MGT 291 Chapter 1

What are sources of competitive advantage?

- innovation - distribution - speed - connivence - first to market - cost - service - quality - branding

What are the benefits of OB?

- motivates employees & keeps them engaged (job satisfaction) - gives company overall a sense of direction - employee goals are aligned with the overall business strategy = success in completing goals - higher financial performance (ROI, high stock price, operating earnings) - less absenteeism and job turnover --> more $ and better productivity & customer service **** organizations are most effective with effective OB

How can you gain a competitive advantage through OB?

- people are responsible for creating competitive advantage, effective management is key - lower turnover and higher productivity = better customer service than other orgs *** give customers superior value for their money

What are 4 managerial functions?

1. Planning 2. Organizing 3. Leading 4. Controlling

What are the 3 primary business strategies to create competitive advantage?

1. cost leadership 2. differentiation 3. specialization

When companies use a specialization strategy, they develop a competitive advantage based on __________ __________, which is:

Customer intimacy delivering unique and customizable products or services to meet customers' needs and increase customer loyalty

Examples of companies using specialization strategy:

Dunkin Doughnuts, Red Lobster and Starbucks

Successful businesses following a specialization strategy rarely enjoy a high degree of customer loyalty. (True/False)

False

The U.S. workforce is expected to become less diverse in coming years. (True/false)

False

What are some of the current OB issues?

Globalization Technology Ethics Social Responsibility

Dimensions on which the firm can differentiate and companies that use each dimension:

Image (Coca-Cola) Durability (Wrangler clothing) Quality (Lexus) Safety (Volvo) Usability (Apple)

Examples of companies that use differentiation and product innovation strategies:

Nike, 3M

When companies use a cost leadership strategy, they develop a competitive advantage in __________ __________, which is:

Operation Excellence maximizing the efficiency of the manufacturing or a product development process to minimize costs

For companies pursuing a differentiation strategy, the frequent introduction of new products is often a key to staying competitive. (True/false)

True

In addition to better understanding yourself, organizational behavior can help you understand why people and groups behave the way they do in organizations. (True/False)

True

The effective management of people is key to the creation of a competitive advantage and business strategy execution. (True/False)

True

You can pursue more than one strategy at a time? (True/False)

True

When companies use a differentiation strategy, they develop a competitive advantage based on __________ __________, which is:

product innovation developing new products or services

Organizational Behavior

explains and predicts how people and groups interpret events, react, and behave in organizations; describes the role of organizational systems, structures, and processes in shaping behavior

Specialization strategy

focus on a narrow market segment or niche pursuing either a differentiation or cost leadership strategy within a market segment

How can companies be successful using a specialization strategy?

know market segment very well = high degree of customer loyalty successful if it results in lower cost than competitors in the same niche or ability to offer customers something different than competitors

Controlling involves: (managerial function)

monitoring performance to ensure it is consistent w quality & quantity standards and taking actions to get back on track if needed

Issues globalization causes that are relevant to OB:

need for diversity awareness (development of a global mindset)

(1) Issues ethics cause that are relevant to OB & (2) how to eliminate unethical behavior:

1. sometimes there is no clear moral compass to guide employees - omission errors (no written rules) - remission errors (pressure to make unethical decisions) - commission errors (failure to follow established ethical procedures) 2. companies need to manage employee stress -- can cause unethical behavior, and have environment that encourages, not dictates, employees

Example of a company with a cost leadership strategy:

Walmart

Socially responsible programs and policies being implemented by US corporations include:

Work-place diversity Green practices, reducing carbon emissions Work life balance Non-exploitation of workers Community Volunteerism

Which managerial function involves designing the organization's or workgroup's structure, identifying what tasks need to be done, hiring the right people, delegating and assigning each task, establishing a chain of command, and creating rules for communication and decision making? a. organizing b. controlling c. planning d. leading

a. controlling

Organizational members who are responsible for the attainment of organizational goals by planning, organizing, leading, and controlling the efforts of others in the organization are called __________. a. managers b. bosses c. executives d. coordinators

a. managers

Competitive advantage

anything that gives a firm an advantage over rivals in attracting customers and defending itself against competition

What type of companies use a customer intimacy approach?

banking, retail, consulting

Social responsibility

businesses living and working together for the common good and valuing human dignity

The study of organizational behavior can help us to answer which of the following questions? a. Why are some teams more effective than others? b. Why are emotions important at work? c. all of these d. Is there one best way to lead?

c. all of these

Firms pursuing a __________ strive to be the lowest cost producer in an industry for a particular level of product quality a. differentiation strategy b. specialization strategy c. cost leadership strategy d. evaluation strategy

c. cost leadership strategy

Growth strategy

company expansion organically or through acquisitions

Business strategies are ___________. a. neither b. reactive c. planned d. both

d. both

Organizing involves: (managerial function)

designing the org's/ workgroup's structure, identifying what tasks needs to be done, hiring right people, delegating & assigning each task, establishing chain of command, and creating communication and decision making rules

Differentiation strategy

developing a product or service that has unique characteristics valued by customers - value added by the uniqueness may enable the business to charge a higher price for it

Leading involves: (managerial function)

directing and coordinating the work of others, influencing/motivating others, maintaining morale, resolving individual and group conflicts

Companies with cost leadership and operational excellence strategies need to do what in order to be successful?

hire employees that are willing to work on short term projects with short term objectives (MINIMIZES COSTS) rely on more teamwork continually look for ways to be more efficient while keeping costs low and keeping up with competitors

Companies with specialization and customer intimacy strategies need to do what in order to be successful?

hire talent that are active learners, have good customer relation skills, and have emotional resilience under pressure employees need to be cooperative develop effective communication channels

Companies with differentiation and product innovation strategies need to do what in order to be successful?

protect entrepreneurial environment reinforce an innovative culture when hiring, assess if a candidate can work in teams & if he/she is open minded and creative people need to have a long-term focus, high tolerance for ambiguity and interest in learning and discovery

Global mindset

set of individual attributes that enable you to influence individuals, groups, and organizations from diverse socio/cultural/institutional systems

Planning involves: (managerial function)

setting goals, establishing a strategy to pursue those goals, and forecasting future threats and opportunities that might influence a company's needs or strategies

Issues technology causes that are relevant to OB:

some workers will resist learning new technology

Cost leadership

striving to be the lowest cost producer for a particular level of product quality

Organizational culture

system of shared values, norms, and assumptions that guide member's attitudes and behaviors