resonance (Goleman)●Definition: The harmony between a leader and their team, where the leader is “in tune”with team emotions.●Challenge: Many leaders don’t realize when they lack resonance, leading tomisalignment with their team’s morale or needs.5 Steps Toward EQ (Goleman)1.Ideal Self- Visualize your best version as a leader.2.Real Self- Recognize where you currently stand.3.Bridge Gap- Develop an improvement plan.4.Practice- Actively work on self-improvement.5.Community- Build a support network.Networking ConceptsOPS Networks (Ibarra & Hunter)●Operational: Task-oriented relationships for daily functions.●Personal: Connections outside work for growth and support (e.g., alumni groups).●Strategic: Networks that help achieve long-term goals and influence beyond theorganization.Network Building (Cross & Thomas)●ADDC Steps:○Analyzecurrent network for strengths/weaknesses.○De-layerunnecessary connections.○Diversifyconnections for different perspectives.○Capitalizeon strong relationships.Crowd Clover Roles
●Promoters: Amplify your work.●Enablers: Provide resources or support.●Connectors: Link to valuable people or resources.●Catalysts: Push personal or professional growth.Common Networking Pitfalls (Cross)●The Formalist: Relying too much on official structure, missing informal connections.●The Superficial Networker: Networking broadly but without depth in relationships.●The Chameleon: Adapting too much, losing authenticity.Open Leadership (Li)Definition●The ability to let go of control while inspiring team commitment and productivity.Core Objectives1.Learn: Gain insights across ranks.2.Dialogue: Enable open communication.3.Support: Provide consistent help.4.Innovate: Drive change through collaboration.Open Leader Archetypes●Realist Optimist: Balanced and pragmatic.●Transparent Evangelist: Open, enthusiastic, and collaborative.Power and Influence (Bolman)Types of Power1.Position Power: Authority based on role.2.Reward Power: Influence via rewards.3.Expertise Power: Influence from knowledge.4.Coercive Power: Influence through consequences.
5.Framing Power: Using language to shape others' perceptions.6.Personal Power: Influence via charisma.Socialized vs. Personal Power Seekers (McClelland & Burnham)●Socialized Power Seekers: Use power to benefit the team.●Personal Power Seekers: Use power for personal gain, often leading to negativeorganizational impact.Key Leadership Theories and StrategiesCreative Tension (Simons)●Definition: A discomfort that encourages innovation, driven by pressure or challenges.●Example: Facing tight deadlines often forces teams to think creatively and improveefficiency.Sensemaking (Gallos)●Definition: The process of interpreting experiences and creating meaning.●Example: In times of crisis, leaders who can make sense of chaos help stabilize teams.Organizational Frames (Bolman)●Machine (Structural): Orgs as systems for efficiency (e.g., factories).●Family (HR): Orgs as entities meeting human needs.●Jungle (Politics): Power struggles and competition within the org.●Theater (Symbolic): Emphasizing culture, rituals, and organizational identity.Articles and Case StudiesGallos - Leadership and Frameworks●Discusses reframing organizations by looking at them from multiple perspectives,enhancing flexibility and adaptability.Kotter - What Leaders Really Do
●Leaders: Set direction, align people, and motivate.●Managers: Plan, organize, and control, focusing on stability and efficiency.Goleman - Leadership Styles●Affiliative: Builds harmony and bonds.●Authoritative: Vision-driven, self-confident.●Coaching: Focuses on personal development.●Coercive: Demands immediate compliance, suited for crises.●Democratic: Values team input and collaboration.●Pacesetting: Sets high standards but can cause burnout.Leadership and Motivation (Kotter, Haidt, Salovey & Mayer)Kotter’s Leadership Theory●Leaders: Lead during times of change, focusing on three core tasks (SAM):○Set a direction: Establish a clear vision.○Assign roles: Organize teams to achieve goals.○Motivate: Inspire and engage people to act.●Managers: Manage complexity by maintaining order and stability in daily operations(POC):○Planning & Budgeting: Setting plans and budgets.○Organizing & Staffing: Structuring the team.○Controlling & Problem-solving: Ensuring plans are executed effectively.Basic Human Needs for Leaders to Address (Kotter)●Belonging: Creating a sense of team connection.●Achievement: Providing opportunities for success.●Recognition: Acknowledging accomplishments.●Self-Esteem: Supporting individual confidence.●Control: Giving people influence over their work.Rider & Elephant (Haidt)●Rider: Represents the analytical, conscious mind (rational, planned).●Elephant: The emotional, intuitive, and subconscious side (impulsive, gut reactions).
