Management

line management

formal authority and responsibility for management of organization. valuable source for inside info. Must execute the plans developed

escalation of commitment

managers will stick to their decisions even after they appear to be wrong

multidomestic strategy

manages itself as independent operating subsidiaries. customizes products campaigns and operation techniques to meet needs of locals

location departmentalization

groups jobs on geographic areas. Advantages: responds easily to customer and environment. Disadvantages: larger admin

strategy implementations

methods where strategies are executed

resource deployment

how well it distributes resources

analyzer strategy

maintain current businesses and innovative in new businesses combining elements of prospector and defender, Protect base and enter new markets

decision making under uncertainty

most of major decisions does not know all alternatives or all risks or all consequences. Must get all info and approach from a logical perspective, intuition, judgment, & experience

Home replication strategy

used firm specific advantages used at home in foreign markets

Standing plans

used for activities that recur regularly over time

Delphi groups

used to develop a consensus of exper opinions experts contribute individually, away from group, and with their opinions combined with explanations, they average them out and decision is made

global strategy

views world as single marketplace. standardized goods

Differentiation strategy

distinguishes itself from competitors

Overall cost leadership strategy

gain competitive advantage by reducing costs

Strategical plans

general plan outlining decisions of resource allocation, priorities, and action steps to reach goals. Set by board of directors and top management

nominal groups

group of experts, they do not talk to each other freely, they write it down on a piece of paper and tak turns sharing ideas, vote on best decision

global efficiencies

location efficiencies, locate facilities anywhere that has lower labor costs or distribution costs.

Single use operational plans

Developed to carry out an action not likely to be repeated

Porter's generic strategies

Differentiation strategy, overall cost leadership strategy, focus strategy

functional departmentalization

groups jobs involving same activities. advantages: department staffed by experts & managers need to know small set of skills. Disadvantages: decisions are slower, think too narrowly instead of whole organization

cost Leadership Strategy

how products can meet needs at low costs

Product life cycle

-Introduction stage: demand high, focus on producing -Growth stage: sales grow, ensure quality, delivery, differentiation -Maturity stage: demand slows down, costs low and product differentiation -Decline stage: demand decreases, sales drop

Disadvantages of unrelated diversification

1) 1 manager does not know enough about different kinds of businesses 2) fail to exploit important synergies making them at a competitive disadvantage

Parts of delagation process

1) assign responsibility 2) grant authority 3) establish accountability

Four action points

1) develops basic plans 2) plan put into effect 3) specifies certain indicators saying event is about to take place 4) successful completion of original or contingency plan

Executing tactical plans

1) needs to evaluate every course of action possible 2) decision maker has info and resources they need to do job 3) monitor on going activities derived from plan

purposes of goals

1) provide guidence and a direction 2) promotes good planning 3) source of motivation for employees 4) mechanizm for evaluation and control

Steps in rational decision making

1) recognize and define situation, sees a decision has to be made 2) identifying alternatives, obvious and creative alternatives desired 3) evaluating alternatives, evaluated to determine feasibility and satisfaction 4) selecting best alternative, consider all factors 5)implement chosen alternative 6) follow up to see if working

developing tactical plans

1) recognize that it must address goals derived from strategic goal 2) tactics must specify resources and time frames and activities it will do 3) use of human resources

Advantages of related diversification

1) reduces dependence on one activity and reduces risks 2) reduce overhead cost 3) allows exploit of strengths and capabilities

Formal goal setting process

1) tell subordinates what top managers established 2) meet with subordinates and give them goals 3) give deadlines 4) meet quarterly 5) discuss what goals were met

benefits of specialization

1) workers become efficient at small tasks 2) transfer time between tasks decreases 3) more narrowly defined, easier to develop equipment to assist 4) employee is absent, manager can train someone new

Classical model of decision making

have conditions that rarely ever exist 1) decision makers have all info about decision and alternatives 2) they can eliminate uncertainty to acheive a decision condition of certainty 3) they evaluate all aspects of decision logically and rationally

Emergent strategy

pattern of action developing over time with no missions or goals

job enlargement

perform a wide variety of tasks but training costs increase, unions argue pay should increase and work is still boring

types of decisions

programmed and non programed decisions

defender strategy

protecting its markets maintaining stable growth, serving current customers by lowering cost and improving performance

Worldwide learning

pursuit of global inefficiencies or multimarket flexibilities may stifle firm's attempts to worldwide learning.

