MGT 450 - Chapter 11, 12, 13, 14, and 15

Who are social entrepreneurs?

- A person who founds an organization (either for-profit or nonprofit) whose focus is to implement innovative solutions to societal problems - They aim to create large-scale social change through the ventures they create

Gainsharing is: _____. Companies should identify the types of teams they have, parallel, work, project, or partnership, and then choose the pay options that are most appropriate

A form of pay for performance in which an organization shares the financial gains with employees, such that employees receive a portion of the profit achieved from their efforts (sometimes called profit sharing)

Bonus: _____

A form of variable pay where the employee earns additional compensation on the basis of achieved objectives

When deciding where and how to produce products for international markets, companies have a choice of three strategies: _____

1.Manufacture in the United States and then export 2.Global Components with local assembly 3.Local production

The four Ps of marketing are:

1.Product: Any physical good or intangible service that is offered for sale 2.Price: The amount of money that the consumer pays for the product 3.Promotion: All the activities that inform and encourage consumers to buy a given product, including advertising (whether print, radio, television, online, billboard, poster, or mobile), coupons, rebates, and personal sales 4.Place: The location at which the company offers its products for sale

Two main theories of how to reward employees: _____

1.Rewarding individual performance, through plans such as commissions-sales schemes and merit-based pay 2.Organizations should reward team performance, without regard for individual accomplishment

Four predictors of a manager's ability to succeed as an expatriate: _____

1.Self-orientation 2.Others orientation 3.Perceptual ability 4.Cultural toughness

Intrapreneurship: _____. Intrapreneur: _____

A form of entrepreneurship that takes place in a business that is already in existence; A person within an established business who takes direct responsibility for turning an idea into a profitable finished product through assertive risk taking and innovation

A business plan is

A formal statement of a set of business goals, the reasons why they are believed attainable, and the plan for reaching those goals. It may also contain background information about the organization or team attempting to reach those goals

Total Quality Management (TQM) is a set of management practices initially introduced by W. Edwards Deming. The focus of TQM is _____. TQM consists of _____

increasing quality and reducing errors in production or service delivery; systematic processes, planning, measurement, continuous improvement, and customer satisfaction

Free rider involves _____

individuals or firms that benefit from a shared resource or the actions of others without paying or contributing their fair share of the costs

Distribution channels in emerging markets are less developed, which means that _____. 3 distribution strategies for entering a new market: _____

companies may need to seek novel solutions to distributing their products; 1.Companies can do a joint-venture or partnership with a local company 2.Acquire a local company to have immediate access to large-scale distribution 3.A company can to build its own distribution from scratch

Companies that are promoting their global brands successfully on the web include Google, Philips, Skype, Ericsson, Hewlett-Packard, and Cisco. ______. They have created websites in local languages and are using images and content specific to each country. _____

These companies are mindful of the cultural and language differences across countries; Each country website has the same look and feel of the main corporate website to preserve the overall brand

Pay for performance: _____. Innovative employee-recognition programs are ______

Ties pay directly to an individual's performance in meeting specific business goals or objectives; special programs that reward exceptional employee performance

Reverse innovation is _____. GE Healthcare completely reinvented a $10,000 medical-imaging device to create a $500 portable, imaging device for the Indian market. _____

designing a product for a developing country and bringing that innovation back to the home country; GE realized it had created a new product for its home market as well

Country-of-origin effect is _____. Their perceptions of the country influence ______

a situation in which consumers use the country where a product was made as a barometer for evaluating the product's quality; whether they perceive the product favorably or unfavorably and thus whether they'll purchase the product

Global Entrepreneurship Monitor (GEM) is _____. It is started as a partnership between London Business School and Babson College

an annual assessment of the national level of entrepreneurial activity across countries

An important challenge in many multinationals is _____. Achieving the balance becomes more difficult as the level of diversity that firms are exposed to increases

balancing the need to coordinate units scattered around the world with the need for individual units to have the control necessary to deal effectively with local issues

