exam 1
sequential interdependence
(mid level) Output becomes input
What are some different ways the business model canvas can be used?
-Design new models -Starting point for -strategic planning -Historical analysis -Provides snapshot and common language -Understand competition -Companies best served by a portfolio of business models
organization
A collection of of people working together to achieve a common purpose -Goal oriented -Structured activities -Linked to the environment -Identifiable boundaries
characteristics of a team
A shared collective identity Common goals Interdependence in terms of assigned tasks or outcomes Distinctive roles within the team
goal setting theory
Based on the premise than an individual's intention to work toward a goal is a primary source of motivation Goal clarifies for employee what needs to be accomplished and how much effort is required for completion
solving problems
Become problem solver rather than critic or competitor Engage directly with the problem and make it collaborative and vulnerable
self-fulfilling prophecy
Behavior is heavily influenced by the expectations of those around us People live up or live down to expectations Example: manager believes team is amazing more likely to succeed than if manager sees her team of sub-par workers Leaders provide more encouragement and support to strongest people because they believe investments will pay off
what is strategy not
Being the best (vague) Being the first or only (temporary) Doing the same things better (operational effectiveness) Best practices common Long run need to be distinct
leadership effectiveness: improvement in the skills abilities of followers
Best leader help individuals improve → mentoring, giving difficult tasks
leadership effectiveness: objective performance
Best leader met or exceeded performance expectations Worst leader failed
directive leadership
Boss makes decisions Here's what I need from you This is how you do it This is what you do next I own it Here's where I see this going Here's my opinion
entrepreneurial startup
Build a scalable business model - Innovation - Growth oriented - funding
when does differentiation work best
Buyer needs and uses of product are diverse Many ways to differentiate product to add value Few rival firms following differentiation approach Technological change fast paced and competition revolves around new features
resources and capabilities for narrow segment
Capability to do outstanding job or satisfy needs and expectation of niche buyers, Resources and capabilities for upscale product or service at lower cost than rivals
Why is it "cost" leadership and not "price" leadership?
Costs refer to costs on business side → low cost in operation Companies can drive down costs while still having higher prices than competitors
what is unique about Ikea BMC
DIY customer transport and assemble KP affordable modern furniture VP reduced operating costs CS
case Marlow construction
Dan marlow founder and president Expanding company Fired gomez Gomez had good capability and helped others but had history of showing up lyer Tried to explain to gomez importance of showing up on time and tried to recognize his good work but pattern continued Many other employees had same problem → high turnover Gave rewards → health, parties, classes, open door policy No complaints
customer segments
Defines the different groups of people or organizations an enterprise aims to reach and serve
cost structure
Describes all costs incurred to operate a business model some more cost driven than others Creating delivering value, maintain customer relationships, and generating revenue all incur costs
channels
Describes how a company communicates with and reaches its customer segments to deliver a value proposition - communications, distribution and sales
key resources
Describes most important assets required to make a business model work Physical, financial, intellectual, human
key activities
Describes most important things company must do to make its business model work and operate successfully
Key partnerships
Describes network of suppliers and partners that make the business model work Strategic alliances between non-competitors Coopetition: strategic partnerships between competitors Joint ventures to develop new businesses Buyer supplier relationships to assure reliable supplies
value propositions
Describes the bundle of products and services that create value for a specific customer segment
leadership involves disproportionate influence
Disproportionate → given time, one person is better able to influence others than someone else Can lead upward downward sidewards People can have influence in some cases but not others Influence happens when others are willing to allow you to direct their attention and action Influence cuts to the core of what leadership is and distinguishes from other things like power or authority
why does goal setting sometimes fail
Easy specific goals Can miss out on performance capability Lower motivation because not much of a challenge What gets measured is what gets done What gets rewarded is what gets done Undermines intrinsic motivation Encourages risky or unethical behavior
equity theory
Employee will assess what he is getting from a job and what he is putting in and compare this ratio to what others are experiencing both inside and outside work Related to distributive justice Ratio is roughly equal → satisfied Others less favorable → guilt Other more favorable → unfair
macgregor leadership style
Empowering Saves time for leader Develops subordinates Increase commitment Putting decision making in hands of subordinates
business model
Explains how a business runs, how it creates and captures value Companies are impacted by external forces Competition Economic Regulatory Technolicial Keeping these in mind + developing competitive advantage → strategy
two fields of accounting
Financial accountants Prepare financial statements to help users both inside and outside organization assess financial strength of company Managerial accountants Prepare information (reports, cost) → internal use
IPO (initial public offering)
First sale of a companies shares to the public and the listing of shares on a stock exchange Allows company to raise capital in order to build its business by creating newly issued shares and selling existing shares
Narrow cost leadership
Focus on a particular buyer segment of geographic segment and must locate a niche market that needs an efficient product and willing to pay a lower price Costs can be reduced by little to no service, low cost distribution
Best-Cost Provider
High quality products at low prices Cost leader while having differentiated product Costco
cons to functional groups
Hinder communication and decision making between units
span of control
How many individuals can a manager efficiently and effectively direct Measures the number of people reporting to a particular manager
unity of command
How many supervisors do each report to (make sure there are no conflicting directions)
divisional structure
Large companies Common tasks (legal work) centralized at headquarters Divisions function autonomously because it contains most of the functional expertise needed to meet its objectives Divisions can be formed according to products, customers, processes, or geography
When does a best-cost provider strategy work best?
