MGMT test #!
team leaders
Facilitate team activities toward accomplishing a goal Help team members plan and schedule work, learn to solve problems, and work effectively with each other Manage internal and external relationships
business level strategy
the determination of how a company will compete in a given business and position itself among its competitors about what is carving out a competitive advantage and profit
environmental complexity
the number and the intensity of external factors in the environment that affect organizations simple vs complex environments
environmental change
the rate at which a company's general and specific environments change stable environments = slow rate of change dynamic environment = fast rate of change
contingency planning
the systematic assessment of the external environment to prepare for a possible range of alternative futures for the organization
what did Monsanto fail in?
their stakeholder management allowed Bater to purchase them because had such bad press had problems with roundup and lost verdict in CA right as merger was done a bunch of cases (said caused some form of lymphoma) bad corporate merger acquisition for Bayer Bayer set up $10.9 billion to settle lawsuits
airline industry
threat of entry is relatively high (barriers to entry low) bargaining power of suppliers = high threat of substitute is pretty low bargaining power of customers is high
GMO
tomatoes, potatoes, salmon, pest stuff
pyramid from top to bottom of managers:
top managers middle managers first line managers team leaders
T/F: apple has a strong competitive advantage
true
T/F: strategy has to be contextually relevant
true
T/F: yahoo has a competitive disadvantage
true had first mover advantage but never could captivate/get competitive advantage
T/F: companies that are more efficiently managed are better inoculated from having to furlough or lay off people
true makes companies more resilient
sustainable competitive advantage components
valuable resources rare resources imperfectly imitable resources (can't copy) non-substitutable resources
what is strategy viewed as?
viewed as a framework or tool for managers to allocate resources and evaluate activities rather than a fixed plan
management
working with and through a group of people to accomplish a desired goal or objective in an efficient and effective manner about administration
stakeholder view
A business framework that identifies and analyzes multiple groups that interact with the firm and attempts to align organizational practices to satisfy the needs of these various groups. instrumental vs normative
scenario building
forecasting the likely result that might occur when several events and stakeholders are linked together
resource scarcity
the degree to which an organization's external environment has an abundance or scarcity of critical organizational resources
bureaucratic organization structure
- proposed by Max Weber - a clear differentiation of tasks and responsibilities - coordination through strict hierarchy of authority and decision rights - standardization of rules and procedures - vertical separation of planning and execution (plans are made in the upper ranks of an organization and executed in the lower ranks)
Building Contextual Intelligence
-develop appreciation and awareness of history -stay attuned to trends in environment -seize firsthand experiences -engage in scenario assessment
The four market structures
1. Perfect Competition 2. Monopolistic Competition 3. Oligopoly 4. Monopoly
management is
1. a language of business 2. the inverted pyramid (see notebook -- from top to bottom it goes strategy, organizational design, leadership, and control -- get macro to micro) 3. a collection of concepts and tools that are intended to assist managers in anticipating and avoiding the challenges and dilemmas that confront today's companies
6 elements define management
1. control 2. leadership 3. strategy 4. global and ethical context 5. organizational design 6. strategic control
uncertainty as a function of:
1. environmental change (stable vs dynamic, punctuated equilibrium) 2. environmental complexity (number of contextual factors in the environment, ex. resource scarcity)
strategic framework elements (in order)
1. external environment 2. internal environment 3. vision and mission 4. objectives 5. strategy formulation 6. strategy implementation
changing perceptions of the firm and business environment
1. managerial view 2. shareholder view 3. stakeholder view (prevailing view today)
theories of management (organizational design)
1. scientific management 2. human relations movement 3. contingent view
Porter's Five Forces Model
1. threat of new entrants 2. bargaining power of suppliers 3. threat of substitutes 4. bargaining power of customers all feed into the rivalry among existing competitors
what questions are asked in the strategy development process?
1. what is the purpose of the business 2. how will environmental forces impact our firm 3. what stakeholders are important 4. in what business or areas will we compete 5. who will we serve 6. how to distinguish our firm from competitors
shareholder view
A business framework where the job of top managers is to produce the highest possible stock market valuation of the firm's assets.
scientific management
A focus on how jobs, work, and incentive schemes could be designed to improve productivity using industrial engineering methods
VUCA
An acronym for volatile, uncertain, complex, and ambiguous that captures the context in which today's organizations compete.
