Management test 2
what do you when developing the plan
- define mission and vision - set goals - manage goal conflict
what do you when translating the plan
- define tactical plans and objectives - develop strategy map - define contingency plans and scenarios
parts of a strategy map for aligning goals
- financial performance goals - customer service goals - internal business process goals - learning and growth goals
parts of financial performance in strategy map
- increase revenue in existing markets - increase productivity and efficiency - increase revenue in new markets and products
choice among three main models of decision-making approaches depends on ...
- on the manager's personal preference -whether the decision is programmed or nonprogrammed -degree of uncertainty associated with the decision
mission statement defintion
- reason the organization exists - how they differ from their competitors - may include statement of their values
limitations of planning
-Goals and plans can create a false sense of certainty -Goals and plans may cause rigidity in a turbulent environment -Goals and plans can get in the way of intuition and creativity
Examples of franchises
- McDonald's - Subway - Papa John's - Red Driving School - KFC - Burger King - Hertz - Kumon - Hard Rock Cafe - Hilton Hotels
assumptions of political model
- Organizations are made up of groups with diverse interests, goals, and values - Information is ambiguous and incomplete - Lack of time, resources, or mental capacity to process all information regarding a problem - Decisions are the result of bargaining and discussion among coalition members
parts of customer service goals in strategy map
- build and maintain good customer relationships - be the leader of quality and reliability - provide innovative solutions to customer needs
operational plans definition
developed at the lower levels of the organization to specify action plans toward achieving operational goals and to support tactical plans
tactical plan example
developing marketing plan for the foreign market
decision styles definition
distinctions among people with respect to how they evaluate problems, generate alternatives, and make choices
decision making step 6: evaluation and feedback
gather info to determine how well the decision was implemented and whether it achieved its goals
characteristics of optimizers
get personal satisfaction from being business owners
programmed decisions definition
involve situations that have occurred often enough to enable decision rules to be developed and applied in the future
joint venture definition
involved s strategic alliance or program by two or more organizations
confirmation bias definition
occurs when an individual searches for only evidence that will confirm his or her beliefs instead of evidence that might disconfirm them
what is achieve synergy
occurs when organizational parts interact to produce a joint effect that is greater than the sum of its parts acting alone
strategic goals definition
official goals; broad statement describing where the organization wants to be in the future, long term
standing plans definition
ongoing plans that provide guidance for tasks or situations that occur repeatedly within the organization
co working facility
open office environment shared by multiple freelance entrepreneurs as well as corporate telecommuting employees or others who don't have a regular office
external SWOT analysis includes
opportunities and threats
standing plans example
organizational policies, rules and procedures
advantages of franchise
owner provides management help known brand name reliable financial projections
Diversifitcation definition
strategy of moving into new lines of business
Internal SWOT Analysis includes
strengths and weaknesses
What is entrepreneurship?
the process of initiating a business venture, organizing the necessary resources, assuming the associated risks, and enjoying the rewards
tactical goals definition
the results that major divisions and departments within the organization intend to achieve
decision making step 5: implementation of chosen alternative
the use of managerial and persuasive abilities to ensure that the chosen alternative is carried out
sociologist argues that women have less access to capital because ...
they have to work harder to convince others that they have what it takes to be successful
Porter's Five Forces
threat of entry, threat of substitute, supplier power, buyer power, and competitive rivalry
characteristics of being a hard worker
thrive on the challenge of building a larger, more profitable business
what does it mean to think strategically
to take the long-term view and to see the big picture, including the organization and the competitive environment, and consider how they fit together
true or false: traditional minority owned retail stores and restaurants are being complemented by firms in financial services, software, insurance and online businesses
true
immigrants are almost ____ as likely as native born Americans to start a business
twice
business incubator
typically produces shared office space, management support services and management and legal advice to entrepreneurs
Partnership definition
unincorporated business by two or more people
Sole Proprietorship
unincorporated business owned by one person for profit
competitive advantage needs to be ___ to attract people to your organization
unique
Conceptual Style of Decision Making
use a broad amount of information to solve problems creatively
administrative model definition
use of a rational decision-making process within the limits of human and environmental factors
what does strategic management try to do
use the opportunities and threats in the environment to give us the competitive advantage
brainstorming definition
uses a face-to-face interactive group to spontaneously suggest as many ideas as possible for solving a problem
parts of personal decision style category of personal decision framework
directive analytical conceptual behavioral
characteristics of a partnership
easy to start use a formal partnership agreement unlimited liability often dissolve within 5 years
characteristics of sustainers
enjoy change to balance work and personal life
what does drucker say about objectives/goals
opposite of 'if you want it done right do it yourself' any business enterprise must build a true team. each member of the enterprise contributes something different, but they must all pull in the same direction and their contributions must fit together to produce a whole-- without gaps, without friction, without unnecessary duplication of effort.