Culture impacts _____ in a variety of ways such as How benefit packages are constructed to the hiring, termination, and promotion practices used. Human capital is _____

local HRM practices; the collective sum of the attributes, life experiences, knowledge, inventiveness, energy, and enthusiasm that a company's employees choose to invest in their work

Entrepreneurial ventures can operate at any level:

local, national, or international

When designing the R&D network, companies need to _____

make sure that all centers use the same communication and information systems platform so that team members can communicate regardless of where they are

•Large multinationals that have R&D centers also look for other ways to encourage innovation and new ideas •One effective way to stimulate innovation is _____

to devise ways for intrapreneurs to contribute their ideas

Born-global firm: _____

Also commonly called a global start-up, a business organization that, from inception, seeks to derive significant competitive advantage from the use of resources and the sale of outputs in multiple countries

Bottom of the pyramid (BOP): _____

Also known as the base of the pyramid, the market represents the four billion to five billion people living on less than $2 per day, typically in emerging economies

Angel investor is _____. Venture capitalist: _____

An affluent individual who provides capital for a business start-up; A person or investment firm that makes venture investments and brings managerial and technical expertise as well as capital to their investments

Knowledge spillover is: _____.

An informal exchange of ideas among individuals that helps individuals understand the state of the art in their field

Strategic human resources management (SHRM): _____. SHRM is not just a function of the human resources (HR) department. _____. When organizations enable, develop, and motivate human capital, they improve accounting profits as well as shareholder value in the process

An organizational approach to human resources management (HRM) with a concern for the effects of HRM practices on firm performance; All managers and executives need to be involved because the role of people is so vital to a company's competitive advantage

Attracting the right workers - _____. Enthusiasm for the job mean that employee's goals and aspirations also match those of the company. The added benefit of hiring workers who match your organizational culture and are engaged in their work is that _____

the ones who will be enthusiastic about their work; They will be less likely to leave your company just to get a higher salary

Factor-driven economies: _____. Efficiency-driven economies: ______. Innovation-driven economies: _____

Economies that are highly sensitive to world economic cycles, commodity price trends, and exchange rate fluctuations - typical in countries that compete on the basis of unskilled labor and natural resources; Economies that are typical in countries that compete on the basis of production processes and increased product quality; Economies that are typical in countries that compete on business sophistication and innovation

Entrepreneurship and the changing nature of "corporate" life

- As corporate life continues to offer less and less security, more people are considering entrepreneurship - Some entrepreneurs discover their vision and opportunity through a former employer - The leap from corporate life to entrepreneurship involves major changes • Entrepreneurs don't have a buffer between a mistake and total failure - Many large companies attempt to create the spirit of entrepreneurship inside their organizations. These internal groups (intrapreneurs) may spur more innovation, but this intrapreneurship is a far cry from the realities of entrepreneurship

How do people find opportunities?

- Disruptive technology: A technology that can make prior technologies obsolete - Low-end disruption: A disruptive technology that appears at the low end of an industry offering and usually does not lure customers away until it improves and becomes better than the incumbent offering - New-market disruption: A new-market disruption targets noncustomers rather than low-end customers, thus creating a new market that was previously ignored by the dominant players of the existing market - Hybrid-disruption strategies: A combination of new-market and low-end disruption strategies

Myths about entrepreneurs are:

- Entrepreneurs are born, not made - Entrepreneurs make more money - Being original is essential - It takes a lot of money to start a business - Entrepreneurs must be risk takers

What are levers to opportunity identification?

- Reduce - Create/add - Raise - Kept the same - Eliminate

Should you become an entrepreneur?

