MGMT 310 Mindtap Assignments

T or F? Differentiation strategies increase competition because they reduce customer loyalty.

F

In the following table, identify the order of the steps in the stakeholder mapping process: Define connections between stakeholders. Determine stakes for each stakeholder. Map stakeholder relationships with the firm. Identify specific subsets within stakeholders.

4 3 1 2

__________ are the expenses of coordinating activities between business units. In contrast, transaction costs are what a company spends acquiring supplies from other firms. __________ is the strategy of acquiring suppliers of inputs to the firm's production. __________ allow a buyer to purchase a product at a specific price.

Administrative costs Backward integration Spot contracts

___________ involves determining where a company's strengths and weaknesses lie in these activities and creating a plan for capitalizing on strengths and improving weaknesses to create a better competitive advantage (margin) for the organization.

Value chain analysis

__________ integration involves purchasing a business that makes inputs to another business unit, such as if Virgin purchased an aeronautic parts manufacturer.

Vertical

__________ involves setting up an organizational structure that supports links between silos. This allows employees to work together more closely and to serve customers more effectively. A cross-functional group is an example of an organizational structure that brings employees from different silos together. Focusing these employees on the customer helps to make sure the company as a whole is more customer-centric. Example: creation of a __________ group to bring together information from all parts of the company so that what the company is doing can be compared with what clients want.

Coordination cross-functional

__________ is the strategy of selling products at a discount.

Cost leadership

___________ is a strategy that involves providing customers unique value for which they are willing to pay more.

Differentiation

___________. Next, managers have to identify specific subsets of stakeholders. Again, these will vary by company. For example, meatpacking companies and wood product companies may both have conservationists as stakeholders, but the meatpacker will be more influenced by People for the Ethical Treatment of Animals (PETA), while the wood product company will be more influenced by the Sierra Club.

Identify specific subsets within stakeholders.

_________ involves materials handling, warehousing, and inventory control for the supplies (meat and vegetables) that will eventually become company products (hamburgers).

Inbound logistics

Managers look at several factors to determine whether a company meets the better-off test of diversification. _________ indicate a competitive advantage, but they may be impacted by market power. __________ can be achieved through efficient sharing and transferring of resources. And managers check to see if capital is being allocated to increase the well-being of the enterprise. Whether the company is selling or licensing its products is a business-level decision.

Increased sales Economies of scope

___________ intelligence, in contrast, involves knowing how to interact effectively with others.

Interpersonal

___________ is achieved when a firm can sell products above the normal price seen in the market.

Market power

T or F? A company that actively tries to become more efficient is likely to be pursuing a cost leadership strategy.

T

In the evolution of management, what view occurred up to 1960s?

managerial view

Both Coke and Pepsi executed __________, the capability to identify and react to changes in the external environment (changes in drink preferences) and mobilize internal resources to deal with those changes (by creating new products). Almost every firm has some strengths, and Coke and Pepsi used some of their strengths in pursing this new market. However, this question is about that decision, not the resources the companies used to execute it.

strategic flexibility

Firms enjoy __________ when they generate sustainable cost savings by combining duplicate activities or deploying underutilized assets across multiple businesses.

synergy

Pursuing a single-product strategy allows a company to become very good at making the product and delivering it to customers. However, a business that makes only one product is highly ___________ to changes in demand for that product or other changes in the environment in that industry. If, for example, American culture began to idealize a rounder, more jiggly body type for women and men, Spanx would have little means to offset a downturn in demand for its undergarments.

vulnerable

At C & J Construction, CEO Charlie and vice president Janice have traditionally made most of the key decisions. However, they are considering decentralizing the firm's decision making. Which of the following is a problem that may result? a) Employees at lower levels in the firm may make decisions that benefit themselves or their customers but not the department or company. b) The company will become less able to adapt to changes in the business environment. c) The burden on Charlie, Janice, and other senior managers to collect information and make timely decisions will increase.

a) Employees at lower levels in the firm may make decisions that benefit themselves or their customers but not the department or company.

