MGMT 309 Exam 2

what is manufacturing vs service org

manufacturing: transforms inputs into tangible outputs service org: transforms resources into an intangible outlet

what is crisis management?

the set of procedures the organization uses in the event of a disaster or other unexpected calamity

what is the *actual* classical decision model?

when faced with a decision situation, managers should... -obtain complete and perfect info -eliminate uncertainty -evaluate everything rationally and logically -... and end up with a decision that best serves the interests of the org

what is unrelated diversification and related diversification stratgeies?

-2 of 3 related to corporate strategy -unrelated diversification: org operates multiple businesses not logically associated with one another -related diversification: organization operates in several businesses that are somehow linked to each other -basis of relatedness can include common __________ (tech, network distribution, marketing skills, brand names, reputations, customers)

who manages/sets goals?

-ALL managers -managers are responsible for setting goals that correspond to their level in the org

maturity

-After a period of growth, products enter a third phase -During this maturity stage, overall demand growth for a product begins to slow down, and the number of new firms producing the product begins to decline -The number of established firms producing the product may also begin to decline -This period of maturity is essential if an organization is going to survive in the long run. -Product differentiation concerns are still important during this stage, but keeping costs low and beginning the search for new products or services are also important strategic considerations

what is a strategic business unit

-BSU -each business within a firm -pertains to the corporate level

what is computer aided design?

-CAD -uses computers to design parts, complete products, and simulate performance

how do the responsibilities of different managers for planning?

-CEO: major roles in planning and implementation -executive committee (top): top management provides input to the CEO and reviews strategic plans *sort of a translator to line management* -board of directors (middle): establishes the corporate mission and strategy -line management (middle/lower): valuable insight information and execute the plans developed by top management

growth

-During the growth stage, more firms begin producing the product, and sales continue to grow. -Important management issues include ensuring quality and delivery and beginning to differentiate an organization's product from competitors' products. -Entry into the industry during the growth stage may threaten an organization's competitive advantage; thus, strategies to slow the entry of competitors are important.

decline

-In the decline stage, demand for the product or technology decreases, the number of organizations producing the product drops, and total sales drop -Demand often declines because all those who were interested in purchasing a particular product have already done so -Organizations that fail to anticipate the decline stage in earlier stages of the life cycle may go out of business -Those that differentiate their product, keep their costs low, or develop new products or services may do well during this stage.

where does planning start?

the mission statement

introduction

-In this introduction stage, demand may be very high, sometimes outpacing the firm's ability to supply the product. -At this stage, managers need to focus their efforts on "getting product out the door" without sacrificing quality.

what are the levels of management? line, middle, top

-The mission and strategic goals are generally determined by the board of directors and top managers (middle) -Top and middle managers then work together to establish tactical goals -Finally, middle and lower level managers are jointly responsible for operational goals

what is operations management?

-The total set of managerial activities used by an organization to transform resource inputs into products, services, or both -the CORE -provides utility to the org (form utility in manufacturing, time and place utility in a service)

what is scope?

-a component of strategy -specifies the range of markets in which an org will compete

what is the classical decision model?

-a prescriptive approach that tells managers how they should make a decision -assumes that managers are logical and rational and their decisions will be in the best interest of the org (these conditions rarely met)

further describe tactical plans?

-aimed at achieving tactical goals, developed to implement specific part of a strategic plan -they are to battle as strategy is to war -develop: recognize/understand strategic plans and tactical goals; specify relevant resource/time issues; recognize/identify resource commitments -execute: evaluate each course of action in light of its goal; obtain/distribute info/resources; monitor horizontal/vertical communication and integration of activities pertaining to goal achievement

what are the types of layout: fixed-position

-arranged around a single work area, multiple processes on one product at the same time

what are the types of org layout: process layout

-arranged around the process (lots of bouncing around, usually multiple products)

what are the types of org layout: product layout

-arranged around the product (production line)

what are the levels of strategy?

-business level: set of strategic alternatives from which an org chooses as it conducts business in a particular industry or market -cooperate level: set of strategic alternatives from which an org chooses as it manages its operations simultaneously across several industries and several markets

what is strategy?

