Management 310- LATech Dickerson (Test II)

Corporate-level strategy asks

"What business are we in?"

Freed trade agreeements matter to

-Consumers increasing choices, competition, and purchasing power and increasing prices -managers, because it creates more business opportunities and intensifies competition

What not to do during refreezing

-Declaring victory too soon -Not anchoring changes in the organization's culture

Five Aspects to Experiential Approach

-Design Iterations- Cycle of testing -Testing- Comparison -Milestones- Formal review points -Multifunctional teams- composed of employees from different areas -Powerful leaders- keep process focused

Methods to manage resistance to change

-Education and Communication -Participation -Negotiation -Top-Management Support -Coercion

Why do firms expand globally

-Gain access to resources -Skills of foreign employees -Attract more customers

General Agreement on Tariffs and Trade (GATT)

-In effect from 1947-1995 -Helped more than 120 countries increase trade by reducing tariffs and other barriers -Replaced by the World Trade Organization

Experiential Approach Assumes

-Innovation is occurring within a highly uncertain environment -The key to fast product innovation is to use intuition, Flexible options, and hands-on experience to reduce uncertainty and accelerate learning and understanding

What not to do during Change

-Lacking a vision for change -Under communicating the vision -Not removing obstacles to the vision -Not systematically planning for and creating short-term wins

What not to do during Unfreezing

-Not establishing a great enough sense of urgency -Not creating a powerful enough coalition

Five Aspects of Experiential Approach

-Planning- Emphasizes generational change (new technology works with the old technology) -Supplier Involvement- alternative sources of ideas -Shorting the times of individual steps overlapping steps -Multifunctional teams

Two main topics of global business

-The impact of global business on US business -How and when companies go global

Strategic moves of direct competition

Attack and Response

North American Free Trade Agreement

Began in 1994 and increased trade among Canada, Mexico, and the US

Technology Cycles

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

Nonsubstitutable-

Can't be replaced

Pitfalls of planning

Cause slow or needed adaption Can create a false sense of certainty Detachment of planners

Components of creative work environments

Challenging work (creates flow) Org. encouragement Supervisory encouragement Work group encouragement Freedom Lack of organizational impediments

The "Five Forces" determined the overall level of competition in an industry

Character of the rivalry Threats of new entrants Threat of substitute products or services (How easy it is to enter market) Bargaining power of suppliers Bargaining power of buyers

Relying on what brought success and uncertainty about the future can lead to...

Competitive inertia

Positioning Strategies

Cost leadership, Differentiation, Focus

Goal of Experiential Approach

Create a new dominant design (build something new, different, and substantially better)

Adaptive Strategies

Defenders, Prospectors, Analyzers, Reactors

Forms of Global Business

Direct Foreign Investment Exporting Licensing Franchise Strategic Alliance (Joint Venture

Tariffs

Direct tax on imported goods

Boston Consulting Group Matrix

Disadvantages- Evidence that acquiring unrelated business is not useful (related diversification is least risky) Dysfunctional consequences can occur when companies are categorized This approach can weaken the cash cow (loss of employee resources and morale

Dissolution Stage

Dissolved through Bankruptcy or selling off assets (Not Reversible)

Assess need for strategic change with SWOT analysis

Does our firm need to change our strategy to sustain competitive advantage?

9 Was to become more creative

Doodle something Sign up for a class in something you have never done before Create the Right environment Pause the brainstorming and move your body Start a sketchbook Keep toys on your desk Engage in Flash Fiction Try the 30 Circles Test Role-Play Away

Managers must be good at managing innovation in two circumstances

During discontinuous change, Companies must find a way to anticipate and survive technological changes After a new dominant design emerges, companies must manage the process of incremental improvement and innovation

Products with high tariffs

European Edibles (100%) Chinese paperclips (125%) Imported Tobacco (350%) Chinese Tires (35%)

Stability-

Even growth & shrinking

Growth-

Expanding in market

Blinded Stage

Failure to recognize changes that will harm them (Reversible)

Firm level strategies ask themselves...

How should we complete against a particular firm

Imperfectly imitable-

Impossible or costly to duplicate or imitate

Valuable-

Improve efficiency & effectiveness

Benefits of planning

Increased effort Persistence (working hard for long periods) Direction Encourages the development of task strategies

Organizational Innovation

Is the successful implementation of creative ideas

Compression Approach Goal

Lower costs and create incremental improvements in the performance and function of the existing dominant design as quickly as possible

Portfolio Strategy

Makes use of diversification (various businesses or product lines) to minimize risk. More businesses means smaller overall chance of failing. Unrelated diversification reduces risk even more. Investing the profits and cash flows from mature, slow-growth businesses into newer faster-growing businesses reduces long-term risk.