Businesses should diversify, or acquire other businesses, only under which of the following circumstances? a) When the combined business will be more valuable than the two separate businesses alone b) When the acquiring business has excess funds available for use c) When the business environment is undergoing rapid transformation d) When the company being acquired is significantly undervalued

a) When the combined business will be more valuable than the two separate businesses alone

Match each question in the following table to a specific area of the diversification test. a) Does owning this business give us a bigger competitive advantage than an alternative arrangement, such as a strategic alliance with the business? b) How much money will we spend to buy the business we want compared to other businesses in the industry? c) How much power will our suppliers have over the price of the goods they sell to us?

a) better-off test b) cost of entry c) attractiveness test

If the costs of vertical integration outweigh the benefits, what are our alternatives to achieve corporate advantage? Check all that apply. a) Purchasing a candy manufacturer b) Entering into a long-term contract with the restaurant chain to buy dinnerware c) Outsourcing order fulfillment to a warehouse company d) Using spot contracts to purchase clay as it is needed

a, c, d

What problem might the CEO expect if the company switches to a network structure? a) A network structure does not drive the adoption of productivity-enhancing technology. b) The firm will have less adaptability to rapid changes in the business environment. c) Accountability for results may be more difficult to enforce.

c) Accountability for results may be more difficult to enforce.

A _________ organization uses a hybrid functional and divisional structure, and a network organization leverages the expertise of knowledge workers as needed.

matrix

In a _________ organization, employees have both a functional and a product (divisional) manager. Although this can create tension between competing priorities, it is particularly effective in a project-based environment in which employees need to communicate across functions.

matrix

In the evolution of management, what view occurred since the 1990s?

stakeholder view

A firm that shows __________ responds to changes in its external environment.

strategic flexibility

___________ are decreased costs achieved by producing a large volume of product or supplying a large volume of service. ___________ can permit a firm to pursue a cost leadership strategy.

Economies of scale

___________ occur when a company shares resources or transfers skills and core competencies among business units.

Economies of scope

In __________, factors include: a clear differentiation of tasks and responsibilities among individuals; coordination through a strict hierarchy of authority and decision rights; standardized rules and procedures; the vertical separation of planning and execution so that plans are made in the upper ranks of an organization and executed in the lower; and the use of technical criteria for recruitment and promotion

Bureaucratic Organization Structure

__________ intelligence is the ability to understand the impact of environmental factors on a firm and how to influence those same factors. Steve Jobs was a master of __________ intelligence.

Contextual

__________ of the firm emerged where effective organizational structure was based on fit or alignment between the organization and its environment.Footnote This approach affirmed that the social, political, and business environments play a large role in shaping the way effective organizations are structured.

Contingent View

___________ occur when companies can distribute their capital across other companies they acquire.

Financial economies

__________ goes to the firm that is the first to offer products or services that win customer loyalty.

First-mover advantage

__________ occurs when a firm (CNN) owns or controls the avenues of distribution (television sets) for its main products (television programming). __________ involves buying a company that was formerly a supplier—for example, if CNN bought a company that manufactured television cameras. __________ allow a buyer to purchase a product at a specific price—for instance, if CNN hired contract camera operators, editors, and on-air talent to produce a news special in Tibet. __________ are the expenses of coordinating activities between business units; they may result from integration, but this sentence is describing the forward integration strategy itself.

Forward integration Backward integration Spot contracts Administrative costs

__________ typically need to have technical skills, because they must help individual employees learn to do their jobs. For example, a new employee for a solar power company may ask the foreman how to install solar panels, but the CEO is not likely to get this kind of question.

Frontline supervisors

__________ is about taking action to implement and evaluate change. More formally, management is the act of working with and through a group of people (using planning, organizing, and controlling) to accomplish a desired goal or objective in an efficient and effective manner. __________ focuses more on setting direction and inspiring people. Management theorists adopting a human relations approach emphasize the importance of social relations at work, and scenario building is a tactic used in strategic planning.

Management Leadership

___________ with the firm. Managers start by identifying their company's key stakeholders. Key stakeholders will vary by company. For example, the government is likely to be a key stakeholder for a pharmaceutical company, while the media is a bigger stakeholder for a movie production company.

Map stakeholder relationships

_________ is the same set of tasks but used for completed products, such as finished hamburgers. Technological development and procurement are support activities.

Outbound logistics

___________ analysis is a review of the financial activities of the organization, and trend analysis involves following one element of the environment for a period of time to make predictions about what will happen in the future.