Market where differentiation is the norm and large numbers of value conscious buyers can be induced to purchase midrange products rather than expensive differentiated products or cheap low cost provider products Either medium quality at below average price or high quality at average price
Interdependent relationship between leader and follower
Mutual dependence between two fallible human beings Boss and subordinates have an interdependent relationship Subordinate usually depends on boss more though
requirements for expectancy
Necessary skills and abilities Sufficient resources Clear goals and expectations Guidance and feedback Knowing that more effort leads to better performance
empowerment/involvement/participative management
Organizations must decide wide array of incentives to ensure that a broad spectrum of needs can be addressed recognition by superior → positive feedback, formal ceremony (informal and formal)
what is required for valence motivation
Outcomes that are valued Outcomes that are fair
procedural justice
Perceived fairness of the process used to determine outcome (I had chance to explain why I deserve big raise and boss gave reasonable explanation)
management
Planning for, organizing, leading and controlling a company's resources so that it can achieve it goals
When does a low-cost provider strategy work best?
Price competition is rigorous Products of rivals are identical and available from several sellers Few ways to achieve differentiation to have value Buyers incur low costs in switching purchases from one seller to other Majority of industry sales are made to a few large volume buyers Industry newcomers use introductory low prices to attract buyers
pros and cons for divisional
Pros More customer oriented Faster response times Better coordination within divisions Cons duplication of resources Increased costs Disconnect between divisions
pros and cons for matrix
Pros More customer oriented Flexible Cons Resource allocation confusion Lack of clarity for reporting Complicated
pros and cons for functional group
Pros Specialization Efficiency Skill development and clear career paths Cons May lack customer focus Slower response times Tribes or silos
resources and capabilities for differentiation
Resources and capabilities (tech, strong skills in product innovation, customer service) to incorporate unique attributes into its product offering that a broad range of buyers will find appealing
pros to functional groups
Specialization Similar interests
Components of Goal-Setting Theory
Specific goals lead to higher performance than generalized goals More difficult goals lead to higher performance than easy goals Feedback on progress toward goal enhances performance
Decentralization
Spreads decision making throughout the organization Cons Conflict between divisions and decision making
Counterdependence
Subordinate or dependent Anger when actions are constrained by boss Resent boss rebel against boss Fight against boss for sake of fighting Boss is hindrance
managing
Supporting and facilitating individuals working to achieve individual and organizational goals Executing strategy Doing things right
commerce
The exchange of goods and services Use interchangeably with the term business in its general sense (business vs. a business)
leadership behaviors: task
The extent to which someone clearly defines and organizes their teams work and makes clear how different roles within a team are interrelated and contribute to the greater effort Adhering to and enforcing others adherence to clear and consistent rules and expectation for communication Clear standards for behavior, rewards and punishments Allows people to make clear progress towards goals
specialization
To what degree are tasks and activities subdivided into separate distinct jobs
perspective taking
Try to see or understand things from another persons point of view
perspective getting
Trying harder to get another person's perspective instead of trying to take it
leading
Uniting individuals around a common goal Developing the strategy Doing the right things
usage fee
Use of particular service, more use more pay Telecom operator, hotel
Understand other person's perspective
Usually people don't have bad intention Why is this person acting this way What might be motivating them How do they see me What might they want from me
what is required for instrumentality
What is required to motivate Know the outcomes for good/poor performance Measure performance accurately and objectively
Private equity
When a group of investors makes a direct investment in a company Focus on mature companies past growth Provide funds to business in distress Sometimes buy out a business→ improve operations then sell Goal: make company worth more so they can generate a return on investment
escalation of commitment
When there is a fear that changing plans will result in a loss of sunk costs and embarrassment from admitting a mistake Focus is on what has already been paid (sunk costs) rather than benefits that come with change
front stage (right) of BMC
customer facing (value) Customer relationships Channels Revenue Customer segments
owned channels
direct In house sales force Web sales Own stores
leadership style for D1
directing
what to understand about your boss
goals and objectives, pressures, strengths, weaknesses, blind spots, preferred work style
loving spoon case
loving spoon offers home style soul food night crowd increasing for other restaurants + drinks parents think loving spoon shouldn't change - loyal customers - low employee turnover - highly efficient - low labor costs Alexis thinks should become modern high end sharai thinks modern and current concept mom scared of risking loyal customers and running two locations hard applies to concept: figuring out which strategy works best - right now they are narrow cost leadership - sharai wants broad differentiation - Alexis wants narrow differentiation
