MGMT 301 Exam 3
Four Steps to Control Process
1. Setting STANDARDS 2. MEASURING performance 3. COMPARING performance against the standards and determining deviations 4. Taking action to CORRECT problems and reinforce successes
How to become a multicultural organization
(1) SECURING top management's leadership and commitment (2) ASSESSING the organization's progress toward goals (3) ATTRACTING employees (4) TRAINING employees in diversity (5) RETRAINING employees
International Model
- Managers use their organization's existing core capabilities to expand into foreign markets - Appropriate when there are few pressures for economies of scale or local responsiveness Ex. Microsoft
Types of Budge
- Sales: Forecasts of sales - Production: - Cost - Cash - Capital - Master
Change Specific Reason for Resistance
- Self Interest - Misunderstanding - Different Assessments - Management Tactics
List the Challenges of Diversity and Inclusion
- Unexamined Assumptions - Lower Cohesiveness - Communication Problems - Mistrust and Tension - Stereotyping
3 Stages in Motivating people to Change
- Unfreezing: Breaking from the old ways - Moving - Refreezing
Pressures for Local Responsiveness
- When tastes are different among countries - Economic and Political demands that the host country necessitates.
Competitive Advantage through Diversity and Inclusion
-Ability to attract and retain motivated employees -Better perspective on a differentiated market -Ability to leverage Creativity and Innovation in problem solving due to broader base of experience -Enhancement of Organizational flexibility
Joint Ventures
Advantages: - Local Partner's knowledge of the host country - Shares development costs and risks Disadvantage: - Risk of losing control over its technology to its venture partner - Conflict on moving production
Exporting
Advantages: - Provides scale economies by avoiding the costs of manufacturing in other countries - Is consistent with a pure global strategy - Realize substantial scale economies from its global sales volume Disadvantages: - Inappropriate if other countries offer lower cost locations for manufacturing the product - Expensive transportation cost
Pluralistic
more diverse employee population and take steps to involve persons from different gender, racial, or cultural backgrounds
Affirmative Action
special efforts to recruit and hire qualified members of groups that have been discriminated against in the past
4 factors for Performance Standards
1. Quantity 2. Quality 3. Time used 4. Cost Standards may not be supported by other elements of the control system
General Reasons for Resistance
- Inertia: People don't want to disturb the status quo - Timing: poor timing - Surprise: If the change was a surprise, they'd be against it - Peer Pressure
Inshoring
Moving work back to the United States
Multicultural
Values diversity
Approaches to international business
- Geocentric: use the best methods, no matter what the source - Ethnocentric: Home country methods are the best - Polycentric: Host country methods are the best
Pressures for Global Integration
- Existence of Universal Needs - When people from different countries want a similar product - Pressures to reduce costs - - Presence of competitors with a global strategy
5 Basic ways to Expand
- Exporting - Licensing - Franchising - Entering into a joint venture with a host-country company - Setting up a wholly owned subsidiary in the host country
Transnational Model
- Functions are centralized where it makes sense to do so - But many decisions also take place at the local level - Experiences of local subsidiaries are shared worldwide to improve the firm's overall knowledge and capabilities - "Think Globally but act locally" - Transfer of know-how, and cost economies simultaneously Ex. Unilever
Adapters vs Shapers
Adapters: Take the current industry and it future evolution as givens. They choose where to compete Shapers: Change the structure of their industries, creating a future competitive landscape of their own design
3 broad strategies for achieving organization control
1. Bureaucratic Control 2. Market Control 3. Clan Control
Why people would resist Control Systems
1. Control Systems make it easier to uncover mistakes, THREATENING people's job. 2. Can change expertise and POWER STRUCTURES 3. Can change SOCIAL STRUCTURE by creating competition. 4. INVASION OF PRIVACY
Designing Effective Control Systems
1. Establish a standard 2. Provide enough information 3. Ensure acceptability to employees 4. Maintain open communication 5. Use multiple approaches.
3 Approaches to Bureaucratic Control
1. Feedforward Control: 2. Concurrent Control 3. Feedback Control
Comparing Performance with the Standard
1. Manager evaluates the performance 2. The level of accepted deviance varies in different jobs
4 Factors that lead to Sustained, Superior performance
1. Strategy that is focused on customers 2. Execution by good workers 3. Culture of the company 4. Structure, making it easier to work
Consequence of Increasing Integration
1. Volume of exports increased a lot faster 2. Foreign Direct Investment is playing an ever-increasing role in the global economy 3. Imports are penetrating deeper into the world's largest economies.