Shareholder

How does a manager know whether the company meets the better-off test after diversification? Check all that apply. a) By determining whether the company is selling its products or licensing them to other businesses b) By analyzing distribution of capital across business units c) By measuring economies of scope d) By analyzing the company's sales in new markets

b) By analyzing distribution of capital across business units

What type of decision are you making when you decide to merge with the gift shop next door instead of entering into a joint venture to sell coffee-related merchandise? a) Scope of business b) Ownership c) Organizational design

b) Ownership

Instead of engaging in __________ by acquiring companies, a firm may sign short-term or long-term contracts with suppliers and customers or make other alliances. Another alternative to acquiring businesses is to divest businesses or outsource functions; if order fulfillment is not a core competency of this ceramics manufacturer, it may decide to outsource this function to a company that specializes in it. Purchasing a candy manufacturer would be an example of ___________, which would take the company's strategy in an entirely different direction and does not address the same issues as vertical integration.

backward or forward integration divest unrelated diversification

Companies encounter ___________ when first starting a business. These include not making enough products to create supply- or demand-side economies of scale, costs associated with changing suppliers, the need for capital to create a properly sized business, government regulations that control product or service manufacturing and distribution, and competitors that may have better techniques or distribution advantages. But if the new company has superior technology or materials and access to open distribution channels, that will eliminate at least some barriers to entry.

barriers to entry

A __________ a more open organizational structure in which roles and responsibilities are loosely defined, whereas organizers and bureaucrats advocate for more organizational control. A manager who specialized in the _________ would organize cross-trained, self-managed teams, which isn't mentioned here.

behaviorist supports clan approach

To mitigate risk in one industry, a firm can __________ of businesses in different industries. This was a popular strategy for corporations in the 1960s and 1970s, when U.S. laws discouraged purchasing closely related businesses.

build a portfolio

Because all pillars of managing organizations are related to each other and to the global business environment, effective managers know that __________ any one of the pillars or the environment will necessitate at least considering changing all of the pillars.

changing

Making _________ means restructuring the organization's boundaries, bringing customers inside the company and sending employees outside the company to interact with customers. The change you've made to your staff meeting changes the boundaries of your organization. Bringing outsiders in once a month gives you and your employees a better idea of what customers want and need. Example: In the past, you have held staff meetings once a week. Now you set aside one staff meeting a month to gather information from outside the organization. You invite customers, suppliers, collaborators, and even competitors to come to this staff meeting and talk about the latest trends in the industry.

connections

The manufacturer is engaged in _________ strategy by deciding to source raw materials in this way instead of, for example, by purchasing the mine or through spot contracts to purchase diamonds as needed. This strategy will be implemented through the organization, such as by creating a department in charge of managing contracts with other firms.

corporate-level

A _________ strategy involves offering unique products and services highly valued by consumers, while a cost leadership strategy involves selling goods and services at the lowest price.

differentiation

Successful __________ requires that organizations centralize control (have centralized rules that govern all parts of the organization) but decentralize autonomy (give employees permission to make everyday decisions to serve their customers most effectively). This practice helps ensure that company resources are used effectively while giving employees the tools they need to meet the ever-changing needs of their customers.

diversification

The key outcome in _________ occurs when the combined business will be more valuable than the two separate businesses alone. The price of the new business or the funds of the old are significantly less important than whether the new business will help the older business gain a competitive advantage. And although businesses typically do diversify more when environments are undergoing rapid change, that is not a sole reason for diversification to occur.

diversification

A _________ structure organizes employees into separate businesses along products, geographic areas, or customers.

divisional

This diagram shows the relationship between types of diversification and company performance. As you can see, companies with very __________ strategies (companies that deal primarily in one product) and companies with __________ strategies (companies that have businesses in many different industries) have lower performance than companies using a ___________ strategy, in which all of the businesses of the organization are in the same general industry.

focused unrelated diversification related diversification

A __________ structure is one in which employees are organized according to the activities they perform. This often works well for smaller organizations or those with fewer products or services.

functional

The __________ each of the five competitive forces is, the less likely it is that a company will be successful. An __________ in any force increases the amount of competition a company faces, and the greater the competition, the harder it will be for a company to attract and retain customers. Conversely, when each of the five competitive forces is low, the more likely it is that a company will be successful.

higher increase

_________ emerged, which emphasized the importance of informal social relations at work. As opposed to scientific management's view of the firm as a machine, _________ scientists believed that organizations must be understood as a system of interdependent human beings who share a common interest in the survival and effective functioning of the firm.

human relations movement

These Swarovski workers are engaged in _________ activities for the company, because they are physically creating a product. _________ activities also include the product's sale and transfer to the buyer. __________ activities include accounting and human resources, which are necessary to run the business but are not directly related to manufacturing products or services

primary Support

What is the key focus of the managerial view?

production

By expanding to a new market in the same industry, Virgin is using related resources to diversify its customer base. This is _________ diversification. _________ diversification would involve entering a different industry, and a single-product strategy would mean providing the same product to the same customers.