- Understand your personal motivations and be clear about them - Seek out others who have tried entrepreneurship—both those who have been successful and those who have not - Assess whether entrepreneurship will provide you with the ability to support and sustain yourself and your family - Take a look at your professional and personal support systems - Attitude and confidence - Key factors - Assess how you handle stress

Truths about entrepreneur are:

- Work hard and are driven by an intense commitment and determined perseverance - See the cup half full, rather than half empty - Strive for integrity - Burn with the competitive desire to excel and win - Are dissatisfied with the status quo and seek opportunities to improve almost any situation they encounter - Use failure as a tool for learning and eschew perfection in favor of effectiveness - Believe they can personally make an enormous difference in the final outcome of their ventures and their lives

2 types of channel distribution include:

1. Direct channel: •The shortest channel of distribution, consisting of just the producer and the end consumer •The consumer buys the product directly from the producer 2. Indirect channel: •Contains one or more intermediaries between the consumer and the producer •These intermediaries can include distributors, wholesalers, agents, brokers, retailers, international freight forwarders, and trading companies

Entrepreneurial process consists of:

1. Identifying entrepreneurial opportunities 2. Planning and preparing the venture 3. Resourcing the venture and taking action

The intrapreneurial organization can take on one or a combination of two forms: _____

1.Coexistence 2.Structural-separation

Three talent-management practices, in particular, correlated highly with exceptional financial performance:

1.Creating globally consistent talent-evaluation processes 2.Achieving cultural diversity in a global setting 3.Developing and managing global leaders

Twelve principles of bop innovation: _____

1.Focus on value and on delivering performance for the price 2.Innovate 3.Make the solution scalable 4.Aim to conserve resources 5.Identify functionality 6.Think in terms of process innovations 7.Reduce the skills required to do the job 8.Educate consumers in the use of products 9.Design products and services to operate in very tough infrastructure environments 10.Make the interface simple and the learning curve short 11.Innovate in distribution 12.Challenge assumptions

Innovation hub is: _____. Innovation hubs have a specific industry focus. _____. Hubs are known for the cross-pollination of ideas that takes place when employees of one firm talk with employees of another

A geographic region that contains a cluster of company R&D centers, universities, and government research institutes in close proximity; The single common factor that drives innovation across all sectors is the availability of a well-qualified talent pool

Balanced scorecard is _____.

A performance-management tool that helps managers define the performance categories that relate to the company's strategy

High-performance work system (HPWS): _____.

A set of management practices that attempts to create an environment within an organization in which the employee has greater involvement and responsibility

•Social network: _____ •Social capital: _____

A social structure made of nodes (which are generally individuals or organizations) that are connected by ties; a set of relationships among people; The resources—such as ideas, information, money, and trust—that one is able to access through one's social network

Global sourcing is _____ When making global-sourcing decisions, firms face a choice of whether to sole-source or to multisource. Sole-source is _____

Buying the raw materials or components that go into a company's products from around the world, not just from the headquarters' country; to buy raw materials, components, or services from one supplier exclusively, rather than buying from two or more suppliers

Counterfeit markets: _____

Commerce areas where vendors purposely deceive buyers by altering products and then selling them as branded products at a bargain cost

Gray markets are ______

Commerce areas where, because of price differences across countries, consumers are able to cross international borders to legally purchase products at lower prices than in their home country

Bootstrapping is: ______. Different types of bootstrapping: _____

Exploiting a new business opportunity with limited funds; •Owner financing •Sweat equity •Minimization of the accounts receivable •Joint utilization •Delaying payment •Minimizing inventory •Subsidy finance •Personal debt

Open innovation: _____

Generating new business ideas through input from employees beyond a company's R&D department and even going outside the firm to enlist contributions from experts, customers, suppliers, and competitors

Governments have played a large role in the inception of R&D, mainly to fund research for military applications for war efforts. ______ A government can fund R&D directly, by offering grants to universities and research centers or by offering contracts to corporations for performing research in a specific area. _____

Governments play a big role in innovation because of their ability to fund R&D; Governments can provide tax incentives for companies that invest in R&D

•Process innovation is _____ •Process: _____

Implementing a new or significantly improved process; A series of linked activities (steps, tasks, or subprocesses) that produce an intended result