link between personality traits and leadership
mainly opens conscientiousness and extraversion not a high correlation between them
Broad Scope
many customer segments
wide span
many direct reports
Differentiation
marketing unique product in market, price not big factor, difference may be based on design, distribution
Broad Cost Leadership
offering a broad range of products at a low cost (Walmart)
leadership
process involving disproportionate influence over others in pursuit of goals
wildfire entertainment case
project teams - flexible - free spirit no schedule or routine - employers can implement ideas growing landscape --> two level structure not working, fire fighting hired Elizabeth (consultant) 1) hierarchical functional system - functional units - problem: no one saw bigger picture and considered what buyer wants + delayed decisions 2) matrix structure - dedicated teams for each product - shared budget caused argument 3) divisional structure
what is unique about dyson BMC
research and development KA intellectual property and patents KR premium consumer appliances VP
what to understand about yourself
strengths, weaknesses, personal style, biases, predisposition to dependence on authority
Revenue
the funds of an enterprise receives in exchange for its goods or services
norming
the group find ways of resolving conflict and begin to emerge as a cohesive unit feedbacks and criticism are given constructively and members start cooperating
Departmentalization
the grouping of jobs into working units usually called departments, units, groups, or divisions
attribution
the process through which individuals attempt to determine the causes behind other behavior
Motivation
the reason or reasons one has for acting or behaving in a particular way. pushes us from where we are to where we want to be
social loafing
the tendency for people in a group to exert less effort when pooling their efforts toward attaining a common goal than when individually accountable
overlooked competitors
those that can be hired to do job that arent perfect match to your product Ex: instead of milkshake, coffee bananas etc
team
two or more individuals with specific roles interacting adaptively, interdependently, and dynamically toward a common and valued goal
internal explanations + examples
when the behavior is thought to be under own control Knowledge Ability Skills Experience Effort
liquid death
- Goal: create something to make friends laugh - Unhealthy brands had funniest, coolest marketing - Test idea: $5000 launched brand with no product, became more popular than billion dollar water companies - Sustainable water company marketed like unhealthy companies - Making a sustainable water (most water not sustainable) - Used social media marketing → cheap - Found success in bars at first → retail stores - Innovative ideas → trick your brain into thinking about a bad idea because we are programmed to think about things that have been done before
Shibumi Shade
- Shelter 6 people meant to fold into one compact bag that weighs less than four pounds less than five minutes to put up and just as much shade - Developed because tired of toppling umbrellas - Sets them apart → wind friendly → creates shade - Job → to make beach experience less stressful and more easy
two types of revenue streams
- Transaction revenues wrestling from one time customer payment - Recurring revenue streams resulting from ongoing payments to either deliver value proposition or post purchase support
what does it take to achieve entrepreneurial success
- does it take to achieve entrepreneurial success? - Something customers need - Good team - Financial savvy Resourceful, whether and when to seek funding - Good timing - Experience → just do it
principles for aspring entrepreneurs
- identify problem you feel driven to solve - role as founder - adding value
top reasons for startup failure
1) ran out of money 2) no financing/investor interest 3) no business plan all related to money
fundamental attribution error
A mistake that people frequently make when they are trying to figure out what caused someone to act a certain way Generally underestimate external factors and overestimate internal factors
what strategy is
A plan of action that will develop a businesses competitive advantage Do different things Do things differently Needs trade offs → can't be everything at once Brand consistency on customer side Different processes skills and activities on business side
overall rate of startup failure
About 70% of entrepreneurs will face potential business failure (survey of 150 founders) 66% in first 25 months
business
An organization that seeks to provide goods and services to customers
niche market
Cater to specific, specialized customer segments Value proposition, distribution channels, customer relationships tailored to specific requirements of a niche market Often found in supplier buyer relationships
why is it important to be curious
Certainty enemy of change Curious → wards off confirmation bias, stereotyping, and approach situations with creativity Pose genuine questions instead of conclusions
D4 (Situational Leadership)
Competence Accomplished Consistently competent Recognized by others as an expert Commitment Self reliant Justifiably confident Inspired
D3 (Situational Leadership)
Competence Demonstrated experience Makes productive contributions Generally skillful and adept Commitment Sometimes hesitant, unsure Not always confident May be bored
D2 (Situational Leadership)
Competence Has some knowledge and skills Doesn't know how to move forward Inconsistent performance and progress Commitment Discouraged and frustrated Overwhelmed unmotivated Confused and concerned afraid of making mistakes