related Unrelated

Companies that undergo _________ get larger, which can increase their market power and economies of scope while reducing both the tangible and intangible costs for the organization. However, related diversification does not help to protect the company from a changing environment because it adds businesses similar to those of the existing organization.

related diversification

A ___________ view of a firm says that companies can develop a competitive advantage through collecting and harvesting resources to produce sustainable core competencies. Resources are defined as strengths companies can use to conceive of and implement their strategies. Human resources are one kind of resource, but the manager also considers tangible and intangible resources. The ___________ is an analysis of all of the activities a company performs to produce competitive advantage.

resource-based value chain

__________ focuses on how jobs, work, and incentive schemes could be designed to improve productivity using industrial engineering methods such as time and motion studies.

scientific management

What is the key focus of the stakeholder view?

serving multiple constituencies

In the evolution of management, what view occurred during 1960s to 1980s?

shareholder view

___________. Finally, it is important to see how stakeholder concerns are related. For example, suppose that the real estate agent mentioned in Step 3 also identifies a local school as a stakeholder in her business. Understanding how the school and homeowners might band together will be critical for creating a strategy that addresses the concerns of both and creates a profitable business.

Define connections between stakeholders.

What is the key focus of the shareholder view?

financial performance

This company uses a _________ strategy, concentrating its sales efforts on a specific group of purchasers (in this case, people who ride horses).

focus

_________ is the support activity of purchasing the supplies needed to produce a firm's products. Hot dogs are a big product for Sonic—the company frequently introduces new flavors and styles, so Sonic managers have to know where they are going to buy their supplies. Service is a primary activity of enhancing or maintaining the value of a product. Inbound logistics is actually dealing with supplies once they have been acquired by the organization—note that this activity supports inbound logistics. Outbound logistics involves handling a product once it has been made.

Procurement

Decisions about _________ concern the relationship structure of the business units—whether they will be acquired or aligned through a joint venture, partnership, or alliance. _________ concerns how the firm's resources will be coordinated, and the _________ is which industries and markets it will compete in.

ownership Organizational design scope of business

The _________ view is a business framework that attempts to analyze multiple groups that interact with the firm. These groups can be both inside and outside the organization. In contrast, a __________ view is focused on the financial success of the company, and a managerial view focuses on the products of the company. The _________ view is a management theory that says that the best structure for an organization depends on the organization's environment.

stakeholder shareholder contingent

__________ involves delegating decision rights to customer-facing functions and employees, who often have the most information about the customer. By allowing customer service reps to explain the customer's situation to their direct supervisor and immediately get a yes or no, you increase the company's ability to be customer-centric. Example: Until now, customer service representatives have had to get two levels of management approval before issuing a refund to an unhappy customer. You decide that their direct supervisor can approve refunds as long as certain guidelines are followed.

Clout

__________ involves changing the organization's culture and implementing incentives to help employees focus on customers. Giving employees rewards for creating products that customers like helps to promote a culture that supports this kind of behavior. Example: You give employees rewards for creating new products that are hits with customers. Last year, you awarded $10,000 each to two employees who designed the company's best-selling product of the year.

Cooperation

__________ is the giving of decision rights to individual employees, in this case, engineers who can decide when to buy supplies and what kind. _________ would involve taking decision rights away from employees. A _________ structure is a way that a company organizes itself to give functional and divisional managers equal authority. Decisions may be delegated or not in a matrix structure.

Delegation Centralization and bureaucratization matrix

___________. Once stakeholder and stakeholder subsets are identified, managers will have to determine their interests. For example, if a real estate agent working in a broker's office identifies a particular homeowner's association as a stakeholder, it will be helpful to know whether the association wants a safer community or lower taxes.

Determine stakes for each stakeholder.

_________ is selling businesses, and _________ is a hostile takeover of another company, often with the goal of selling off its pieces to gain more value from them individually than they can produce together.

Divesting corporate raiding

Among the 3 Pillars of Management: __________ involves setting the direction for the organization: determining how the organization will compete in a marketplace that changes with the environment. __________ involves structuring the company and making optimal use of company resources. __________ involves inspiring and motivating employees to implement organizational strategies.

Strategy Organization design Leadership

T or F? A company that creates a distinctive product is likely to use a differentiation strategy.

