Management Midterm 2

Key ideas behind 'burn your business plan'

Go forward with the process, worry less about the written plan itself.

Individualism

to what extent cultures expect individuals to be self-sufficient versus a group

Femininity

traits of relationships, modesty, caring for weak

Why do managers need to know about tariffs and trade?

while free-trade agreements create new business opportunities, they also intensify competition, and addressing that competition is a manager's job

Logic of Contingency Design

No single best design for all companies and situations - Burns and stalker - Must determine the degree of environmental uncertainty and adapt the organization and its subunits to that situation - Mechanistic versus Organic organizations

Mechanistic organization

- Clear chain of command - Vertical communication - Centralized authority - Low delegation - High specialization

Creative work environment components

- Encouragement from - Organization - Supervisor - Work group - Challenge - Lack of impediments - Freedom also - expertise - positive moods

Getting into business

- Family owned - Starting new - Buy existing - Buy franchise

Preparing for an international assignment

- Language and cross-cultural training - Consideration of spouse, family, and dual-career issues.

budgets

- Most widely used control device - Organizations usually have many o Sales budgets (revenue) o Operating budgets (expenses) o Income statements (revenue, expenses, and net income) o Balance sheet (assets, liabilities, and net worth)

Characteristics of an attractive foreign business climate

- Positions the company for easy access to growing markets. - An effective but cost-efficient place to build an office or manufacturing facility. - Minimizes the political risk to the company.

resistance to change

- Self interest - Easier to do nothing in the short term - Misunderstanding and distrust - Not understanding why change is necessary, not trusting the person doing the change - General intolerance - Intolerance for change and uncertainty

How to make a plan that works

- Setting goals - Developing commitment to the goals - Developing effective action plans - Tracking progress toward goal achievement - Maintaining flexibility in planning.

Organic organization

- Think broadly about who you report to - Lateral communication - Decentralized authority - High delegation - High generalization

what to do when employees resist

- Unfreeze --> Change o Share reasons o Empathize o communicate - Change --> Freeze o Explain o Champion o Opportunities for feedback o Offer security (job security) o Educate o Don't rush

PERT Networks

- if prior data is available, use it - For new tasks, use expert judgment and this formula

Strategy canvas

-Graphical depiction of a company's performance -Relative to its competitors -Viewed across the industry's key success factors

Planning/control tools

-planning & control should be connected -sample methods: *PERT Networks *Gantt Charts

Getting funding

1) Equity 2) Debt 3) Awards from competitions

Characteristics of service provision

1. Customers participate 2. Services are consumed immediately 3. Services are provided where and when customer desires 4. Services tend to be labor intensive 5. Services are intangible (haircut).

Steps in rational decision making

1. Define the problem 2. Identify decision criteria 3. Weigh the criteria 4. Generate alternative courses of action 5. Evaluate each alternative 6. Compute the optimal decision

Forces for internalization

1. Modern communication technology 2. Air travel 3. Corporate globalism

Types of plans, procedures, and rules

1. Starting at the top (vision and mission) 2. Bending in the middle (tactical plans and mgmt. by objectives) 3. Finishing at the bottom (operational plans, standing plans, single-use plans)

Lewin's change model

1. Unfreezing 2. Changing 3. Refreezing

Internalization Process

1. exporting 2. cooperative contracts 3. strategic alliances 4. wholly owned affiliates

3 types of control

1. feedforward control 2. concurrent control 3. feedback control

Components of Economic Value Added

It is the amount by which profits exceed the cost of capital in a given year.

Limited liability company

A business organization in which the business (not the owner) is liable for the company's debts

Proprietership

A business owned by one person

Masculinity

A national culture attribute that describes the extent to which the culture favors traditional masculine work roles of achievement, power, and control. Societal values are characterized by assertiveness and materialism.

What is a mongrel? Why is it a good thing?

A person comfortable in multiple cultures. Allows you to understand cultural differences and values.

Gantt Chart

A time and activity bar chart that is used for planning, managing, and controlling major programs that have a distinct beginning and end.

Control methods

Bureaucratic Objective Normative Concertive Self-control

Stage 4: Wholly owned affiliates

Decide to buy another company in a foreign country and buy it outright

Effective Missions

Define the organizations purpose for stakeholders in a way that is enduring, inspirational, clear, and consistent with company values

Licensing agreement

Foreign business operator pays a licensing fee to have access to business processes

Stage 2: cooperative contracts

Foreign business operator pays local headquarters a fee or royalty to do business in their country - licensing agreement - franchise agreement

Franchise agreement

Foreign operator pays a company a franchise fee and a percentage of sales for right to conduct business

Hofstede's Cultural Dimensions

Long vs short term orientation Uncertainty avoidance Masculinity vs. Femininity Individualism vs. Collectivism Power distance

Types of ownership

Proprietorship/Partnership Corporation Subchapter S-Corporation Limited Liability Company

Quality in service provision (RATER)

Reliability - most important Assurance Tangibles Empathy Responsiveness

Firm level strategies

Strategic Moves in Direct Competition: attacks & responses in red ocean Entrepreneurship: movement into deep blue waters

span of control

The number of people who report to a manager o Narrow spans of control create "tall" organizations o Wider spans of control create "flat" organizations

Tariff trade barriers

a direct tax on imported goods increase the cost of imported goods relative to that of domestic goods

