CIA pt. 3

Firm Orientations

1) product-centered firms 2) competitor-centered firms mainly base moves on competitors' actions and reactions 3) customer-centered firms focus on customer developments and delivering value to customers 4) market-centered firms watch both customers and competitors.

Boston Consulting Group's model for portfolio strategy

1. Business Growth Rate: maturity/attractiveness of the market and relative need for cash to finance expansion 2. Market Share

Elements of Cultural Intelligence

1. Cognitive understanding 2. Emotional 3. Physical (tone, gestures, behavior)

Operations Strategies

1. Cost Strategy - Low-cost, undifferentiated, large market 2. Quality Strategy - product and process 3. Delivery Strategy 4. Flexibility Strategy - offer many products, ability to shift product lines rapidly 5. Service Strategy

two-factor theory of motivation

1. Dissatisfiers - absence leads to diminished performance 2. Satisfiers - addition/availability motivates employees

Balanced Scorecard

1. Financial Performance 2. Customer Service 3. Internal Business Processes 4. Learning and growth

Free trade and globalization advantages

1. Lower prices 2. Expand markets and employment 3. Increase profts

Dimensions of Cultural Differences

1. Power distance 2. Individualism-collectivism 3. Masculinity vs Femininity 4. Uncertainty Avoidance 5. Long-term orientation

Classical Perspective of Management

1. Scientific Management - emphasizes production efficiencies 2. Bureaucratic - Efficient military principals 3. Administrative Principles

Competitive Advantage Aspects

1. Target specific customers 2. Take advantage of core competencies 3. Managers think synergistically 4. Provide value to customers

How to minimize risks of expanding into foreign markets and maximize growth potential:

1. Understand how diverse markets connect and capitalize on similarities 2. Build awareness of the product and create sources of brand equity 3. Establish marketing infrastructure 4. Integrate marketing communications 5. Create branding partnerships 6. Determine ratio of standardization and customization 7. Balance global and local control

Theory X and Theory Y

A motivation theory that suggests that management attitudes toward workers fall into two opposing categories based on management assumptions about worker capabilities and values. Autocratic vs permissive management

Multilocal strategy

A strategy in which the organizations in host countries are subsidiaries with their own control of operations.

high context communication

A style of communication in which much of the information is contained in the contexts and nonverbal cues rather than expressed explicitly in words.

low context communication

A style of communication in which much of the information is conveyed in words rather than in nonverbal cues and contexts.

job enlargement (horizontal loading)

A technique to relieve monotony and boredom that involves assigning workers additional tasks at the same level of responsibility to increase the number of tasks they have to perform.

Risks of cost leadership

Advances in technology, imitation by competitors, failure to consider product/marketing changes

North American Free Trade Agreement (NAFTA)

Agreement that created a free-trade area among the United States, Canada, and Mexico.

Polycentric MNC

An MNC that places local nationals in key positions and allows these managers to appoint and develop their own people.

Ethnocentric MNC

An MNC that stresses nationalism and often puts home-office people in charge of key international management positions

Serving the Bottom of the Pyramid

An approach for multinationals to do good Corporations can alleviate problems and make large profits by selling to the world's poor There are more than 4 billion people at the lowest level of the economic pyramid Many companies are adopting BOP strategies

Management by means (MBM)

An approach that focuses people on the methods and processes used to attain results, rather than on the results themselves.

job enrichment (vertical loading)

Any effort that makes an employee's job more rewarding or satisfying by adding more meaningful tasks and duties. Increasing complexity, challenge, and opportunities

Commitment to a group depends on

Attractiveness (view from outside) and Cohesiveness (members adhere to group and unite against outside pressures)

Risks of Cost Focus Strategy

Competitors better at serving their niches, changes in narrow market

Benefits of a Greenfield Venture

Complete control of every aspect of the venture from the beginning and potentially high profits

Regional Strategy

Create regional products and a regional value chain

Strategic control at the business-operating-system level

Customer satisfaction and flexibility (external and internal)

Division of Work (Specialization)

Dividing work into components and specialized tasks to improve efficiency and output

Mission statement

Explain an organization's purpose, values, and competitive scopes

Licensing

Gives firms in foreign countries the right to produce or market products or services within a geographical area for a fee

Star business

High MS, high BGR - strong competitors in high growth market. profitable with large amounts of cash

Cash Cow business

High MS, low BGR - strong competitor; cash generator. high profit margins and economies of scale (hold)

Risks of Differentiation Strategy

Imitation by competitors, change in consumer taste, decrease in brand loyalty

Humanistic Perspective

Individual, social, and group needs and behaviors

General Agreement on Tariffs and Trade (GATT)

International treaty that committed signatories to lowering barriers to the free flow of goods across national borders and led to the WTO

Economic Integration

Joining of markets from 2 + countries into a free-trade zone

Management Complacency

Lack of innovation, faulty perception, failure to observe, not focusing on daily objectives

Operations Strategy

Long-term plan for using resources to reach strategic objectives

Question Mark business

Low MS, high BGR - need cash infusion; become a star or dog depending on MS change (build)

Dog business

Low market share, low BGR - candidate for disposal (divest)

Strategic control at the business-unit level

Performance in the marketplace (external) Financial results (internal)

Strategic control at the departmental or work-center level

Quality and delivery (external) Cycle time and waste (internal)

Favorable effects of informal groups

Reduce tension, encourage production, improve coordination, reduce supervision, assistance in problem solving, faster channel of communication

Cost Synergy

Savings from combinations of common-base operations, resources, and facilities

Operational goals

Set by lower managers and supervisors: short-term, detailed, and measurable

Tactical plans compared to strategic

Shorter-term and more detailed

Performance improves when goals are:

Specific, difficult, and accepted by employees

Functions of norms

Survival of group Defined role Self-image Reinforce values and common identity

Nonconformance costs

The combination of internal failure and external failure costs; the costs incurred when a product is defective and therefore does not conform to its intended design.