globalization strategy defintion
uses standardized products and advertising worldwide
Coporate level strategy definition
The way a company seeks to create value through the configuration and coordination of multimarket activities
merger definition
Two or more firms coming together to form a new firm
example of cost leadership strategy
Wal-Mart
McDonalds earning well over ___ in sales annually
$2 million
franchise applicants for McDonalds must have a minimum of ___ available in liquid assets
$500,000
Source of New Business Ideas
- In-depth understanding of industry or profession - Market niche spotted - Brainstorming - Copying someone else - Hobby - Other
Stars (BCG Matrix)
-upper left quadrant) occur in high-growth markets and are high market share products. -often require a heavy resource investment in such things as promotions and new production facilities to fuel their rapid growth. -As their market growth slows, starts will migrate from heavy users of resources to heavy generators of resources and become cash cows. - ex: uber
Tools for putting strategy into action
-visible leadership -clear roles and accountability -human resources -candid communication
Why do managers make bad decisions?
1. Being influenced by initial impressions 2. Justifying past decisions 3. Seeing what you want to see
levels of goals and plans
1. Mission Statement 2. Strategic Goals/Plans 3. Tactical Goals/Plans 4. Operational Goals/Plans
managerial decision making process
1. Recognition of Decision Requirement 2. Diagnosis and Analysis of Causes 3. Development of Alternatives 4. Selection of Desired Alternative 5. Implementation of Chosen Alternative 6. Evaluation and Feedback
model of MBO process
1. Set goals 2. Develop action plans 3. Review progress 4. Appraise overall performance
steps of the organizational process
1. develop plan 2. translate the plan 3. plan operations 4. performance management 5. monitor and learn
how many firms were majority women owned in 2018
12 million
growth on immigrant entrepreneurs in the US from 1998-2016
13.7% --> 29.5%
how small is a small business
3 types: owner only 1-19 employees 20-499 employees
in 2019 how many people are immigrant entrepreneurs
3.2 million
what percentage of businesses are female owned
35.8%
there are ____ McDonalds located in more than 100 countries
38,000
what percentage of businesses are male owned
53.7%
how many people are employed in minority owned businesses
6.3 million
what percent of sources of start up capital for entrepreneurs are from personal savings
78%
what percent of businesses are equally owned by male and female
8.9%
franchise owners pay about __ of store revenue to McDonalds each year
82%
how many McDonalds are franchise operations
93%
business plan
A document specifying the business details prepared by an entrepreneur prior to opening a new business.
Key performance indicators (KPIs)
A tool used to assess what is important to an organization and how well the organization is progressing toward attaining its strategic goal, so that managers can establish lower-level goals that drive performance toward the overall strategic objective.
focus strategy definition
concentration on a specific region or buyer
example of co-working facility
Atlanta tech village
Traits of Entrepreneurs
Autonomy, Entrepreneurial Sacrifice, High Energy, Need to Achieve, Self-Confidence, Locus of Control, tolerance for ambiguity
differentiation strategy definition
Distinguishing an organization's products from the products of competitors on dimensions such as product design, quality, or after-sales service.
equity financing
Funds that are invested in exchange for ownership in the company.