D1 (Situational Leadership)
Competence New to goal or task Inexperienced Don't know what they don't know Commitment Eager to learn Enthusiastic Confident learning won't be difficult
Overdependence
Compliant fashion and believes boss knows everything and is all wise Swallow anger and don't speak up when needed
strategic focus
Concentrates on meeting the specialized needs of its customers Products services designed to meet need Industrial buyers or consumers but not both
Jobs to be done theory
Customers don't purchase products based solely on their attributes but rather hire products to do jobs they need done Example: milkshakes sold before 8:30 Instead of looking at consumers to explain their buying behaviors focus on job → people need something to keep them full and entertained for morning commute
customer relationships
Describes the type of relationships a company establishes with customer segments
leadership behavior: change
Developing and communicating a compelling vision, encouraging others to contribute to vision and creating a safe environment for different perspectives Allow people to speak up Promonte climate or learning Groups remain agile and flexible to keep up with changing environments
response to Internal attribution
Disciplinary response
downsides of being public
Disclosure burden → info that must be made public Scrutiny by investors and public Short term focus
job specialization
Dividing tasks into jobs To what extent are the jobs in an organization narrowly or broadly divided among employees Are employees expected to perform only very specific tasks and activities
ask questions
Don't become assertive or jump to conclusions Put your own agenda aside and ask questions and hear answers
mass market
Don't distinguish between different customer segments Value proposition, distribution channels, customer relationships all focus on one large group of customers with broadly similar needs and problems Often found in electronics sector
Exchange relationship
Drawing on each others strengths and making up for each other's weaknesses Accommodates different working styles
matrix structure
Employees from various functional areas (product design finance marketing) form teams to combine skills on specific project or product
what does situational leadership require
Employees need different levels of direction and support depending on their level of competence and commitment Most managers only use one leadership style and results are costly → turnover, disengagement, diminished productivity
leadership effectiveness: creating a positive work environment
Enjoyable People liked each other Employees worked well together Can speak up with ideas and problems
Marketing
Everything a company does to identify customer needs (Market research) Design products to meet customer needs Develop the benefits and features of products (price and quantity) Determine best way to deliver products and services and promote Manage customer relationships
informal power (personal)
Expert power (skills and expertise) Referent power (relationail, admiration) Informational power (needed, wanted info)
Narrow differentiation
Focus on one specific customer segment, narrows down to focus of unique needs
motivation
Forces within a person that affect the direction, intensity and persistence of voluntary behavior
licensing
Generated by giving customers permission to use intellectual property in exchange for licensing fees Allows rights holders to generate revenue from property without having to have product Common in media industry with copyrights Technology patents
case Marlow construction Gomez version
Gomez worker at marlow construction Family pressures, financial pressures Job was fine, pay about same, benefits, dan marlow (boss) seemed decent Marlow fired gomez → always running late Marlow liked gomez he was capable and helped others In reality car broke down couldn't pay for it and had to take bus Didn't want to seem like he was making excuses so didn't tell marlow Rewards didn't matter
managing up case
Grace worked at 8sk consulting Landon supportive manager Grace → told customer she has something more important to do → customer mad → landon handled it then used it as a learning opportunity for grace Grace doesn't like having people tell her what to do → wants to climb in ranks of company and take on greater responsibility New software from old intern Landon said no not now Try to get in on new big company project Grace mad and gets peers involved who compains to managers Company social→ sees bill alone and brings up software Bill appreciates her for trying to improve company Landon interrupts Grace mad Next day grace emails bill then sends two more Landon and grace meet Grace stirring pot and not acting professionally Grace feels shut down Wants to take on more responsibility
functional groups
Groups together people who have comparable skills and perform similar tasks Small to medium compares group by function→ accountants, marketing, production, etc Each unit headed by individual with expertise
competitive advantage
How will a business do better than its rivals
Relationship between reward and personal needs
If i get the reward will it mean much to me
relationship between performance and reward
If that task is completed will I receive something for it
Broad Differentiation
Industry wide competitive advantages that set offers apart from others, customer market must be vast, widely valued by customers and uniqueness in a large market
referent power
Influence becomes of admiration Employee who is well liked by peers able to influence their behavior
Brokerage fees