Entering an emerging market with a developed-country brand poses an extra challenge. _____. This low-cost strategy may have consequences for the company's brand

Income levels in emerging markets are lower, so companies tend to price their products as inexpensively as possible

User-led innovation is: _____

Innovation by consumers and end users, who are using (or want to use) the product in new ways beyond what the company originally intended

Entrepreneurship differs in various countries. _____. This will likely have an impact on the level of entrepreneurship in each country. Citizens of different countries vary in terms of their attitudes toward entrepreneurs and entrepreneurship. _____. A country's stage of development influences its nature of entrepreneurial activity

It is easier to do business in some countries than others; A country where people viewed entrepreneurs as positive role models and entrepreneurship as a viable career alternative might encourage others to become entrepreneurs

Decentralized-marketing organizational structure: _____

Local regional headquarters have the power to make marketing decisions affecting their region

Managers should make sure that the pay level is fair relative to what other employees in the position are being paid. ______. Companies conduct a job evaluation to determine the internal value of the job. Job evaluation is ______. Firms seek workers in other countries to take advantage of the low relative cost of labor

Part of the pay level is determined by similar pay levels at other companies; An analysis of the internal value of a job that is intended to identify how critical a given job is to the success of the organization

Intellectual property types include: _____

Patents, Trademarks, Trade secrets and copy and related rights

The product-adaptation strategy is easier for firms to execute than product invention. ______

Product adaptation requires understanding the local market

Global brand is ______. The advantage is ______. The disadvantage is _____

Some of the most recognized brands in the world include Coca-Cola, IBM, GE, and McDonald's; Economies of scale in production and packaging, which lower marketing costs while leveraging power and scope; Consumer needs differ across countries, as do legal and competitive environments

Global Competitiveness Index (GCI): _____

System that ranks nations quantitatively according to a weighted index of twelve assessed pillars: 1.Institutions 2.Infrastructure 3.Macroeconomic stability, health and primary Education 4.Higher education and training 5.Goods-market efficiency 6.Labor-market efficiency 7.Financial-market 8.Sophistication 9.Technological readiness 10.Market size 11.Business sophistication 12.Innovation

1.Straight product extension: _____ 2.Product adaptation: _____ 3.Product invention: _____

Taking the company's current products and selling them in other countries without making changes to the product; The company strategy of modifying an existing product in a way that makes it better fit local needs; Creating an entirely new product for a given local market. Companies go back to the drawing board and rethink how best to design a product for a specific country or region

How low can a company go on quality and performance without damaging the company's brand? ______. Offer the product at quality levels that are the best in that country even though they would be somewhat below developed-country standards

The challenge is to balance maintaining a global reputation for quality while serving local markets at lower cost points

War for talent is: _____. Talent management: ______. It goes hand in hand with succession planning, which is _____

The competition between organizations to attract and retain the most able employees; anticipating the need for human capital and setting a plan to meet it; a process whereby an organization ensures that employees are recruited and developed to fill each key role within the company

World Intellectual Property Organization (WIPO): _____

The global nongovernmental organization tasked with coordinating and marshalling efforts to harmonize intellectual property rights among countries and regions

Centralized-marketing organizational structure: _____

The home-country headquarters retains decision-making power for marketing in all countries

•Research and development (R&D): ______ •Invention: _____ •Innovation: _____

The intertwined processes of research (to identify new knowledge and ideas) and development (turning the ideas into tangible products or processes); Brings an idea into tangible reality by embodying it as a product or process; Generates revenue from a product or process

Licensing is: _____. It is an important way of creating value with assets. _____. The IP protection varies by country

The owner of an asset granting the right to use the asset to another while continuing to retain ownership of the asset; In licensing IP rights, the IP owner gives permission to use the IP but retains ownership of the IP

Market segmentation is ______. It involves ______.