-comprehensive plan for accomplishing the orgs goals -strategic mgmt: comprehensive and ongoing mgmt process aimed at formulating and implementing effective strategies -effective: strategy that promotes a superior alignment between the org and its environment and the achievement of its strategic goals

types of strategy: emergent strategy

-developed pattern of actions in the absence of mission and goals or despite mission and goals -reactive

when implementing a diversification strategy, orgs should

-diversify by developing new products/services (Honda) -diversify by replacing former customers and suppliers -diversify thru mergers or acquisitions

Miles/Snow Typology: prospector strategy

-encourages creativity/flexibility and is often decentralized -ex. Amazon, Rubbermaid, 3M (employees must devote X% amount of time to creating new products)

types of plans: operational plan

-focuses on carrying out tactical plans to achieve operational goals -developed by middle and lower level managers -short-term focus

Miles/Snow Typology: defender strategy

-focuses on lowering costs and increasing performance of current products -ex. BIC, eBay, Mrs. Fields, Auntie Annies's (static product, maintaining high quality)

what are the sources of competitive advantage: multimarket flexibility

-gives firms the ability to respond to change in one region by making changes in other regions

what are the sources of competitive advantage: worldwide learning

-gives firms the advantage of adopting best practices from wherever they originate

Miles/Snow Typology: reactor strategy

-has no consistent approach to strategy -ex. International Harvester, K-Mart, Macy's, Office Depot (no longer a big market player cuz cant compete with Target, Amazon, etc.)

what are the strategic alternatives to competitive advantage?

-home relplication strategy: company uses the core competency it developed at home as its main competitive weapon -multidomestic strategy: company manages itself as a collection of subsidaries, each with a domestic market -global strategy: a company views the world as a single marketplace, standardizing products to address the needs of customers worldwide (example. coke)

what is product life cycle?

-how products enter and grow within a market -this is what dictates strategy

how do we modify weaknesses?

-invest to obtain strengths OR modify mission

what is capacity?

-involve choosing the amount of products, services, or both that can be produced -a critical decision that is based on demand

what is the nature of decision making?

-it is the act of choosing one alternative from among a set of alternatives -decision making process: includes recognizing and defining the nature of a decision situation, choosing the "best" alternative, and putting it into practice

what are the sources of competitive advantage: global efficiencies

-location efficiences: allows firms to locate wherever they obtain a cost advantage -economies of scale: decrease the per unit cost of production due to large quantities aka buying/producing in bulk -economies of scope: decrease the per unit cost by sharing expenses across product lines

what are the time frames for planning operational plans?

-long-range plan: covers many years, perhaps decades, commonly 5+ years ex. mission statement (usually 5-10 years) -intermediate plans: 1-5 years -short-range plans: less than or equal to 1 year day-to-day

Miles/Snow Typology: analyzer strategy

-maintains current businesses and is somewhat innovative in new business -ex. DuPont, Yahoo, IBM, Uber (slowly innovating in new business but always with the idea that their core business sustains them)

what is a merger vs acquisition

-merger: purchase of one firm by another firm of the appoximate size -acquisition: the purchase by a firm by another firm that is considerably larger -voluntary or involuntary

what is the implementation of strategy?

-methods by which strategies are executed within the organization -it focuses on the processes which achieve strategies

how do we evaluate strengths?

-org strength: skills/capabilities enabling an org to conceive of and implement its strategies -common strength: skill/capability held by numerous competing firms -competitive parity: exists when large numbers of competing firms can implement the same strategy -distinctive competence: strength possessed by a small number of firms

how do we evaluate weaknesses?

-org weaknesses: skills/capabilities that do not enable (and may limit) an org to choose and implement strategies that support its mission -competitive disadvantage: exists when a firm is NOT implementing valuable strengths implemented in competing firms

how do we evaluate opportunities/threats?