Intermediation services performed on behalf of two or more parties Credit card providers earn revenues by taking percent of value of each sale between merchants and customers Brokers, real estate agents
intrinsic rewards
Intrinsic rewards come from within individuals Satisfaction, accomplishment, confidence, pride
seed funding
Investment made very early in a venture's life to fund the development of a prototype and feasibility analysis
Public company
Is listed on a public exchange (Shares of ownership in the company can be bought and sold) Has public reporting obligations because they -Sold securities in a public offering (such as initial public offering) -Allowed the investor base to reach a certain size which triggers public reporting obligations
What do companies need to take into account before changing their structure?
Is the business too inefficient or too inflexible Are divisions made too late Are decision of poor quality Is there too much conflict between units If the business replaced the people would the problems likely go away Yes → people problem No → structural problem Change may not resolve all issues Difficult Time and cost consuming Employee resistance Change fatigue Must consider trade offs
formal power
Legitimate power (authority) Coercive power (power to punish) Reward power
pooled interdependence
Lowest level of required coordination. Members complete work independently and then work is "piled" up together.
macgregor case
Macgregor is the manager of a refinery best around town Reporter talks to him, johnson and peterson to understand how the refinery works Thursday manager → runs meetings Lets employees make mistakes because its a learning experience and he will take the cost of it Employees help each other Employees gain leadership skills → become managers Leadership Non involved approach Employee johnson → problem → no help at first → finally agreed and macgregor taught him how to problem solve
empowering leadership
Manager permits subordinates to make decisions within limits What do you need from me This is your role Here's how it fits in big picture You own it Where do you see this going What's your opinion
benefit of teams
More and better ideas and solutions More learning and greater retention from group interactions Develop important life and career skills Create personal connections
Centralization
Most decision making centralized at top Pros Consistency in decision making More quick decision making Cons Lower level under utilization Neglect information front line may have
naive realism
Most of us believe we see issue correctly and objectively and other person is uninformed irrational
importance of revenue
Most startups cannot expect immediate profit Set a breakeven point - Proves that startup is solving a problem in sustainable way - If no one will pay, more financing won't help - Best way to measure product market fit
what does macgregors approach require
Motivated, collaborative, ensured clarity in assignments, subordinates set goals, resources and information, tolerated mistakes, consistent approach
leadership "in pursuit of goals"
Moves people toward goal and not steady state Manger does not mean leader Manager maintain status quo Leader → better than status quo
interactional justice
Perceived degree that respect is given (boss was polite and respectful to me)
distributive justice
Perceived fairness of an outcome I deserve the size of raise I got
finance
Planning for, obtaining, managing company funds How much money does company need How and where will it get the necessary money? How and when will it pay the money back? How much should be spent on research and development Especially important when business starts → borrowing money
how is influence different than power or authority
Power → opposite of dependence Authority → formal power Power and authority make people do things while influence is about getting people to do things they may not necessarily do on their own
common issues of teams
Pressure to conform (group think) One person may dominate Social loafing → tendency to put forth less effort when working in a group Time and scheduling
accounting
Provide managers accurate relevant and timely financial information Measure summarize and communicate financial and managerial information and advice managers
ways to address biases and errors
Recognize that we have a tendency to be cognitive misers Seek out more information and different perspectives Opposing views When possible give ourselves time to step away from division before making it
revenue streams
Represents cash a company generates from each customer segment Each stream may have different pricing mechanisms Fixed list prices Bargaining Auctioning Market dependent Volume dependent Yield management
Subscription fee
Selling continuous access to a service Gym, music
asset sale
Selling overnerhsip rights to physical product Amazon sells books musc electronics
Leadership is a process
Set of behaviors and responses that continues for some period of time Not one time interaction or inherent Can be learned (process)
Lending/renting/leasing
Temporarily granting someone the exclusive right to use a particular asset for a fixed period in return for a fee Lender → advantage of recurring revenues Renters → enjoy full benefits → limited time expenses not full cost Zip car
coercive power
The ability of a manager to punish others ex:Manager can withhold promotion if employee does not follow
Interdependence
The degree to which team members need to rely on each other to accomplish the team task
Expectancy Theory
The probability of an individual acting in a particular way depends on the strength of that individuals belief that the act will have a particular outcome and if they value that outcome
Expectancy (E->P)
The subjective probability that one's performance depends on the amount of effort exerted.