BHP Tintaya Copper Mine case
BHP bought Tintaya copper mines in Peru and had no understanding of cultural and socioeconomic problem
top managers
CEO, COO, CFO, CIO, CTO monitor business environment in charge of overall direction of organization: 1. mission, purpose, values 2. organizational objectives 3. organizational strategy 4. organizational metrics create context when things change develop employees commitment to ownership of company performance
macys current event
COVID may have permanently changed the retail/e-commerce landscape slow death of indoor shopping malls in the uS has been accelerated by COVID the challenge then is for companies to either pivot and adapt or go bankrupt sears, k-mart, JCPenny, are examples of companies who couldn't pivot fast enough macy's is trying to survive by focusing on the e-commerce business and will scale back brick and mortar locations promoting more beauty and home items open a number of smaller front store away from malls in the next two years moves to shut down hundreds of underperforming stores due to lack of mall traffic test smaller Bloomingdales stand alone stores
organizational design
Developing and aligning organizational components to achieve strategic objectives the manner in which a business is aligned and structured to compete in the changing contextual landscape key questions: what organizational structure will enable the firm to optimize its resources? how can the culture of a firm reinforce key values and lay the foundation for strong organizational performance? how will performance be measured? how does an organization remain relevant and competitive in a constantly competitive landscape?
leadership skills
Differ according to person's level and responsibilities in the organization technical skills are important early in career more strategic abilities are required as an individual advances in an organization
perfect competition
Large number of firms produce the same product barriers to entry are low no single producer controls pricing may be the most theoretical ex. wholesale agricultural markets don't want perfect competition
leaders vs managers
Leaders -Set direction, align people, motivate and inspire Managers -plan & budget, organize and staff, control and problem solve
Three Generic Strategic Approaches
Low-cost strategy Differentiation strategy Focused strategy
threat of new entrants
New entrants increase rivalry and reduce profits
middle managers
Plant manager, regional manager, divisional manager set objectives consistent with top management's goals implement subunit strategies for achieving objectives plan and allocate resources to meet objectives\ coordinate and link groups, departments, and divisions monitor and manage subunits and individual managers
strategy
Pursuing a set of unique activities that provide value to customers; making trade-offs about which businesses to pursue, what products to produce, and which customers to serve; and aligning resources to achieve organizational objectives
stakeholder mapping process
Step 1: Map stakeholder relationships with the firm Step 2: Identify specific subsets within stakeholders Step 3: Determine stakes for each stakeholder Step 4: Define connections between stakeholders
human resources movement
The belief that organizations must be understood as systems of interdependent human beings who share a common interest in the survival and effective functioning of the firm
Corporate Planning
The need to understand the competitive landscape led early business leaders to focus on corporate planning became popular post WW2 era planning process involved the development of detailed forecasts and business level goals and objectives
strategic review process
The process by which senior leaders of a corporation meet with business unit managers to review progress toward specific goals.
corporate level strategy
The way a company seeks to create value through the configuration and coordination of multi-market activities what mix of industries do we want to be in
contingent view
a view of the firm where effective organizational structure is based on fit or alignment between the organization and various aspects in its environment
managerial view
a business framework where the firm is seen as a mechanism for converting raw materials into products to sell to customers
organizational strategy
a function of environment (context) depends on: 1. nature and context of competitive and environmental landscape 2. skills and capabilities of the management team
monopolistic competition
a market structure in which many firms sell products that are similar but not identical firms use product differentiation to distinguish their product from competitors firms have some impact on pricing and there is no price competition barriers to entry are weaker which allows new firms to enter the industry when sufficient profits exist describes most markets in the US which multiple firms participate
environmental scanning
a tool that managers use to scan the business horizon for key events and trends that will affect the business in the future use SWOT analysis
trend analysis
a tool where key variables are monitored and modeled to help predict a change that might occur in the environment
contextual intelligence "the goal"
the ability to understand the impact of environmental factors on a firm and the ability to understand how to influence those same factors
strategic inflection points
all industries have them "a time in the life of a business when its fundamentals are about to change" ex. digital cameras (phones replaced) and the business has been devastated
how did google protect itself against the rise of mobile computing?
android operating system
instrumental stakeholder view
companies/managers are using the view purely to be better managers to increase stakeholder value
overarching goal
competitive advantage we want a sustainable competitive advantage (goal is to avoid perfect competition)
punctuated equilibrium theory
companies and industries cycle through stable and dynamic environments
top executives
conceptual skills good example is steve jobs
what did monsanto lack?
contextual intelligence
Example of sustainable competitive advantage
ex. Sony supplies sensor images 1 rival (omni vision) but omni vision hasn't figured out how to mass produce
how did Delta respond to resource scarcity?
delta bought a jet fuel refinery called a cracking black (vertical backward integration)
does beer have a dynamic or stable industry?
dynamic
success in the global business environment requires
effective management + skillful leadership
Frontline Supervisor
entry level technical skills
ESG
environmental social governance
CRISPR
genetically modified animals
Monsanto case
genetically modified food/tech company even though people are suspicious of GM crops it hasn't stopped their spread public "leery" of this technology for a while it was quiet but then the GMO wars started up latest fight is over food labeling debate is on the impact of GM crops on the environment (questionable) but how they affect human health is more clear (no evidence GM crops are unsafe to eat) for a while Monsanto just focused on genetically engineered seeds and crops but it recently has "broadened their scope" biggest shift = moving into computing it has bought companies and began offering software and hardware products to gather and process info relevant to a farmer (data about temperature, rain, soil, seeds, and pests) Monsanto executives say that all they do is aimed at making farming more efficient and environmentally friendly their critics do not agree they say they are all about profit and have a problematic history one of their largest labs has so much square feet, uses so much energy, etc. so not good for the environment is the argument
What is management?