example of unrelated diversification
Harley Davidson once tried to sell Harley branded bottled water
plan example
I can get dogs from the pound. there are so many abandoned animals; it will be quicker, less expensive and easier to get dogs from the pound instead of breeders
backward integration example
Netflix producing it's own content
examples of B corporations
Patagonia, toms, malala fund, etc
strategy execution
Putting strategy into action by adjusting various parts of the organization and directing resources to accomplish strategic goals
intuition (admin model) definition
Quick apprehension of situation based on practice and experience
personal decision framework
Situation + Personal Decision Style = Decision Choice
strategy formulation definition
The development of a set of corporate, business, and functional strategies that allow an organization to accomplish its mission and achieve its goals
what are the parts of a mission statement
Who: What: Where: When: Why:
anchoring bias definition
a cognitive bias that causes us to rely too heavily on the first piece of information we are given about a topic
evidence based decision making definition
a commitment to make more informed and intelligent decisions based on the best available facts and evidence
Microsoft mission statement
a computer at every desk and in every home
Strategic Business Unit (SBU)
a division, product line, or other profit center within the parent company
wicked decision problem
a highly ambiguous situation involving conflict goals and decision alternatives, rapidly changing circumstances, fizzy info, unclear links Among decision elements and the inability to evaluate whether a proposed solution will work There is no "right answer"
BCG Matrix
a means of evaluating strategic business units on the basis of (1) their business growth rates and (2) their share of the market
SWOT analysis
a planning tool used to analyze an organization's strengths, weaknesses, opportunities, and threats
certainty definition
a situation in which all the information the decision maker needs is fully available
strategy map
a visual representation of a company's critical objectives and the crucial relationships among them that drive organizational performance
overall goal of a strategy map
accomplish mission; create optimal value
single-use plans defintion
achieve objectives that are not likely to be reparented again in the future
what are MBOs based on
achievement of goals
business level strategy definition
an integrated and coordinated set of commitments and actions the firm uses to gain a competitive advantage by exploiting core competencies in specific product markets
decision making step 2: diagnosis and analysis
analyze underlying casual factors 5 why's
different parts of equity financing
angel financing venture capital firms crowd funding
goal example
any veteran who asks me for a dog will have one within one month of the request
forward integration example
apple moved into retailing
characteristics of effective goals
are specific and measurable, have a defined time period, cover key result areas, are challenging but realistic, are linked to rewards
corporation definition
artificial entity created by the state and existing apart from its owner
Analytical style of decision making
base decisions on all available rational data
classical model definition
based on rational economic assumptions and manager beliefs about what ideal decision making should be
mission statement provides ___
basis for development of all subsequent goals and plans
what does "B" corporation stand for
benefit corporation
decision making step 4: selection of desired alternative
best alternative is one in which the solution best fits the firm's overall goals and achieves the desired results using the fewest resources
parts of decision choice of personal decision framework
best solution to the problem
plan definition
blueprint for goal achievement specifying the necessary resource allocations, schedules, tasks and other actions
debt financing
borrowing money that must be repaid at a later date to start a business
electronic brainstorming definition
brings people together in an interactive group over a computer network, rather than meeting face to face
Coalition Management
building an alliance of people who support managers and influence efforts toward achieving goals
Decision definition
choice made from among available alternatives
satisficing (admin model) definition
choosing a "good enough" alternative
example of single use plans
closing a plant or major layoffs
Glocalization Strategy
combines global coordination to attain efficiency with local flexibility to meet needs in different countries
parts of a business level strategy
company forces profitability
aligned goals are ___
consistent and mutually supportive so that the achievement of goals at lower levels permits the attainment of higher-level goals
what is part of the business level strategy
consumer products unit biotechnology unit media unit
three levels of strategy in organizations
corporate level strategy business level strategy functional level strategy
what is part of the corporate level strategy
corporation
linked in mission statement
create economic opportunity for every member of the global workforce
what does social entrepreneurship focus on
creating social value by providing solutions to social problems with a secondary purpose of generating profit and returns
risk definition
decision has clear cut goals and good information is available but future outcomes associated with each alternative are subject to chance of loss or failure
Embeddedness definition
deep understanding and acceptance of organizational direction and purpose throughout the organization
contingency planning definition
define company response to be taken in the case of emergencies, setbacks, or unexpected conditions
strategic plans defintion
define the action steps by which the company intends to attain strategic goals also defines organizational activities and resource allocations
tactical plans definition
define what major departments and organizational subunits will do to implement the organization's strategic plan
goal definition
desired future circumstance or condition that the organization attempts to realize
planning definition
determining the organizations goals and defining the means for achieving them
decision making step 3: development of alternatives
develop alternative solutions that will respond to the needs of the situation
behavioral style of decision making
exhibit a deep concern regarding effect of decision on others
vertical integration definition
expansion into business that supply to business or are distributors
related diversification definition
expansion into new business related to existing business activities