○Context: Effective leaders address both the logical (Rider) and emotional(Elephant) needs of their team. For instance, providing a vision appeals to theRider, while addressing team morale speaks to the Elephant.Emotional Intelligence (Salovey & Mayer)●Definition: EQ is the ability to monitor emotions, understand them, and use thatunderstanding to guide thought and action.●PUUM Model:○Perceiving Emotions: Recognizing emotions in oneself and others.○Using Emotions: Integrating emotions into thinking and decision-making.○Understanding Emotions: Comprehending emotional language and signals.○Managing Emotions: Regulating emotions to improve personal and socialwell-being.○Example: In stressful situations, leaders with high EQ remain calm and helpsoothe their teams.Social and Cultural Intelligence (Goleman, Nye, Crowne, Earley& Mosakowski)Seven SQ Competencies (Goleman)1.Attunement: Listening and tuning in to others' emotions.2.Awareness: Being socially aware and perceptive.3.Influence: Inspiring others to act.4.Inspiration: Motivating others with a shared vision.5.Developing Others: Supporting growth in others.6.Empathy: Understanding others’ feelings.7.Teamwork: Building collaboration and cohesion.○Example: A team-oriented leader who actively listens, acknowledgescontributions, and empowers team members to perform at their best.Cultural Intelligence (CQ) Sources1.Cognitive: Learning about other cultures’ norms and practices.2.Physical: Adapting behavior to different cultural settings.3.Emotional: Developing resilience and adaptability in diverse environments.
○Example: A leader relocating to a foreign office learns cultural nuances(cognitive), adopts respectful local greetings (physical), and remains open tolearning through challenges (emotional).Contextual Intelligence (Joseph Nye)●Definition: The ability to adjust tactics based on situational awareness and alignstrategies accordingly.●Example: In a fast-changing market, a leader with contextual intelligence may shiftresources toward innovation to stay competitive.Power and Influence (Bolman, Pfeffer, Bolman & Deal)Types of Power (Bolman)1.Position Power: Authority from one’s role (e.g., manager).2.Reward Power: Ability to grant rewards (e.g., promotions).3.Expertise Power: Influence from specialized knowledge.4.Reputational Power: Influence from credibility and a strong track record.5.Coercive Power: Power through threats or consequences.6.Network Power: Leverage from social or professional connections.7.Agenda Power: Control over what gets prioritized.8.Personal Power: Charisma and personal influence.9.Framing Power: Shaping how others perceive issues through language.○Example: A leader with network power might quickly mobilize resources byleveraging connections across departments.Bolman’s Political Steps for Managers1.Set agenda: Define priorities.2.Map political terrain: Understand key players and their interests.3.Network coalitions: Build alliances.4.Bargain: Negotiate and compromise to achieve goals.Pfeffer’s Reasons People Avoid Power1.Leadership fallacies: Misconceptions about power’s benefits.2.Self-sabotage: Underestimating their potential impact.3.Belief in a just world: Assuming rewards will come without advocating for oneself.
Effective Networking (Cross & Thomas, Li)Networking Types (Ibarra & Hunter)●Operational: Focused on completing tasks within the organization.●Personal: Grows external connections for personal/professional development.●Strategic: Builds connections to influence organizational goals.Cross’s Recommendations for Network Improvement1.Analyze: Evaluate existing connections.2.De-layer: Remove unhelpful relationships.3.Diversify: Expand with new, varied connections.4.Capitalize: Strengthen and use valuable relationships.○Example: A manager building a strategic network may join industry forums toconnect with potential partners and mentors.Open Leadership (Li)●Definition: Leading by empowering others while letting go of control, fostering opencommunication.●Example: In the Goldcorp Challenge, leaders shared confidential information to inspireinnovation, demonstrating trust and openness.Organizational Frames and Structures (Bolman & Deal, Gallos)Four Organizational Frames (Bolman)1.Structural (Machine): Focus on efficiency, systems, and roles.2.Human Resources (Family): Emphasizes aligning organizational goals with individualneeds.3.Political (Jungle): Views organizations as arenas of power struggles and scarceresources.4.Symbolic (Theater): Organizations as cultures with rituals, values, and identities.○Example: A manager using the Human Resources frame might focus onemployee development, while a Political frame might highlight negotiatingresources.
Reframing Organizations (Gallos)●Definition: Applying different frames or perspectives to understand and address complexissues, which increases flexibility.●Example: When facing a conflict, a leader might switch between structural and politicalframes to find a balanced solution.Decision-Making and Conflict (Heffron, Cyert & March, Fisher& Ury)Types of Conflict●Horizontal Conflict: Between departments or teams.●Vertical Conflict: Between different levels of hierarchy.●Cultural Conflict: Stemming from differing values or norms.○Example: Horizontal conflict might occur between the sales and productionteams if production delays affect sales targets.Principled Bargaining (Fisher & Ury)1.Separate people from problems: Maintain respect while addressing issues.2.Focus on interests, not positions: Find common ground.3.Create options for mutual gain: Seek win-win solutions.4.Insist on objective criteria: Base decisions on fair standards.○Example: Two managers negotiating a budget could agree on shared objectives,rather than competing for limited funds.Leadership Styles and Theories (Goleman, Kotter, Haidt)Six Leadership Styles (Goleman)1.Affiliative: Builds emotional bonds.2.Authoritative: Provides vision and direction.3.Coaching: Develops long-term strengths.4.Coercive: Demands immediate compliance (best for crises).5.Democratic: Fosters collaboration and team input.