Direction Competition

Market commonality Resource similarity

Inaction Stage

May recognize problem, but take no action (Reversible)

Crisis Stage

Must reorganize to avoid dissolution or bankruptcy (Reversible)

Rare-

Not controlled or possessed by many

Bottom level strategic planning focuses on:

Operational plans = day-to-day plans single-use plans

Creative Work Environments

Organizational Encouragement Supervisory Encouragement Work Group Encouragement Freedom Lack of Organizational Impediments Challenging Work

Rational Decision Making Steps

Problem Identify decision criteria Weigh the criteria Generate alternative courses of action. Evaluate each alternative. Compute the optimal decision.

Question marks? Stars? Dogs? Cash cows?

Problem child iPhone Businesses that are struggling Businesses that bring in a lot of money, solid product

Competitive advantage

Provides greater value for customers than competitors can

Non Tariff Barriers

Quotas Voluntary export restraints Government import standards Subsidies Customs classification

Assessing the need for strategic change - Does our firm need to change our strategy to sustain competitive advantage?

Relying on what brought success and uncertainty about the future can lead to competitive inertia Need to actively look for signs of strategic dissonance

Strategic reference point theory → managers choose between two alternatives

Risk-avoiding strategy Risk-seeking strategy

What pattern does technology cycle follow

S-Curve

Government import standards

Safety measures

Retrenchment-

Scaling back

How to make a plan that works

Set goals Develop commitment Develop effective action plans Track progress Maintain flexibility

The best goals are

Specific (not "do your best") Difficult, but not too difficult Those you are committed to

Need to actively look for signs of...

Strategic dissonance

SWOT

Strength, Weakness, Opportunities, Threats SW= internal OT= external

Middle level strategic planning focuses on:

Tactical plans are how a company will use resources, budgets, & people to accomplish specific goals

Faulty Action Stage

Take actions to cur costs and increase efficiency (Reversible)

Contingency Management

The idea that there is no one right way to manage; "it depends"

Lewin's Process to change

Unfreeze, Change, Refreeze

To obtain a sustainable competitive advantage, a firm's resources must be:

Valuable Rare Imperfectly imitable Non-substitutable

To formulate effective strategies, companies must be able to answer these questions:

What business are we in? How should we compete in this industry? Who are our competitors, and how should we respond to them?

Developing Countries

a country having a standard of living or level of industrial production well below that possible with financial or technical aid; a country that is not yet highly industrialized

organizational Development is

a philosophy and collection of planned change interventions designed to improve an organization's long term health and performance

Rational decision making =

a systematic process in which managers define problems, evaluate alternatives, and choose optimal solutions that provide maximum benefits to their organizations

Multinational Corporations

are businesses that own business in two or more countries (103,000 MC companies) 9.4% based in US 71% based in developed countries 29.3 based in developing countries

Innovation Streams

are patterns of innovation over time that can create sustainable competitive advantage

Decision making =

choosing a solution from available alternatives

Customs classification

classifications by US Customs and Border Patrol can increase or decrease tariffs

Organizational Decline occurs when...

companies do not anticipate, recognize, neutralize, or adapt to the internal or external pressures that threaten their survival They do not recognize a need for change

Change forces

differences in the form, quality, or condition o an organization over time

Characteristics of innovation streams

dominant design, Design Competition, Incremental change, and technological lock out

Voluntary export restraints

exporting country "voluntarily" limits, usually due to pressure

Compression Approach is used to manage...

innovation in more certain environments during periods of incremental change

Planning

is choosing a goal and developing a method or strategy to achieve that goal

Global Business

is the buying and selling of goods and services by people from different countries

Where does innovation come from?

it comes from great ideas (creativity)

Trade agreemems help

keep international trade less costly and more possible

An options-based approach:

keep options open by making small, simultaneous investments in many alternative plans Maintain slack resources (extra time, people, money, or production capacity)

Quotas

lims on number of products imported

Action plan

lists the specific steps (how), people (who), resources (what), and time period (when) for accomplishing a goal

Subsidies

loans, grants, tax breaks to domestic businesses

Top level strategic planning focuses on:

long-term planning on how the company will serve customers & position itself against competitors

Trade Barriers

make it more expensive or difficult for consumers to buy or consume imported goods

Experiential Approach

managing innovation during discontinuous change

Compression Approach

managing innovation during incremental change

Local adaptation

modifies procedures to adapt to differences in foreign customers, governments, and regulatory agencies

Resistance to change is

opposition to change resulting from self-interest, misunderstandings and distrust, and general intolerance for change.

Sustainable competitive advantage -

other companies cannot duplicate the value a firm is providing to its customers

Two major approaches to corporate-level strategy:

portfolio strategy and grand strategy

Trade barrier goal

protectionism

Global Consistency

same rules, guidelines, policies, and procedures in place in any country they operate

Strategic reference points are

the strategic targets managers use to measure whether a firm has developed the core competencies it needs to achieve a sustainable competitive advantage

Distinctive competence-

what a company can make, do, or perform better than others