getting work done through others efficiency = getting work done with a minimum effort, waste, or expense effectiveness = accomplishing tasks that help fulfill organizational objectives
Porter's Five Forces concepts
greater the rivalry, less opportunity for profits (lower prices) easier entrance, greater the rivalry, downward force on your pricing options greater bargaining power of your suppliers they charge higher prices you get less profits substitute products = threat of substitute, greater the options, means less profit bargaining power of customers is high, lower prices, get lower profit
Wells Fargo articles
high pressure sales culture spiraled out of control opened as many as 2 million deposit and credit card accounts without customer knowledge they did some investigations and fired some employees after they were fined $185 million for "widespread" illegal practices very focused on employees reach "sales goals" appeared to place blame on lower level employees said there will be enhanced training, monitoring, and controls made managers bonuses dependent on the degree to which the sales goal was being achieved and the managers in turn began checking their peoples progress and put pressure began sidelining people who complained about the pressure
normative stakeholder view
implying some obligation and duty, some ethical obligation
book definition of management
the act of working with and through a group of people to accomplish a desired goal or objective in an efficient and effective manner
development
is the long term process designated to build greater self-awareness, enhance managerial capabilities, and enable individuals to reach his/her potential
cumulative advantage
layer that a company builds on its initial competitive advantage by making its product/service over more instinctively comfortable choice for the consumer
stakeholders of the firm
local community shareholders customers advocacy groups competitors media natural environment employees supplies government
low vs high uncertainty
low requires less vigilance of contextual forces less adaptation high uncertainty is opposite
management skills
managers focus on financial reporting, planning, recruiting of talent and team development middle level managers focus on interpersonal skills, developing teams, and using conceptual skills senior executives set the vision and agenda for the organization as well as oversee strategic execution
barriers to entry
obstacles to competition that prevent others from entering a market sources: 1. supply side economics of scale 2. demand side economics of scale 3. customer switching costs 4. capital requirements due to scale of entry 5. incumbency advantages independent of size 6. unequal access to distribution channels 7. restrictive government regulations
first-line managers
office manager, shift supervisor, department manager train and supervise the performance of non-managerial employees encourage, monitor, and reward employees performance make detailed schedules and operating plans
pure monopoly
one firm in a market can dictate pricing without real threat or competition theoretical more so ex. utilities
historical strategy of walmart
open stores in semi rural markets to provide variety and competitive prices to customers who previously relied on a host of smaller stores to shop over the past two decades Walmart has changed the mix of its retail stores opening more super centers that offer groceries, retail, etc. despite its growth it has struggled to expand into Vermont and CA
has the demise of competitive advantage been dramatic?
people say it is unrealistic but now saying that it is based on a "cumulative advantage"
business environment
the combination of all contextual forces and elements in the external and internal environment of a firm today's business environment is infinitely more complex than it was just a few years ago
understanding contextual landscape depends on a firm's ability to:
recognize the threats and opportunities lead and organize resources to effectively compete in the marketplace accurately assessing and effectively responding to your environment is the threshold task (most important one)
contextual intelligence
relationship between contextual intelligence and the management and avoidance of crisis
oligopoly (duopoly)
relatively few firms offer similar products these firms dominate the market and have considerable market power often there are strong barriers to entry including high startup costs and economics of scale firms sometimes collude to maintain high prices ex. commercial aircraft industry
Resource View
resources that each firm has that have a sustainable competitive advantage certain characteristics: assets, capabilities, processes, employee time, info, and knowledge that an organization controls the goal: use company resources to provide greater value for customers than competitors can, creating a sustainable competitive advantage
search engine (indexing internet pages and employing complex and select algorithms for the organization and display of those pages in response to a search query) monetized its search engine and has dominant position in the market for serving ads onto websites owns youtube android 92.9% of all search engine market share
Inglewood CA problem for walmart
serious opposition from city council walmart execs were confused why a town wouldn't want something that created so many jobs and tax revenue another problem was with local grocery stores opposed it because if Walmart entered their prices would have to drop so the grocery stores started to cut wages and healthcare benefits so then the UFCW put pressure on city council to block Walmart from coming in used to face little opposition but now facing more and more shows how complicated managing/leading is in today's business environment -- managers are responsible for more than just generating profit -- they also have to understand the needs of a variety of key constituents including its employees and broader community
walmart case
shift from owing a duty only to shareholder to owing a study to various stakeholders difficult to manage the firms stakeholders and environment makes it very difficult by responding to stakeholders concerns, the manager can drive the firms performance and achieve a competitive advantage in the marketplace failing to understand the complexity of various stakeholders can have disastrous consequences (as evidenced by Walmart's attempt to enter the Inglewood, CA market)
what problem was Walmart slow to realize?
socioeconomic problem turned into a business problem/$ problem
what is the alpha activity for business?
strategy strategy is macro, big picture
SWOT analysis
strengths, weaknesses, opportunities, threats look at internal and external
middle manager
technical and interpersonal skills
leadership
the ability to drive change and innovation through inspiration and motivation about driving change