Conformance costs

The combination of prevention and appraisal costs; the costs incurred to make sure a product or service is not defective and therefore conforms to its intended design

Sector, industry, segment of Transportation

Transportation Sector Automobile Industry Sedan Segment

Scalar Chain

a chain of authority extends from the top to the bottom of the organization and should include every employee

Greenfield Venture

a foreign subsidiary that the owning organization has built from scratch

formal work group

a group established by management to help the organization achieve its goals

Unity of command

a management principle that workers should report to just one boss

World Trade Organization (WTO)

a permanent global institution to promote international trade and to settle international trade disputes

Groupshift

a phenomenon in which the initial positions of individual group members become exaggerated because of the interactions of the group

Growth-share matrix

a portfolio-planning method that evaluates a company's SBUs in terms of market growth rate and relative market share

Management by Objectives (MBO)

a process of setting mutually agreed upon goals and using those goals to evaluate employee performance

leading indicators

a set of key economic variables that economists use to predict future trends in a business cycle

Strategic Business Unit

a subgroup of a single business or collection of related businesses within the larger organization. Separate planning is possible and it has its own competitors.

Management defined

achieving organizational goals effectively and efficiently by planning, organizing, leading, and controlling

multinational/transnational corporations

an organization that owns or controls productions of goods or services in one or more countries other than the home country. Product is customized for each market

ERG Theory

assumes that three basic needs influence behavior: 1. existence - physical needs 2. relatedness - satisfying relationships 3. growth - needs for development

Glocal strategy

attends to differences in local markets but also carries out some activities on a global basis

Posturing

behave in a way that is intended to impress or mislead others to gain superiority

Positive political behaviors

coalition building, networking, seeking mentors

Key element of crisis prevention

creating strong relationships with stakeholders

Critical Success Factors

crucial steps companies perform to achieve their goals and objectives and implement their strategies

lagging indicators

indicators that seem to lag behind changes in overall business activity (output and financial measures)

Technological Synergy

involves transferring technology from one application to another, thus opening up new markets.

Cost Focus Strategy

keep the costs of a product below those of competitors and to target a narrow market

cost leadership strategy

keep the costs, and hence prices, of a product or service below those of competitors and to target a wide market

Boundary Spanning

links to and coordinates the organization with key elements in the external environment

Vicarious Learning (Observational Learning)

occurs when an individual sees others perform certain behaviors and get rewarded for them

Focused Differentiation

offer products that are of unique and superior value compared to those of competitors and to target a narrow market

Leadership emphasizes

people in the organization

Maslow's Hierarchy of Needs

physiological, safety, love/belonging, esteem, self-actualization

social reinforcement

praise, attention, approval, and/or affection from others

Market Synergy

products or services have positive complementary effects

Political risk

risk of economic loss from the politically motivated actions of governments

Negative political behaviors

sabotage, threats, taking credit for others' work

Global strategy

selling the same standardized product and using the same basic marketing approach in each national market

Disadvantages of Group Decision Making

social pressure, few people dominate, goal displacement, groupthink

Management emphasizes ___________________

stability, reliability, efficiency

Acquired Needs Theory

states that three needs - achievement, affiliation, and power - are major motives determining people's behavior in the workplace

contingency perspective

suggests that appropriate managerial behavior in a given situation depends on, or is contingent on, unique elements in a given situation

Leadership defined

the ability to influence a group toward the achievement of a vision or set of goals

Span of control

the optimal number of subordinates a manager supervises or should supervise. Recent trend - increased span and decreased hierarchy (flatter org chart)

Avoidance Learning (Negative Reinforcement)

the removal of an unpleasant consequence following a desired behavior

unity of direction

the singleness of purpose that makes possible the creation of one plan of action to guide managers and workers as they use organizational resources

Expectancy Theory

the theory that people will be motivated to the extent to which they believe that their efforts will lead to good performance, that good performance will be rewarded, and that they will be offered attractive rewards

Porter's Five Forces

threat of entry, threat of substitute, supplier power, buyer power, and competitive rivalry

The Edisonian approach

to improving creativity is a trial-and-error method. It typically should not be applied unless other approaches have been unsuccessful.

Differentiation Strategy

to offer products or services that are of unique and superior value compared with those of competitors but to target a wide market

geocentric companies

truly world oriented and favor no specific country

Rational Persuasion (Influence Tactic)

trying to convince someone with reason, logic, or facts

International strategy

value chain controlled and marketed in org's home country; products are sold globally

Management Synergy

when a management team is more productive because its members have complementary rather than identical skills. Also involves knowledge transfer