Management Exam #2

What is a firm-level strategy?

A corporate strategy that addresses the question "How should we compete against a particular firm?" Instead of competing with an entire industry, most firms compete directly with just a few companies within it.Direct competition is the rivalry between two companies offering similar products and services that acknowledge each other as rivals and take offensive and defensive positions as they act and react to teach other's strategic actions.

What is a corporate-level strategy? Describe the major approaches to corporate-level strategy.

A corporate-level strategy is the overall organizational strategy that addresses the question, "What business or businesses are we in or should we be in?" Two kinds of corporate-level strategies are as follows: 4.Portfolio strategy: A corporate-level strategy that minimizes risk by diversifying investment among various businesses or product lines. 5.Grand strategy: A broad corporate-level strategic plan used to achieve strategic goals and guide the strategic alternatives that managers of individual businesses or subunits may use. These strategies include growth, retrenchment/recovery, and stability.

How can companies establish creative work environments?

Companies can use a variety of tools to fashion a creative work environment. First, companies can provide their employees with challenging work that demands attention and focus and is important to others. Managers can also foster creative work environments by encouraging risk-taking and new ideas and setting clear goals. Another way to create creative work environments is by ensuring that work group members have a variety of experiences. Finally, when employees have autonomy over their day-to-day work, a company is more likely to experience the benefits of a creative environment.

How can companies manage resistance to change?

Employees might resist change because of self-interest, misunderstanding and distrust, and a general intolerance for change. Following are the five ways to manage resistance to change. •Education and communication: When resistance is based on insufficient, incorrect, or misleading information, managers should educate employees about the need for change and communicate change-related information to them. •Participation: Employees who participate have a better understanding of the change and the need for it. •Negotiation: Employees are less likely to resist change if they are allowed to discuss and agree on who will do what after change occurs. •Top management support: Resistance to change decreases when change efforts receive significant managerial support. Managers must do more than talk about the importance of change, however. They must provide the training, resources, and autonomy needed to make the change happen. •Coercion: This is the last resort to manage resistance to change and should only be used if a crisis exists or when all other methods have failed.

Describe innovation streams.

Innovation streams are patterns of innovation over time that can create a sustainable competitive advantage from a firm's perspective. The four stages of an innovation stream are as follows. i.Technological discontinuity: This includes scientific advances or a unique combination of existing technologies that creates a significant breakthrough in performance or function. ii.Discontinuous change: This is a phase of a technology cycle that is characterized by technological substitution and design competition. iii.Dominant design: This involves a new technological design or process that becomes the accepted market standard. iv.Incremental change: This is the phase of a technology cycle in which companies innovate by lowering the costs and improving the function and performance of the dominant technological design.

Explain why innovation matters to companies.

It is obvious that technology is rapidly changing our lives. Products that we used yesterday are obsolete today and in some cases not even available. Organizations that do not keep up with these changes are destined for failure. As Jack Welch said, "If the rate of change outside the organization is faster than the rate of change inside the organization, the end is in sight."

List and describe the four main change tools and techniques.

Managers can use a number of change techniques. Results-driven change and the GEWorkout reduce resistance to change by getting change efforts off to a fast start. Transition management teams, which manage a company's change process, coordinate change efforts throughout an organization. Organizational development is a collection of planned change interventions (large system, small group, or person-focused) guided by a change agent designed to improve an organization's long-term health and performance.

What mistakes do managers commonly make when leading change?

The following are some common errors made by managers when they lead change: •Not establishing a great enough sense of urgency •Not creating a powerful enough coalition •Lacking a vision •Under-communicating the vision by a factor of ten •Not removing obstacles to the new vision •Not systematically planning for and creating short-term wins •Declaring victory too soon •Not anchoring changes in the organization's culture

Identify the stages in the phase model of globalization, and explain the level of risk inherent in each.

The phase model of globalization says that as companies move from a domestic to a global orientation, they use these organizational forms in sequence: exporting, cooperative contracts (licensing and franchising), strategic alliances, and wholly owned affiliates. At each step, the company grows much larger, uses those resources to enter more global markets, is less dependent on home country sales, and is more committed in its orientation to global business. The phase model is linear and sequential. As such, the risks associated with global business increase with each new stage. In other words, exporting is the least risky, and wholly owned affiliates are the riskiest. -Exporting: This involves selling domestically produced products to customers in foreign countries. -Cooperative contracts: This includes agreements in which a foreign business owner pays a company a fee for the right to conduct that business in his or her country. -Strategic alliances: This includes agreements in which companies combine key resources, costs, risk, technology, and people. -Wholly owned affiliates: This includes foreign offices, facilities, and manufacturing plants that are 100 percent owned by the parent company.

What are the basic elements of direct competition?

The relationship between two companies offering similar products and services that acknowledge each other as rivals and take offensive and defensive positions as they act and react to teach others strategic actions

Outline steps of the strategy-making process.

The strategy-making process has three steps: 1.Assess the need for strategic change: Managers must determine if strategic change within the organization is needed based on what is happening in the business environment. 2.Conduct a situational analysis: A situational analysis, also called a SWOT analysis, is an assessment of the organization's strengths, weaknesses, opportunities, and threats. The analysis of the strengths and weaknesses represent an internal analysis, while the analysis of opportunities and threats requires external environmental scanning. 3.Choose strategic alternatives: Based on the situational analysis, managers will determine what strategies to follow to successfully achieve goals and objectives.