6.Pacesetting: Sets high standards, often causing burnout if overused.○Example: In a high-stakes project, a coercive style may be necessary, while acoaching style may be better for long-term team development.Key Leader Characteristics (Kotter)●Set Direction: Articulate clear goals.●Align People: Ensure team members are on board.●Motivate: Inspire commitment and engagement.Goleman’s Mood Contagion●Definition: A leader’s mood impacts the organization’s overall culture and performance.●Example: An optimistic leader fosters a positive, resilient team, while a stressed leadermay unintentionally spread tension.Financial RatiosLiquidity Ratios●Purpose: Measure a firm’s ability to meet short-term obligations.○Working Capital= Current Assets - Current Liabilities■Negative working capital suggests short-term challenges, though largebusinesses may have generous credit terms.○Current Ratio= Current Assets / Current Liabilities■< 1: Potential distress.■> 1: Assures creditors of payment capability.○Quick Ratio (Acid Test): Excludes certain assets for stricter liquidity measure.Activity Ratios●Accounts Receivable Turnover= Credit Sales / Average Net Accounts Receivable○Average Collection Period= 365 / A/R Turnover○Higher turnover implies faster collections.●Inventory Turnover= COGS / ((Beginning Inventory + Ending Inventory) / 2)○Measures how quickly inventory turns into COGS.●Asset Turnover= Net Revenue / Average Total Assets○Indicates efficiency in using assets to generate revenue.
Leverage Ratios●Debt-to-Total Assets Ratio= Total Liabilities / Total Assets○Shows what portion of assets creditors own.●Times Interest Earned= Operating Income / Interest○< 1 or 2: Indicates potential distress;5-7: Healthier coverage.Profitability Ratios●Gross Margin= Gross Profit / Sales●Operating Profit Margin= Operating Income / Sales●Net Profit Margin= Net Income / Sales●Return on Assets (ROA)= Net Income / Average Total Assets●Return on Equity (ROE)= Net Income / Average EquityIncome and ExpensesOperating Expenses●Definition: Non-production-related expenses (e.g., admin, salaries, rent).Cost of Goods Sold (COGS) / Direct Costs●Includes direct labor, materials, and sales commissions.Depreciation & Amortization●Depreciation: Allocates cost of tangible assets over their useful life.●Amortization: Similar, but for intangible assets.●Both are non-cash expenses that affect net income.Net Income Retention●Dividends and Retained Earnings: Net income may be distributed or retained to buildequity.Financial Statements
Pro Forma Financial Statements1.Income Statement: Projects future revenue, expenses, and net income.2.Balance Sheet: Shows assets, liabilities, and equity.3.Cash Flow Statement: Divides into operating, investing, and financing activities.Cash Flow Analysis●Free Cash Flow: Operating Cash Flow - Cash Flow used for Investing.●Positive Cash Flow: Indicates healthy financing options and growth potential.●Negative Cash Flow: May necessitate capital raising or debt.Working Capital ManagementCash Management●Goals include maintaining adequate cash, achieving positive cash flow, and maximizingreturns on idle cash.Accounts Receivable Management●Monitors credit offered and collection efficiency.●Average Collection Periodcalculated using A/R Turnover.Inventory Management●Balance between minimizing inventory for cash flow and meeting demand.○Inventory Categories: Raw materials, work-in-process, finished goods.Accounts Payable and Accrued Liabilities●Accounts Payable: Vendor credit purchases.●Accrued Liabilities: Obligations like payroll, taxes, often leading to financial challenges.Capital Structure and FinancingSources of Capital
●Bootstrapping: Using personal resources or generating funds through sales and creditterms.●Borrowing: Bank loans, credit cards, bonds.●Equity Financing: Issuing stock to investors (preferred, common, convertible debt).Convertible Debt and Bridge Financing●Convertible debt allows lender conversion to equity; bridge loans are temporary untillonger-term financing is secured.Preferred Stock●Often provides dividends before common stock and may include conversion options.Valuation and Breakeven AnalysisBreakeven Analysis●Determines minimum revenue to cover costs.○Breakeven Units= Total Fixed Costs / (Price - Variable Cost per Unit).Valuation Methods1.Discounted Cash Flow (DCF): Projects future cash flows discounted to present value.2.Comparison of Multiples/Ratios: Uses financial performance ratios to estimate value.3.Rate of Return: Calculation using dividends and share price appreciation.Key Metrics●Equity Value: Market Cap = Price per Share x Shares Outstanding.●Enterprise Value (EV)= Market Cap + Debt - Cash.●Useful Ratios: EV/Revenue, EV/EBITDA.Stock-Based CompensationTypes of Plans
●Restricted Stock: Shares granted but restricted.●RSUs: Right to receive shares post-vesting.●Stock Options: Purchase rights at a fixed price.●Stock Appreciation Rights: Cash or stock based on share price increase.Dilution Considerations●Dilution impacts earnings per share and ownership percentages.Exit StrategiesCash Harvest Options1.Capital Gain: Profit from selling assets or shares.2.Dividends and Buybacks: Returns capital to shareholders.3.Mergers and Acquisitions: Selling to other entities for potential capital gains.Valuation and Capital Raising●Investors evaluate pro forma financials, return potential, and strategic position to decideon investment.