COMM 210 - Contemporary Business Thinking Midterm

First Mover

A company that makes the necessary investment to dominate the industry.

Critical thinking =

Analyzing the validity of arguments presented in a text

Theory on internal resources and capabilities

Barney

Theory on organization/business Success

Chandler

Theory on Company vision

Collins & Porras

Theory on evolution/growth of organizations

Greiner

Economies of scale (Chandler)

Large plants can produce products at a much lower cost than small ones because the cost per unit drops as the volume of output rises.

Economies of Scope (Chandler)

Large plants can use many of the same raw and semi-finished materials and intermediate production processes to make a variety of different products.

Horizontal Integration

Purchase or merger with competitor.

Vertical Integration

Purchase suppliers or customers.

Entrepreneurial Enterprise

Thinking lean like a small company while being big.

For firms to benefit from economies of scale/scole (Chandler's claim)

-Flow of materials must be kept constant -National (and international) marketing and distribution functions must be created -Teams of lower and middle managers need to be recruited

5 Steps in critical thinking

-Identify the author's major conclusions -Describe & evaluate supporting evidence -Uncover assumptions & values -Determine soundness of causal logic -Deconstruct use of persuasive language

Chandler's secondary claims

-Once a firm loses the opportunity to be a first mover, it is difficult to regain competitive advantage -Entrepreneurial companies that do not make investments to create organizational capabilities cannot achieve long-term success But -Growth through unrelated diversification is a poor corporate strategy -Business ownership patterns have diminished the likelihood of many firms' long-term success