expectancy theory
The way we act depends on what we expect to happen and how much we want that outcome effort --> performance --> outcome --> personal needs Theory shows that all these relationships have to be positive for an employee to feel motivated to perform
leadership behavior: relationship
Things someone does to show concern for others and make it enjoyable to be a member of the group How they are doing, look out for welfare, respect, encouragement Followers appreciate and more likely to go above and beyond for team, express job satisfaction, and remain committed to group over time
what did the paper clip exercise teach us about effective goals
Those with difficult specific goal outperform easy difficult goal (C>B) Those with difficult specific goal outperform non specific (C>A) Key is to have a goal that is specific, challenging, achievable, accepted and fair
Stakeholders
Those with legitimate interest in the success or failure of the business and the policies it adopts Every business has them whether it is a national or local level sometimes interests conflict - customers want low price while lenders want high profit margins
Formalization
To what degree will there be rules and regulations to direct employees and managers
chain of command
To whom do individuals and groups report?
traits of effective teams
Trust one another Engage in unfiltered conflict around ideas Commit to decision and plans of action Hold one another accountable for delivering against those plans Focus on achievement of collective results
self serving bias
We judge our own behavior in a different way When we succeed we attribute win to internal factors (worked hard) When we fail we blame external factors (boss doesn't like me)
Relationship between effort and performance
Will my attempt to do something actually lead to a certain outcome
when are people motivated
Willing to put forth the necessary effort (intensity) To achieve a goal (direction) For the amount of time necessary to reach it (persistence)
influence "over others"
Without followers, no leadership Willing to follow
cognitive misers
a General tendency among all people Rule people tend to use mental shortcuts in making judgments and drawing inferences
confirmation bias
a tendency to search for information that supports our preconceptions and to ignore or distort contradictory evidence
reward power
ability to bestow positive benefits on employees ex:Manager can give raise to those who do what their job well
Punishment
anything that decreases the behavior
reward
anything that increases the particular behavior
ABC of Leadership
attributes/traits Extraversion → energetic likable (subjective view of effectiveness) consciousness → doing right things carefully, attention to detail Behavior/styles leadership depends on Relationship oriented behavior Task oriented behavior Change Oriented behavior context/situation Which behaviors/styles best fit context or situation
reinforcement theory
behavior is a function of its consequences People do things because they know other things will follow Consequences: positive negative none
Instrumentality (Expectancy Theory)
belief that a given level of performance will lead to specific outcomes
backstage of BMC
business facing (efficiency and costs) Key partners Key activities Key resources Cost structure
competitors
businesses currently offering solutions to identified job
leadership style for D2
coaching
five dimensions of power
coercive, reward, legitimate, expert, referent
extrinsic rewards
come from outside individuals Pay raises, promotion, bonuses
resources and capabilities for low cost provider
company has to have resources and capabilities to keep costs low, can manage value chain activities better than rivals or innovative capability
performing
confidence grows both individually and with other members of the group as they work toward a common goal
storming
conflict occurs as personal agendas come to light. members assert themselves and start questioning decisions and challenging authority
legitimate power
connected to the authority inherent in a person's role ex: Listen to manager because of hierarchy
economy of scale
cost advantages that a business enjoys as its output expands Larger companies can benefit from bulk Output rises → cost per unit falls
Sunk costs
costs that have already been incurred and cannot be recovered
how does grace case relate to content
counterdepent, fundamental attribution error, needs to understand each other working styles (mutual dependence)
9 components of a business model
customer segment value proposition channels customer relationships revenue streams key resources key activities key partnerships cost structure
Examples of stakeholders
customers, vendors, employees, landlords, bankers
leadership style for D4
delegating
Employee empowerment
delegating decision making authority to employees at all levels Given greater responsibility Able to contribute more skills