unrelated diversification definition
expansion into new lines of business that are not related
debt financing characteristics
fam and friends personal credit cards bank loans finance companies small business administration
what is part of the functional level strategy
finance R&D manufacturing marketing
suggested process of starting an online business
find market niche create professional website choose domain name know when o pivot use social media
franchising definition
firm collects upfront and ongoing fees in exchange for letting other firms offer products and services under its brand name and using its processes
where is political model useful
for nonprogrammed decisions when conditions are uncertain, info is limited, and there is conflict about goals to pursue or action to take
scenario building definition
forecasting technique that looks at current trends and discontinues and visualizes future possibilities
uncertainty defintion
goals are known, but information about alternatives and future events is incomplete
related diversification example
google moves into AI
venture capital firms
group that invests money in new or expanding businesses for ownership and potential profits
multi-domestic strategy definition
handling of competition in each country remained independent of industry competition in other countries
characteristics of jugglers
high energy people who enjoy handling ever detail of their own business
traits not consistant with managers at large companies that are also those of entrepreneurs
high energy, tolerance for ambiguity
example of operational plans
hire employees for new foreign market
normative (classical model) definition
how a decision maker should make a decision
descriptive (admin model) definition
how managers actually make decisions in complex situations
what is specified in a formal partnership agreement
how partners share responsibility and resource how partners contribute expertise
what does a strategy map show
how specific goals and plans in each area are linked
what does MBOs ignore
how you got it done
what are the 5 types of small business owners
idealists, optimizers, hard workers, jugglers, sustainers
decision making step 1: recognition of decision requirement
identify the problem or opportunity
disadvantage of unlimited liability
if sued they can seize all your personal assets since you have unlimited liability
example of strategic plans
increase revenue through expansion into a foreign market
Legal-Political strategic thinking
inflation? interest rates? labor force participation?
disadvantage of franchise
lack of control franchisor dictates the price must purchase equipment, building, new product offerings
Dogs (BCG Matrix)
low market share, low market growth no investment keep if some profit consider divestment
nonprogrammed decisions definition
made in response to situations that are unique, are poorly defined and largely unstructured, and have important consequences for the organization
Sole Proprietorship characteristics
majority of business in US few legal requirements proprietor has total ownership and control owner has unlimited liability
tactical goals apply to what level of management
middle management
how many minority owned businesses are there in the US
more than 11 million
how do you incorporate in Georgia?
must go to Secretary of State in GA who will give you papers and then the state of GA will decide to recognize the company as a separate entity from yourself
traits consistant with managers at large companies that are also those of entrepreneurs
need to achieve, self confidence
Management by means (MBM)
new systemic approach that focuses attention on the methods and processes used to achieve goals
bounded rationality (admin model) definition
people have limits or boundaries on how rational they can be
Functional-level strategy definition
pertains to the major functional departments within each business unit, such as manufacturing, marketing, and research and development
portfolio strategy
pertains to the mix of SBUs and product lines that fit together in a logical way to provide synergy and competitive advantage
loss aversion definition
place a higher value on avoiding losses than on potential gain
strategy definition
plan of action that described resource allocation and activities for dealing with the environment, achieving a competitive advantage and attaining the organization's goals
____ forces the entrepreneur to carefully think through the issue and problems associated with starting a developing business
planning
goal + plan = ___
planning
Directive Style of Decision Making
prefer simple, clear-cut solutions to problems
crisis planning definition
preparing organizations, managers and employees to cope with catastrophic events that could destroy the firm
Crowdfunding
raising capital online from many small investors (but not through the stock market)
issue with classical model
rarely possible the way it is written
missions definition
reason for organizations existence
stretch goals definition
reasonable yet highly ambitious and compelling goals characterizes by both extreme difficulty and extreme novelty that energize people and inspire excellence
overview of launching a start up
start with an idea write a business plan choose a legal structure arrange financing
operational goals definition
results expected from departments, work groups and individuals
characteristics of an idealist
rewarded by change to work on something new and creative
what is an important component of operational plans
schedules
corporation characteristics
separate legal entity limits owners must pay taxes on its income provides continuity more complex paperwork can raise funds through the sale of stock to investors
what kind of companies is multidomestic strategy important for
service
Strategic Management definition
set of decisions and actions used to formulate and execute strategies that will provide a competitively superior fit between the organization and its environment so as to achieve organizational goals
the majority of small businesses have how many employees?
single employee, owner only
three types of legal structure
sole proprietorship, partnership, corporation
What is an entrepreneur?
someone who engages in entrepreneurship
what is exploiting core competence
something the organization does especially well in its comparison to its competitors
procedure in standing plans
sometimes referred to as standard operating procedure defines a precise series of steps to attain certain goals
Management by Objectives (MBO)
system whereby managers and employees define goals for every department, project, and person and use them to monitor subsequent performance
example of differentiation strategy
target
primary difference between programmed and unprogrammed decisions is...