The process of dividing a larger market into smaller markets that share a common characteristic, such as age, gender, income level, or lifestyle; - Understanding your target customers: Products must meet local needs in terms of cost, quality, performance, and features - Consumers in emerging countries •Rising middle class •Millionaires are everywhere •Emerging markets for business customers - Global market research •Understanding the market's culture and social trends •These factors impact which products consumers will like and which advertising appeals will resonate with them

Bias for action: _____

The propensity to act or decide without customary analysis or sufficient information

Entrepreneurship

The recognition of opportunities (needs, wants, problems, and challenges) and the use or creation of resources to implement innovative ideas for new, thoughtfully planned ventures

Channel of distribution is ______

The series of firms or individuals who facilitate the movement of the product from the producer to the final consumer

Many HR managers are more effective in the technical or operational aspects of HR than they are in the strategic. _____

The strategic facet has a much larger effect on the company's success

•Applied research: ______ •Basic research: ______

The systematic work to gain knowledge to meet a specific need; The work of scientists and others who pursue their investigations without commercial goals, focusing on unraveling the secrets of nature and finding new knowledge

In the global economy, managers need to decide between using expatriates or hiring locals when staffing international locations. Expatriate is _____

a person who is living in a country other than his or her home (native) country

The intrapreneurial organization is _____. Methods that have been used by businesses to foster intrapreneurship: _____

one that seeks to systematically promote the spirit of intrapreneurship in targeted parts of the organization; •Intrapreneurial employees are able to participate in the rewards of what they create •The firm treats intrapreneurial teams as a profit center, rather than as a cost center •Team members can choose the projects on which they work or the alliances they join •Employees have access to training to help them learn new skills •Internal enterprises are recognized within the organization and have official standing •The organization defines and supports a system of contractual agreements between internal enterprises •The intrapreneurship plan includes a method for settling disputes that may arise around the internal enterprise and employees

Key HR elements include: ____

selection and placement; job design; compensation and rewards; diversity management

A company's marketing mix will often be different for different countries based on:

•A country's culture and local preferences •A country's economic level •What a country's consumers can afford •A country's distribution channels and media

Workforce scorecard: _____

•An application of the Balanced Scorecard concept to an organization's human capital to identify and measure the behaviors, skills, mind-sets, and results required for the workforce to contribute to the company's success •The Workforce Scorecard is vital because most organizations have much better control and accountability over their raw materials than they do over their workforce

Managers may want to choose an expatriate when the following factors are true:

•Company-specific technology or knowledge is important •Confidentiality in the staff position is an issue •There is a need for speed (i.e., assigning an expatriate is usually faster than hiring a local) •Work rules regarding local workers are restrictive •The corporate strategy is focused on global integration

Questions that HRM should be prepared to answer in this new world: _____

•Competence: To what extent does our company have the required knowledge, skills, and abilities to implement its strategy? •Consequence: To what extent does our company have the right measures, rewards, and incentives in place to align people's efforts with the company strategy? •Governance: To what extent does our company have the right structures, communications systems, and policies to create a high-performing organization? •Learning and Leadership: To what extent can our company respond to uncertainty and learn and adapt to change quickly?

Two ways to achieve keeping star employees: _____

•Connect people with mentors and help them build their networks •Help connect people with a sense of purpose

What do employees want?

•Employees want to grow and develop, stretching their capabilities •Employees want projects that engage their heads as well as their hearts •Employees want to connect with the people and things that will help them achieve their professional goals

Contents of a typical business plan include:

•Executive summary •Company description •Products and services •Market analysis •Proprietary position •Marketing and sales plan •Management team •Operations plan •Finances

Selection and placement strategies include: _____

•Finding and hiring the right employees for your organization and then putting them into the jobs for which they are best suited •Providing an accurate and complete job description is a key step in the selection process •An important determination is whether the candidate's personality is a good fit for the company's culture •Testing and interviewing are common selection methods •Situational interview: A job interview where the candidate is asked to describe in specific and behavioral detail how he would respond to a hypothetical situation