Prospector strategy

innovative firm constantly finding new markets, opportunities, and looking for growth and risk taking

coalition

informal alliance of individuals or groups formed to achieve a goal

Alternatives to specialization

job rotation, job enlargement, job enrichment, job characteristics, work teams

job characteristics approach

jobs should improve along skill variety, task identity, task significance, autonomy, and feedback

single product strategy

just one product or service sold in a single market (like WD-40)

cash cows

large share not expected to grow

stars

largest share of quickly growing market, invest

projects

less scope and complex, part of broader program or used for single use plan, Sometimes own manager, schedule, etc

Bounded rationality

limited by their values and unconscious reflexes and habits. And not complete information and knowledge.

Planning task forces

line managers with a special interest in planning create task force to help decelop plans

Economies of scale

lower products costs

economies of scope

lowering production and costs, enhancing bottom line

decision making under risk

more common, state of risk is estimated the amount of costs or pay off from a set of alternatives, lots of chance for bad decisions

interacting groups

most common form of group decision making, team is asked to make decision, can be hoc committees, task forces or newly constructed teams

reactor strategy

no consistent strategic approach. drifts with environmental changes

diversification

number of different businessses that an organizatino is engaged in

Related diversification

operating in several different linked businesses

tactical planning

organized sequence of steps designed to execute strategic plans

Standing operation procedures

outlines steps to be followed in certain circumstances

Advantages of unrelated dicersification

Stable performance, allocate capital to max corporate performance

satisficing

rather than conducting a search for best alternative, they tend to search only until they find an alternative that meets standard of sufficiency

crisis management

set of procedures organization used in disasters or unexpected events

Strategy formulation

set of processes involved in creating strategies

PRograms

single use plan for a large set of activities, identifying procedures for a new product line opening new facilities changing mission statement

dogs

small share not expected to grow

question marks

small share of quickly growing market, invest carefully

Distinctive competences

something the organization does well

Decision making

specific act or process. act of choosing one alternative from many alternatives

Policies

specifies organizations general response to a problem or situation ex) not accepting anyone into a college with SAT under 1200

Scope

specifies the range of markets

decision making under certainty

state of certainty exists when they know what alternatives are and their consequences, very uncommon

deliberate strategy

a plan is chosen to support goals, know what they are doing by making a product or etc

programmed decision

structured or recurs with frequency, like buying the same amount of supplies

Customer deparmentalization

structures activities to interact with customers Advantage: skilled specialist to ddeal with customer

decentralization

systematically delagation power to middle and lower level managers

Purpose of formal goal setting

to give subordinates a voice in goal setting so they know what they need to accomplish

executive committee

top executives working together as a group to provide input on proposals

First step of planning

understanding environment

nonprogrammed decisions

unstructured and less often, like buying out another company

Unity of command

eash person must report to one boss

BCG Matrix

Framework for evaluating performance. Prescribed preferred distribution of cash and other resources used two factors, growth rate and organizations share of market

strategic alternatives for international business

Home replication strategies, multidomestic strategy, global strategy, transnational strategy

Barriers to goal setting (6)

Inappropriate goals, improper reward system, dynamic and complex environment, reluctance to establish goals, resistance to change, constraints

Four basic levels of goals

Mission: statement of its purpose Strategic goals: set by top management, general issues Operational goals: lower management, short term issues tactical: set by middle management, operationalize actions necessary to achieve strategic goals

unrelated diversification

Operate multiple business not logically associated with another

Product departmentalization

arranging activities around product/product groups advantages: products easily integrated, decision speed is enhanced, performance of products accesed easily. Disadvantages: focus on one product more, admin costs rise

GE business screen

better approach to manage diversified business units, also considers attractiveness of industry and competitive position. Greater market growth, larger the market. Smaller capital requirements and less competitive intensity more attractive industry will be

Operational plans

carry's out tactical plans to achieve operational goals. Middle and lower level managers. Short term focus

business level strategy

chooses to conduct business in a particular industry (only one)

Corporate level strategy

chooses to manage operations in several industries

Miles and snow typology

classification of strategic options developed by raymond miles and charles snow, four categories: prospector strategy, defender strategy, analyzer strategy, reactor strategy

scalar principle

clear line of authority from lowest to highest positions

transnational strategy

combines benefits of global scale efficiencies and benefits of local responsiveness

Focus strategy

concentrates on specific market, product line, group of buyers

job specialization

degree to which the task of organizing is broken down into parts

Administrative model

describes how decision are actually made and that managers use 1) use incomplete and imperfect information 2) constrained by rationality & 3) tend to satisfice when making decisions

Contingency planning

determination of alternative courses of action is unexpected or disrupted

Planning: Operation managers

develop cost cutting programs and better inventory control

Planning: Marketing managers

develop plans for targe market penetration and sales

Tactical plans

developed to implement specific parts of a strategic plan. Upper and middle management. Shorter time horizon

differentiation strategy

emphasize high quality/value. Chanel, Louis Vuitton. Focuses on what the customer wants not price

multimarket flexibility

face challenge of reacting to diverse and changing environments