Stage 3: Strategic Alliances

Two companies headquartered in different countries agree to share costs, liabilities, and profits

Creating a sustainable competitive advantage

What you do must be: - valuable - rare - imperfectly imitated - non-substitutable

Organizational development interventions

large system interventions - sociotechnical, survey small group intervention - team building, unit goal setting person focused intervention

Portfolio strategy

a corporate-level strategy that minimizes risk by diversifying investment among various businesses or lines

SWOT analysis

a planning tool used to analyze an organization's strengths, weaknesses, opportunities, and threats

Technology cycles

begins with the birth of a new technology and ends when that technology reaches its limits and dies as it is replaced by a newer, substantially better technology

Industry positioning strategies

cost leadership, differentiation, focus strategy 4 - cost leadership - cost focus - differentiation - focused differentiation

High context cultures

cultures in which nonverbal and situational messages convey meaning relationship is more important than terms

Low context cultures

cultures in which words convey primary meaning nonverbal messages are secondary

Delphi techniques

decision-making method in which members of a panel of experts respond to questions and to each other until reaching agreement on an issue.

nominal group technique

decision-making method that begins and ends by having group members quietly write down and evaluate ideas to be shared with the group.

Experiential innovation

discontinuous o Uncertain environments o Intuition, flexibility o Goal: new product/service

balanced scorecard

encourages managers to look beyond such traditional financial measures to four different perspectives on company performance. Financial, Customer, Internal, Learning

Wide spans of control

flat organizations § A lot of people report to one person § Lower oversight § Higher autonomy § Salary is lower

Stability strategy

focuses on improving the way the company sells the same products or services to the same customers

growth strategy

focuses on increasing profits, revenues, market share, or number of places to do business

retrenchment strategy

focuses on turning around very poor company performance by shrinking the size or scope of the business

Basic departmentalization structures

functional, product, customer, geographic, matrix

Collectivism

group comes first, self comes later

Corporate "Grand" Strategies

growth, stability, retrenchment

Problem at Mustang Jeans

inability to understand cross-cultural differences in communication patterns American manager tried rushing interaction and didn't take time to build relationship. Japanese manager felt uncomfy with changeover and didn't sign contract because of it. Should've tried to build relationship outside of office before getting deal done.

Compression innovation

incremental o Certain environments o Series of steps o Goal: faster/cheaper

equity

investors give you money that they don't expect to ever be repaid, in exchange they receive ownership of the company

Boston Consulting Group Matrix

is a portfolio strategy that managers use to categorize their corporation's businesses by growth rate and relative market share, which helps them decide how to invest corporate funds separates businesses into four categories based on how fast the market is growing (high growth or low growth) and the size of the business's share of that market (small or large).

decentralization

is the location of a significant amount of authority in the lower levels of the organization. An organization is _________________ if it has a high degree of delegation at all levels. In a decentralized organization, workers closest to problems are authorized to make the decisions necessary to solve the problems on their own.

centralization

is the location of most authority at the upper levels of the organization. managers make most decisions, even the relatively small ones

staff authority

is the right to advise but not command others who are not subordinates in the chain of command

Line authority

is the right to command immediate subordinates in the chain of command.

Long term orientation

more focused on the future

Short term orientation

more focused on the present

global new ventures

new companies that are founded with an active global strategy and have sales, employees, and financing in different countries

Non-tariff trade barriers

nontax methods of increasing the cost or reducing the volume of imported goods. quotas, voluntary export restraints, government import standards, government subsidies, and customs valuation/classification

Errors managers make (what NOT to do when leading change)

not establishing a greater sense of urgency not creating a powerful enough coalition Under communicating the vision by a factor of 10 not removing obstacles to the new vision. not systematically planning for and creating short-term wins Declaring victory too soon not anchoring changes in the corporation's culture

Subchapter S-Corporation

o Exists as separate companies o Earnings are taxed once o Earnings are passed through to owners

Main differences between types of ownership

o How/when earnings are taxed o Liability for debts

Feedback control

o Monitoring outputs o Monitoring products o Learning from past mistakes

concurrent control

o Monitoring processes o Adjusting ongoing activities o Observing problems in real-time and correct them o Productive processes and activities

Corporation

o Separate legal entity for doing business o Exists separately from owners o Legally a person o Earnings are taxed twice

feedforward control

o Using the 6 step control process to monitor the inputs o Set standards for the quality, measure, take corrective action o Anticipating and preventing problems

debt

receiving financing from bank, with expectation that you will return the amount in full plus interest. Don't have to give up any ownership rights

Delegation

responsibility authority accountability

Awards from competitions

rich benefactor, someone just gives you money

Stage 1: exporting

selling products in a different place than its origin

Control process

set standard measure actual performance compare with standard identify deviations analyze deviations take corrective action

Narrow spans of control

tall organizations § A manager oversees a small number of employees § Higher oversight § Lower autonomy § Salary is higher

Uncertainty avoidance

the degree to which societies are willing to tolerate uncertainty and risk high uncertainty avoidance: do not like uncomfortable situations

Power Distance

to what extent are people in the culture comfortable with unequal distribution of wealth, power, resources, authority low: everyone should be equal high: unequal is normal

Chain of command

the vertical line of authority that clarifies who reports to whom throughout the organization