When is Offshoring appropriate?
1. Widely available and standardized 2. Not in the early stages 3. If Automation savings are not possible 4. Efficient Supply Chain
3 Ways to measure Performance
1. Written Reports: Include computer generated reports. 2. Oral Reports 3. Personal Observations
After Action Review
An honest and open minded discussion of the action that was taken for continuous improvement.
Control
Any process that directs the activities of individuals toward the achievement of organizational goals
Organization Development
Application of behavioral science knowledge to develop, improve, and reinforce the strategies, structures, and processes that lead to organization effectiveness. Broader approach to changing organizations
Activity Based Costing (ABC)
Assumes that organizations are collections of people performing different but related activities to satisfy customer needs ABS identifies those streams of activity and then to allocate costs across particular business processes.
Diversity Training
Awareness building (meaning and importance of valuing diversity) and skill building
Clan Control
Based on the idea that employees may SHARE the values, expectations, and goals of the organization and act in accordance with them. Does not assume that the interests of the organization naturally diverge
Feedforward Control
Before operations begin Includes policies, procedures, and rules designed to ensure that planned activities are carried out properly Future Oriented Aims to prevent problems before they arise.
Six Sigma
Designed to reduce defects in all organization processes It indicates how often defects in a process are likely to occur Higher the sigma number, the fewer defects. Focuses only on eliminating defects in the process but does not necessarily guarantee the best process for the organization
Genius of the And/Organizational Ambidexterity
Being able to achieve multiple objectives at the same time.
BRICS countries
Brazil Russia India China South Africa
Financial Ratios
Checks on the overall performance of the enterprise. Helps to indicate possible strengths and weaknesses in the company's operations. Disadvantages: 1. Management Myopia (Short Term > Long Term) 2.Often easy to forget other important considerations. Therefore: Should often be supported with some other control measures.
Principle of Exception
Control is enhanced by concentrating on the exceptions or significant deviations from the standard Only the exceptional cases require corrective action Saves time when comparing performance
Management Audits
Evaluates the effectiveness and efficiency of various systems within an organization could be External and Internal
Different ways to manage across Borders
Expatriates, Host country nationals, Third country nations
BREXIT (British Exit from EU)
Failure to serve domestic interests loss of National Identity Currency _________ Crisis
Management Myopia
Focuses on SHORT TERM and dismisses longer terms.
Feedback Control
Focuses on the feedback to take corrective actions
What does the word "Diversity" encompass? (9 things)
Gender, Race, Ethnicity, Nationality, Religion, Disability, Sexual Orientation, Education, and Income
Cooptation
Giving a resisting individual a desirable role in the change process.
Globalization vs Globality
Globalization: Increases in international trade, growing similarity of laws, rules, norms, values, and ideas across countries Globality: End state of globalization - when the process is nearly complete, barriers have fallen, and a new global reality has emerged.
Wholly Owned Subsidiaries
Independent company owned by the parent corporation Advantage: - Reduces risk of losing control over technology - Tight Control over operations in other countries Disadvantage: - Most Costly - Full cost and risk of setting up an overseas operations
Expatriates
Individuals from the parent country Advantage: - Used to market their products abroad more quickly Disadvantage: - Costly
Total Organization Change
Introduces and sustains multiple policies, practices, and procedures across multiple units and levels.
Profit and Loss Statement
Itemized financial statement of the income and expenses of a company's operations. Controlling by Profit and Loss is most commonly used for the entire enterprise.
Licensing
Licensee in another country buys the right to manufacture a company's product in its country for a negotiated fee Advantage: - Company need not bear the cost and risk of opening up an overseas market Disadvantage: - Problems arise when a company licenses its technological expertise to overseas company - it is the basis of the competitive advantage of many multinational companies. -> PEOPLE WILL COPY YOU EASILY
3 Categories of Financial Ratios
Liquidity: Company's ability to pay SHORT TERM debts; Current ratio, indicates the extent to which current assets can decline and still be adequate to pay current liabilities. Leverage: Relative among of FUNDS in the business supplied by creditors and shareholders. Debt Equity Ratio, indicates company's ability to meet its LONG TERM financial obligations Profitability: indicate management's ability to generate a FINANCIAL RETURN on sales or investment; Return of Investment (ROI) PROFIT/CAPITAL USED = RATE OF RETURN FROM CAPITAL.