-organizational opportunities: areas in the environment that, if exploited, may generate increased performance -organizational threats: areas in the environment that increase the difficulty of an org achieving higher performance

characteristics of goals: area

-orgs set goals for different areas -ex. operations, marketing, finance, quality, control, HR, etc.

characteristics of goals: time

-orgs set goals for different time frames -long-term, immediate, short term

what is a single product strategy?

-pertains to corporate level -an org manufactures one product or service and sells in a SINGLE geographic region (low diversification)

types of plans: tactical plan

-plan aimed at achieving tactical goals, developed to implement parts of a strategic plan

what is automation?

-process of designing work so it can be partly or wholly performed by machines -manufacturing tech/org technology -sensor, info, control feedback

types of org goals: operational goal

-set by/for lower-level managers -focus is on short-term issues associated with tactical goals

types of org goals: tactical goals

-set by/for middle managers -focus on actions necessary to achieve strategic goals

types of org goals: strategic goal

-set by/for top management -focus on broad, general goals ex. "increase sales by 10% in the next..."

what is the formulation of strategy?

-set of processes involved in creating or determining the strategies of the org -focuses on the CONTENT of strategies

how do managers manage multiple goals? what is optimizing?

-sometimes goals conflict with each other -optimizing: involves balancing and reconciling possible conflicts among goals

what are the conditions of DM?

-state of certainty: the DM knows with reasonable certainty what the alternatives are and what conditions are associated with each alternative -state of risk: the availability of each alternative and its potential payoffs and costs are all associated with probability estimates -*state of uncertainty*: the DM does not know all the alternatives, the risks associated with each, or the consequences each alternative is likely to have

types of plans/planning: strategic plan

-strategic plan: general plan outlining decisions of resource allocation, priorities, and action steps necessary to reach strategic goals

What is a SWOT analysis?

-strengths, weaknesses, opportunities, threats -internal: strengths. weaknesses -external: opportunities and threats

what are good strategies?

-those that support the mission and exploit opportunities/strengths and neutralize threats and avoids weaknesses

what are the types of layout: cellular

-used when families of products follow similar flow paths

what is competitive advantage?

-when orgs exploit these distinctive competencies, they often obtain a competitive advantage -pertains mostly to international and global strategies -sustained advantage: when all forms of strategic imitation cease

what are the 4 purposes that org goals serve?

1. They provide guidance and a unified direction for people in the organization 2. Goal setting practices strongly affect other aspects of planning. good goal setting = good planning 3. Specific and moderately difficult goals can serve as a source of motivation for employees of the organization 4. Goals provide an effective mechanism for evaluation and control.

what is the rationale decision model? 6 steps

1. define decision situation 2. identify alt 3. eval alt 4. select best alt 5. implement chosen alt 6. follow up and evaluate -is it feasible? -is it satisfactory? -are the consequences affordable? -if all answer yes, retain for further use

what are the 4 steps to developing a contingency plan/crisis management?

1. develop plan, considering "what if" events 2. implement plan and formally identify contingency events 3. specify indicators for the contingency events and develop contingency plans for each possible event 4. successfully complete plan or contingency plan *action points determine which plan to use*

what are the pros/cons of related/unrelated diversification?

Pros of related: decrease economic risk, decrease overhead cots, allows for synergy pros of unrelated: stable performance and resource allocation across businesses (they dont affect each other) cons of unrelated: lack of knowledge at corporate level, failure to exploit important synergies used by competitors, no communication/interaction

what are two types of short-term planning?

action plan: operationalizes any other plan reaction plan: reacts to unforseen events

what does the administrative model argue?

argues that decision makers ACTUALLY -use incomplete and imperfect info -are constrained by bounded rationality -tend to "satisfice" when deciding

types of strategy: deliberate strategy

chosen plan of action to support SPECIFIC GOALS

what is contingency planning?

determination of alternative courses of action to be taken if an intended plan is unexpectedly disrupted or rendered inappropriate

what is the corporate level?

large businesses engaged in several businesses, industries, or markets

what are the types of DM?

programmed: one that is fairly structured or recurs with some frequency, or both nonprogrammed: relatively unstructured and occurs much less often

types of org goals: mission statement

states an orgs fundamental purpose