WIPO seeks to: _____

•Harmonize national intellectual property legislation and procedures •Provide services for international applications for industrial property rights •Exchange intellectual property information •Provide legal and technical assistance to developing and other countries •Facilitate the resolution of private intellectual property disputes •Marshal information technology as a tool for storing, accessing, and using valuable intellectual property information

Challenges of a distributed global network of R&D centers: _____

•How to assess the value of a new idea, •How to encourage collaboration across geographical locations and functions •Managing the complexity of global R&D projects

It may be difficult to promote needed organizational changes and manage any conflicts that arise between employees in different countries. _____ Companies should develop an international HR philosophy that describes corporate values about HR

•IHRM professionals can help ensure that top executives understand the different cultures within the company workforce and around the world •IHRM professionals can advice on how to coordinate functions across boundaries and develop outstanding cross-cultural skills in employees

Firms that effectively manage their international HR typically outperform competitors in terms of:

•Identifying new international business opportunities •Adapting to changing conditions worldwide •Sharing innovation knowledge throughout the firm •Coordinating subsidiary operations •Conducting successful cross-border acquisitions •Maintaining a high-performing, committed overseas workforce

•Multi-sourcing advantages involve: _____ •Multi-sourcing disadvantages involve: _____

•More flexibility in times of disruption •Negotiating lower rates by pitting one supplier against another; •Quality across suppliers may be less uniform •Less influence with each supplier •Higher coordination and management costs

2 phases of global start-up assessment include: _____

•Phase 1:Deciding if a firm should become a global start-up •Phase 2: Deciding what the firm needs to do to make that happen

•Sole-sourcing advantages involve: _____ •Sole-sourcing disadvantages involve: _____

•Price discounts based on higher volume •Rewards for loyalty during tough times •Exclusivity brings differentiation •Greater influence with a supplier; •Higher risk of disruption •Supplier has more negotiating power on price

• One method by which a company can manage and run open innovation is to use a contest or "challenge" method • The advantages of the open innovation contest approach include the following: _____

•Reduced cost of R&D •Faster product development time •Access to experts from around the world •Bigger breakthroughs

Areas that global firms must manage when designing their compensation strategy:

•Setting up a worldwide compensation system •Decisions about how to compensate third-country nationals: Third-country national (TCN). An individual who is a citizen of neither the US nor the host country and who is hired by the US government or a government-sanctioned contractor to perform work in the host country •The last three areas of compensation strategy relate to questions about international benefits and related taxes, pension plans, and stock-ownership plans

A manager should give employees reasons to stay with the company including: _____

•Spend time talking with employees about their career goals •Listen to their likes and dislikes so that you can help them fully utilize the skills they like using or develop the new ones they wish to acquire

Factors that contribute to expatriate failure in US-headquartered multinational firms: _____

•The expatriate's spouse is unable to adapt to a foreign culture, or there are other family-related reasons •The expatriate is unable to adjust to the new culture or lacks personal or emotional maturity to function well in the new country •The expatriate is unable to handle the larger overseas responsibilities

History and importance of R&D

•The heyday of American R&D labs came in the 1950s and early 1960s •Companies invest in R&D to gain a pipeline of new products •Innovation includes new product and service combinations

The primary difference between the 2 types of innovators is their context: _____

•The intrapreneur acts within the confines of an existing organization •The intrapreneur is typically the intraorganizational revolutionary •An intrapreneur is someone who operates like an entrepreneur but has the backing of an organization

Managers may want to staff the position with a local hire when the following factors are true:

•The need to interact with local customers, suppliers, employees, or officials is paramount •The corporate strategy is focused on multidomestic or market-oriented operations •Cost is an issue (i.e., expatriates often bring high relocation/travel costs) •Immigration rules regarding foreign workers are restrictive. •There are large cultural distances between the host country and candidate expatriates

As a manager, help your employees identify their goals by asking questions such as the following: ____

•What assignments have you found most engaging? •Which of your accomplishments in the last six months made you proudest? •What makes for a great day at work?