Managing Diversity
Managing culturally diverse workforce - Understanding and deeply valuing employee differences to build more effective and profitable organizations
US Customs
Meetings Workaholic Schedules Email Fast Trackers Feedback
Third Country Nationals
Natives of a country other than the home country or the host country
Host Country Nationals
Natives of the Host Country
External Audits
One organization evaluates a different organization for its strategic decision making purposes Asks about 1. possible merger or acquisition 2.the status of the major supplier 3. strength and weakness
4 Types of Cultural Differences
Power Distance: power in organizations is distributed unequally Individualism/collectivism: People act on their own or as a part of a group Uncertainty Avoidance: Feel threatened by uncertain and ambiguous situations Masculinity/femininity: Values quantity (Money, Accomplishment) of life over quality (compassion, beauty) of life
Budgetary Controls
Process of finding out what's being done and comparing the results with the corresponding budget data to verify accomplishments or remedy differences. AKA Begins with an estimate of sales and expected income Must have a specific time period Accounting Audits are essential.
Franchising
Sells limited rights to use its brand name to franchisees in return for a lump-sum payment and a share of the franchisee's profits. Has to agree to abide by strict rules regarding how it does business. Advantage: - Put up Capital and assume most of the business risk Disadvantage: - Concerns quality control
Strategy Maps
Show how they plan to convert their various assets into desired outcomes
Balance Sheet
Shows financial picture of a company at a given time 3 elements: Assets, Liabilities, and stockholder's equity Assets = Liabilities + Stockholder's Equity
Offshoring
Specific type of outsourcing whereby companies move jobs to providers in another country, typically where wages are lower -> Saves money on labor
Multinational Model
Subsidiaries in each country in which the company does business and provides a great deal of discretion to those subsidiaries to respond to local conditions Each local subsidiary is a self-contained unit with all the functions required for operating in the host market. These local subsidiaries are nice in customizing or making the product more fitting to the customers in that area. Disadvantage: High Costs and Effort; No Global Attacks on the competitor Ex. Nestle
How to retain employees
Support Groups Mentoring Career Development and Promotions Systems Accommodation Accountability
Ethnocentrism
Tendency to judge foreign people or groups by the standards of one's own culture or group and to see one's own standards as superor
According to the video you saw in Class for Globality, the dabbawalas deliver nearly 2,000,000 lunches every day. Which of the following statement about the dabbawalas is FALSE?
They are increasingly being victimized by globalization True Things: 6 sigma accuracy home cooked meals evolving and adapting to globalization
Tyranny of the Or
Things must be A or B but not Both This belief is often invalid and constraining
Outsourcing
When an organization contracts with an outside provider to produce one or more of its goods or services
Concurrent Control
While plans are being carried out Includes directing, monitoring, and fine tuning activities Heart of the contorl system
Market Control
Use of PRICING mechanisms to regulate activities in organizations as though they were economic transactions Ex. Managers who run these units may be evaluated on the basis of profit and loss
Bureaucratic Control
Use of RULES, regulations, and formal authority to guide performance Designed to measure progress toward set performance goals and to apply corrective measures when they are needed. ex. budgets, statistical reports, and performance appraisals
Deadly Sins of Performance Measurement
Vanity - using measures only to make the organization look good Provincialism - limiting measures to specific departments instead of the organization's overall objectives Narcissism - Measuring from the company's view instead of the customer's view Laziness - Not putting in effort to analyze what is important to measure Pettiness - Measuring only one component inanity - Not considering the way standards will affect people's behavior and company's performance Frivolity - Making excuses for poor performance
Integration-Responsiveness grid
Vertical Axis: Pressures of Global Integration Horizontal Axis: Local Responsiveness - Global: High P, Low R - Transnational: High P, High R - International: Low P, Low R - Multinational: Low P, High R
Monolithic
Very little cultural integration
Global Model
Views the world as a single market. Operations are controlled centrally from the corporate office. - Markets a standardized product in the global marketplace - Find limited number of places that make the product cheaply and well Usually adopted by companies that believe that the world is just one big market. There are no differences between countries. Ex. Nike
Internal Audits
assess what the company has done for itself and its customers
Balanced Scorecard
combination of four sets of performance measures 1. Financial 2. Customer satisfaction 3. Business processes 4 Learning and growth
NAFTA (North American Free Trade Agreement)
combined the economies of the United States, Canada, and Mexico into the world's largest trading bloc
Force Field Analysis
identify specific forces that prevent people from changing and the specific forces that will drive people toward change.