T

Although decentralization of decision making has a number of benefits, one potential problem is that employees at lower levels in the firm may make decisions that benefit themselves or their customers but not the department or company. Lacking the "bigger picture," they may advantage themselves or their customer to the detriment of the organization. The firm is likely to become more __________, and there will be less pressure on senior management to collect information in time to make decisions.

adaptable

Which of the following items serve as barriers to entry for a new organization? Check all that apply. a) Producing small numbers of an individual item b) High fixed costs to change suppliers of a product c) Open distribution channels for new products d) The company's possession of superior technology or access to better raw materials

all correct

An __________ situation is characterized by lack of clarity about cause-and-effect relationships; conducting experiments is often helpful to increase understanding. Ambiguity is part of VUCA (volatile, uncertain, complex, and ambiguous). __________ occurs when the environment changes in unpredictable ways, __________ concerns interactions of different aspects of the environment, and __________ occurs when the significance of an event is unknown.

ambiguous Volatility complexity uncertainty

A __________ is an extreme form of control in which systems are highly formalized and are characterized by extensive rules, procedures, policies, and instructions. A __________ proposes more loosely defined roles, and a _________ allows fluid job roles within self-managed teams. All companies have an organizational design in that they use formal systems, levers, and decisions to implement their strategy.

bureaucratic approach behaviorist approach clan approach

The CEO of C & J Construction is considering moving to a network structure. What would be the best reason to make such a move? a) To create closely integrated departments of people who perform the same work b) To create more long-term stability in supervisory relationships c) To maximally leverage the expertise of knowledge workers

c) To maximally leverage the expertise of knowledge workers

Employees need the skills—the _________—to better serve customers. These can be technical skills as well as soft skills such as the ability to communicate effectively with employees in different areas of the company. Capability can be developed both through formal training and the informal training that occurs as a person moves from job to job during a career. The training sessions you've designed will build employee skills. More importantly, cross-training ensures that each employee will be better able to work on multiple projects and serve customers more effectively. Example: You started monthly 2-hour training sessions that cover everything from how to create a basic program in Python to how to move boxes safely. You invite every employee in the company to participate in every training session to make sure that all of your employees gain the skills they need.

capability

The following image shows the types of strategies adopted by companies based on their competitive scope/market appeal and their competitive advantage. Companies can adopt one of three basic strategies: ___________, which means attracting consumers based on the low cost of items sold; ___________, which means attracting consumers based on the quality or value of goods sold; and ___________, which means reaching out to a very specific group of consumers. Note that when a company adopts a focus strategy, it must still decide whether it will be selling items for a low cost or whether it will be encouraging people to pay full price for items of more value.

cost leadership differentiation focus

Spanx founder Sara Blakely has been named one of Time's 100 Most Influential People. Since its founding in 2000, the Atlanta-based company has limited itself to producing shaping undergarments. Which of the following are most likely to be an advantage and disadvantage of a single-product strategy? a) Greater development of core competencies; less opportunity for synergies b) Greater opportunity for financial economies; less opportunity for synergies c) Greater opportunity for financial economies; more vulnerability to cyclicality d) Greater development of core competencies; more vulnerability to cyclicality

d) Greater development of core competencies; more vulnerability to cyclicality

Proctor & Gamble gained a __________ by producing the first sponge made out of melamine foam. Consumers liked the way the product cleaned and continued to buy it, so the product secured customer loyalty. __________ is enjoyed by a company that is already positioned in the industry; P&G may well enjoy incumbency advantages, but those are not described in this question. __________ is leverage exerted over suppliers and consumers, while barriers to entry are factors that make starting a new business difficult.

first-mover advantage Incumbency advantage Bargaining power

Someone who enters a market early and builds a strong customer base may enjoy a ___________ that can persist for many years. This __________ may then constitute a high barrier to entry. For example, if most YouTube viewers of cooking videos watch Ms. Funny Fryer's channel, someone else who would like to make funny videos about frying food would have trouble attracting an audience.

first-mover advantage individual's incumbency

A __________ means concentrating on a specific customer, geographic region, or product; Coke and Pepsi did not pursue a focus strategy by expanding their product line and seeking customers with different tastes.

focus strategy

Commissioning a new test that can be used to hire employees is part of __________, or support activities related to hiring personnel. Human resource management also includes activities related to recruiting, training, developing, and compensating personnel. Marketing and sales, operations, and service are all primary activities related to making and delivering the best possible products to customers.

human resource management

The best reason for C & J Construction to move to a network structure is to maximally leverage the expertise of _________ workers. A network structure is a dynamic way of aligning _________ workers, individually or in groups, with specific projects as needed. As projects end and begin, employees are reassigned and have new managers. Employees are brought together to work on a project from across functional specialties.

knowledge