Three types of organizational justice
distributive, procedural, interactional
Silicon Valley model
entrepreneurial startups in Silicon Valley, grow and then go public
narrow span
few direct reports
value driven
focused on value creation, premium value proposition
four stage development process
forming, storming, norming, performing
want
gap between what is and what is desired
need
gap between what is and what is required
tall organization
has many levels of authority relative to company size
Coordination
how do you achieve interdependence
partner channels
indirect Partner stores Wholesaler Partner websites
Expert power
influence that comes from having special knowledge Personal characteristics ex: Tax accountant tells us we cannot make deduction we listen because they understand more than we do
ways to go public
initial public offering: private company creates new shares which are underwritten by a financial organization and sold to public Special purpose acquisition company (SPAC): separate company with no operations is created strictly to raise capital and acquire the company going public Fasted method of going public Direct listing Private company enters a market with only existing outstanding shares being traded and no new shades created Cost is lower than IPO since so feed need to be paid for underwriting
fixed pricing
list price, product feature dependent, customer segment dependent, volume dependent
Cost Leadership
low cost markt strategy, minimize costs and competitive edge through price, effective for organization with limited possibility of product differentiation, customers are price sensitive
forming
members start interacting and try to work out what is expected of them. excitement and enthusiasm is mixed with fear and uncertainty
cost driven
minimizing costs whenever possible, Low price value proposition, maximum automation and outsourcing ex: southwest airlines
response to External attribution
more effort to fix situation in constructive way Get help for employee Clarifying role/procedures
coordination for reciprocal
mutual adjustment
dynamic pricing
negotiation, yield management, real time market supply and demand, auctions
Examples of value propositions
newness, performance, customization, getting the job done, design, brand status, price, cost reduction, risk reduction, accessibility, convenience
private company
not on public exchange Most companies begin as startups with small pool of shareholders that contribute to its private capital (personal savings, family, loans)
flat organization
one with an organizational structure with few or no levels of middle management between top managers and those reporting to them
why do companies use partners
optimization and economy of scale, Reduction risk and uncertainty, Acquisition of particular resources and activities
narrow scope
particular niche, specific customer ex: McDonalds focuses fast food low cost
private capital
personal funds, friends, families, loans
coordination for sequential
planning
three types of interdependence
pooled, sequential, reciprocal
managers
set goals and develop strategies to achieve them maintain status quo, organizations goals -organize activities and resources staff the organization with qualified employees led by managers -design controls for assessing success of plans -Take corrective action
coordination for pooled interdependence
standardization
three levels of coordination
standardization (low), planning (mid) mutual adjustment (high)
leadership style for D3
supporting
Groupthink
the mode of thinking that occurs when the desire for harmony in a decision-making group overrides a realistic appraisal of alternatives
Valence (Expectancy Theory)
the value a person places on future outcomes, or "what's" in it for me?
affinity bias
unconscious tendency to align with people who are similar to us in appearance, beliefs, background
steps involved in analyzing a case
understand citation identify evidence interpret exhibits apply concepts reach conclusion
state of tension that results from unsatisfied needs and wants
unsatisfied needs and wants creates a state of tension that motivates individuals to practice behavior that will result in the need being met or the want being fulfilled
what is at the heart of the business model campus
value proposition
Profit
what is left (hopefully) after all the bills are paid Profit = Revenue - bills and costs
external explanation + examples
when behavior is the result of external situational factors Job Supervisor Coworkers Resources Luck
what is unique about air bnb BMC
word wide third party property listing KR hosts/property owners KP rent out idle property VP payments to hosts CS
reciprocal interdependence
work completed by different jobs or groups working together in a back-and-forth manner adjust as situation changes highest level
small business
work for yourself, be your own boss, generate steady income