the amount of certainty and risk
globalization strategy is based on...
the assumption that a single market exists for many consumer and industrial products
how to obtain certification of the B corporation
the business must pass an impact assessment which scores the organization on environment sustainability, community impact and transparency
Divestment defintion
the exit of a business from a firm's portfolio
Ambiguity definition
the goals to be achieved or the problem to be solved is unclear, alternatives are difficult to define, and information about outcomes is unavailable
what does MBM focus on
the process of achieving the goals
decision making definition
the process of identifying problems and opportunities and then resolving them
operational goals example
we will increase production by 10 percent per week to meet holiday demand
example of strategic goals
we will reduce our environmental footprint and continually seek out renewable resources to use in our products
example of tactical goals
we will reduce our market budget by $10,000
angel financing
wealthy individual who believes in a start-up provides personal funds and advice to help the business get started
competitive advantage definition
what sets the organization apart from the others and provides it with a distinctive edge for meeting customer or client needs in the marketplace
what is create value
willing to pay more money for a brand name even if it is the same as generic brand
risk propensity definition
willingness to undertake risk with the opportunity of gaining an increased payoff
how much revenue do minority owned businesses generate annually
$2 trillion
parts of internal business process goals in strategy map
- build good relationships with suppliers and partners - improve cost, quality and flexibility of operations - excel at innovative product development and next-generation market opportunities
how important is strategic management
-It determines which organizations succeed and which ones struggle -Strategic blunders can hurt a company
Innovative Decision Making
-Start with brainstorming -Use hard evidence -Engage in rigorous debate -Avoid groupthink -Know when to bail -Do a postmortem
SWOT analysis for Kroger company: threats
-aggressive expansion of nontraditional rivals such as Walmart, target and amazon into the grocery business -intense competition may push for price cuts -uncertainty caused by COVID-19 pandemic
SWOT analysis for Kroger company: strengths
-broad geographic distribution -broad array of products and services -strong line of private label brands
characteristics of a business plan
-clear, compelling vision -clear, realistic financial projections -profile of potential customers and target market -details about the industry and competitors -evidence of an effective management team -good formatting and clear writing -short -critical risks -sources and uses of start-up funds and operating funds -summary
what do you when planning operations
-define operational goals and plans -select measures and targets -set stretch goals -crisis planning
reasons for failed execution
-employee resistance -manager behavior doesn't support new direction -inadequate budget or resources -other barriers
SWOT analysis for Kroger company: opportunities
-expand customer service experience, including online sales -increase shelf space for private label brands and organic food -address growing customer concerns over food waste and plastic use
MBO benefits
-focuses manager and employee efforts on activities that will lead to goal attainment -can improve performance at all company levels -improves employee motivation -aligns individual and departmental goals with company goals
bright prospect (BCG Matrix)
-high business growth rate, low market share -new ventures -risky -a few become starts, others are divested
SWOT analysis for Kroger company: weaknesses
-high debt load complicated -manufacturing and distribution networks -slow start on digital ordering technology
what do you when monitoring and learning
-hold planning reviews -hold operational reviews
reasons for starting a business
-joined family business -to control my future -to be my own boss -to fulfill a dream -downsized or laid off
Cash Cows (BCG Matrix)
-low business growth, high market share -milk to finance bright prospects and stars
components of performance management
-management set by objectives -single use plans -standing plans
how does coalition management work
-modify goals by time or location -address conflicts with debate and dialogue -break down barriers and promote cross-silo cooperation
rule definition
-narrow in scope -describes how a specific action is to be performed -may apply to specific setting
assumptions of classical model
-problems are defined -results are calculates -selects alternative with maximized economic return -decision maximized attainment of organizational goals
benefits of planning
-produce a source of motivation and commitment -guide to action -set a standard of performance
parts of situation category of personal decision framework
-programmed/nonprogrammed -classical, admin, political -decision steps
parts of learning and growth goals in strategy map
-promotes employee development via ongoing training - enable continuous learning and knowledge sharing - cultivate a culture of innovation and high performance
project definition
-set of plans for attaining a one-time goal -smaller in scope and complexity than a program -often one part of a larger program
Elements of Competitive Advantage
-target customers -achieve synergy -create value -exploit core competence
which decision style is typical of upper management
conceptual
cost leadership strategy
aggressively seek efficient facilities, cost reductions, and cost controls (not talking about price)
sociocultural strategic thinking
aging population? remote work? quiet quitting?