Principles of Management – Final Exam Study Guide
Chapters 9–12 + Appendix B
CHAPTER 9 – MOTIVATION
Intrinsic vs. Extrinsic Motivation
Intrinsic motivation comes from within the individual, such as
enjoyment or personal satisfaction.
Extrinsic motivation comes from outside, like pay, bonuses, or praise.
Vroom’s Expectancy Theory (M = E x I x V)
Motivation (M) depends on Expectancy (belief effort leads to
performance), Instrumentality (belief performance leads to outcomes),
and Valence (value of the outcomes).
All three components must be present for motivation to be high.
Maslow’s Hierarchy of Needs
A five-level model: physiological, safety, love/belonging, esteem, and
self-actualization.
People are motivated to fulfill basic needs before moving to higher
levels.
Herzberg’s Two-Factor Theory
Hygiene factors (salary, work conditions) prevent dissatisfaction but
don’t motivate.
Motivators (achievement, recognition) truly increase satisfaction and
motivation.
McClelland’s Theory of Needs
Focuses on three needs:
1. Achievement
2. Affiliation
3. Power
Managers should tailor motivation strategies to an individual's
dominant need.
Equity Theory
People compare their job inputs and outcomes to others.
If they perceive inequity, they may reduce effort, ask for a raise, or
quit.
Operant Conditioning
Uses rewards and punishments to shape behavior.
Includes positive reinforcement, negative reinforcement, punishment,
and extinction.
Scanlon Plan
A gainsharing incentive plan where employees receive bonuses for
cost-saving ideas.
Encourages teamwork and efficiency.
CHAPTER 10 – LEADERSHIP
Definition of Leadership
The ability to influence and motivate people to work toward
organizational goals.
Power vs. Authority
Power is the ability to influence others.
Authority is the legal right to make decisions and command resources.
Empowerment
Giving employees the authority and responsibility to make decisions on
their own.
Trait Theories
Suggest leaders are born with specific traits such as confidence,
intelligence, and sociability.
Behavioral Theories
Focus on what leaders do, not who they are. Includes task-oriented vs.
people-oriented behaviors.
Contingency Theories
Leadership effectiveness depends on how well a leader's style fits the
situation.
Fiedler’s LPC Theory
Leaders are either task-oriented or relationship-oriented.
Match the leader's style to the situation for effectiveness.
Transactional vs. Transformational Leadership
Transactional leaders focus on structure, rewards, and performance.
Transformational leaders inspire and motivate followers to exceed
expectations.
Charisma
A personal trait that allows leaders to inspire devotion and enthusiasm.
CHAPTER 11 – TEAM MANAGEMENT
Synergy
The idea that a group’s combined efforts produce a better outcome
than individuals working separately.
Cross-Functional Teams
Groups made up of employees from different departments to solve
complex problems.
Formal vs. Informal Groups
Formal groups are created by managers (e.g., departments, teams).
Informal groups form naturally among employees (e.g., lunch groups).
Groupthink
When a group prioritizes harmony and consensus over critical thinking,
often leading to poor decisions.
Command Groups
Consist of a manager and their subordinates; part of the formal
structure.
Task Force
A temporary group formed to solve a specific issue or problem.
Self-Managed Work Teams
Teams that manage themselves without direct supervision. They
handle planning, scheduling, and performance.
Group Roles
Expected behaviors for individuals based on their position within the
group.
Stages of Group Development
1. Forming
2. Storming
3. Norming
4. Performing
5. Adjourning
Group Cohesiveness
The strength of the relationships linking group members. Too much can
cause groupthink; too little weakens unity.
Social Loafing
When individuals put in less effort in a group than when working alone.
Group Size
Smaller groups are better for speed and intimacy. Larger groups offer
more resources but may slow decision-making.
CHAPTER 12 – HUMAN RESOURCES MANAGEMENT (HRM)
Steps in the HRM Process
1. Recruitment and selection
2. Training and development
3. Performance appraisal and feedback
4. Pay and benefits
5. Labor relations
Federal Laws
Protect against discrimination and unfair treatment in hiring,
promotion, and workplace conditions.
Demand Forecasting
Predicting future HR needs based on business trends and goals.
Ability Tests
Assess job candidates' skills and knowledge.
Validity and Reliability
Validity means the test measures what it claims to.
Reliability means consistent results over time.
Outsourcing
Hiring external firms to handle non-core business activities.
Job Analysis
Identifies the responsibilities, tasks, and skills required for a job.
Internal vs. External Recruiting
Internal: hiring from within the company.
External: hiring from outside sources.
Interviews
One of the most common selection tools, but subject to bias.
Personality Tests
Assess traits to determine cultural or team fit.
Subjective vs. Objective Appraisals
Subjective: based on opinions (e.g., manager feedback).
Objective: based on measurable results (e.g., sales figures).
360-Degree Feedback
Employees receive performance feedback from peers, subordinates,
supervisors, and sometimes clients.
Labor Relations
The relationship between management and the workforce, especially
concerning unions and collective bargaining.
APPENDIX B – CAREER DEVELOPMENT
Four Types of Career Paths
1. Linear (move up the corporate ladder)
2. Expert (grow deeper in a specialty)
3. Spiral (shift roles every few years)
4. Transitory (frequent changes in job type)
Mentors
Experienced professionals who guide and support others in their career
development.
Five Stages of Career Development
1. Exploration
2. Establishment
3. Advancement
4. Maintenance
5. Decline