If, however, companies focus too much on local adaptation...

They run the risk of losing the cost effectiveness and productivity that result from using standardized rules and procedures throughout the world.

How do companies use plans at all levels of management?

Top management: strategic plans, which are overall company plans that include a company vision and mission (2-5 years) Middle management: tactical plans that specify how the company will use resources, budgets and people to accomplish specific goals (6 months-2 years) First Line: operational plans which are day-to-day for producing or delivering products and services (30 day-6 mo). Managers at all levels of a company engage in planning of some kind, but the plans at each level are markedly different in their form and function. Top management develops strategic plans, which are overall company plans that clarify how the company will serve customers and position itself against competitors over the next two to five years. Strategic plans include a company's purpose statement and strategic objectives. Middle management develops tactical plans, which are plans created and implemented by middle managers that direct behavior, efforts, and attention over the next six months to two years. These plans specify how a company will use resources, budgets, and people to accomplish specific goals within its mission. Low-level management develops and implements operational plans, which are day-to-day plans, developed and implemented by lower-level managers for producing or delivering the organization's products and services over a thirty-day to six-month period.

Specific, challenging goals provide provide a target for which to aim and a standard against which to measure success. T or F

True. Goal refers to the desired result that an individual or organization strive to achieve. Goal setting is important part of any organization. Goal should be specific, measurable, accurate, reliable and time bound. Strategy refers to the plan or direction that helps the organization in achieving the goals. So in order to choose a goal and create a strategy , it is important to select specific and challenging goal. Thus, ​Specific, challenging goals provide a target for which to aim and a standard against which to measure success.

Groupthink

a barrier to good decision making caused by pressure within the group for members to agree with each other

Grand strategy

a broad corporate-level strategic plan used to achieve strategic goals and guide the strategic alternatives that managers of individual businesses or subunits may use

Sustainable competitive advantage

a competitive advantage that other companies have tried unsuccessfully to duplicate and have, for the moment, stopped trying to duplicate

Response

a competitive countermove, prompted by a rival's attack, to defend or improve a company's market share or profit

Attack

a competitive move designed to reduce a rival's market share or profits

Firm-level strategy

a corporate strategy that addresses the question "How should we compete against a particular firm?"

Slack resources

a cushion of extra resources that can be used with options-based planning to adapt to unanticipated changes, problems, or opportunities

Devil's advocacy

a decision-making method in which an individual or a subgroup is assigned the role of critic

Dialectical inquiry

a decision-making method in which decision makers state the assumptions of a proposed solution (a thesis) and generate a solution that is the opposite (antithesis) of that solution

Brainstorming

a decision-making method in which group members build on each others' ideas to generate as many alternative solutions as possible

Electronic brainstorming

a decision-making method in which group members use computers to build on each others' ideas and generate as many alternative solutions as possible

Delphi Technique

a decision-making method in which members of a panel of experts respond to questions and to each other until reaching agreement on an issue

Nominal Group Technique (NGT)

a decision-making method that begins and ends by having group members quietly write down and evaluate ideas to be shared with the group

Management by Objectives (MBO)

a four-step process in which (1) managers and employees jointly set objectives for the employee, (2) managers develop action plans, (3) managers and employees periodically review the employee's performance, and (4) the manager makes a performance appraisal and rewards the employee according to results

Threat of new entrants

a measure of the degree to which barriers to entry make it easy or difficult for new companies to get started in an industry

Threat of substitute products or services

a measure of the ease with which customers can find substitutes for an industry's products or services

Bargaining power of buyers

a measure of the influence that customers have on a firm's prices

Bargaining power of suppliers

a measure of the influence that suppliers of parts, materials, and services to firms in an industry have on the prices of these inputs

Strategic objective

a more specific goal that unifies company-wide efforts, stretches and challenges the organization, and possesses a finish line and a time frame

Valuable resource

a resource that allows companies to improve efficiency and effectiveness

Imperfectly imitable resource

a resource that is impossible or extremely costly or difficult for other firms to duplicate

Rare resources

a resource that is not controlled or possessed by many competing firms

Nonsubstitutable resource

a resource that produces value or competitive advantage and has no equivalent substitutes or replacements

Purpose statement

a statement of a company's purpose or reason for existing

Stability strategy

a strategy that focuses on improving the way in which the company sells the same products or services to the same customers

Growth strategy

a strategy that focuses on increasing profits, revenues, market share, or the number of places in which the company does business

Retrenchment strategy

a strategy that focuses on turning around very poor company performance by shrinking the size or scope of the business

[Ch. 5] Planning

choosing a goal and developing a strategy to achieve that goal

Reactors

companies that do not follow a consistent adaptive strategy but instead react to changes in the external environment after they occur

Defenders

companies using an adaptive strategy aimed at defending strategic positions by seeking moderate, steady growth and by offering a limited range of high-quality products and services to a well-defined set of customers

Prospectors

companies using an adaptive strategy that seeks fast growth by searching for new market opportunities, encouraging risk taking, and being the first to bring innovative new products to market

Analyzers

companies using an adaptive strategy that seeks to minimize risk and maximize profits by following or imitating the proven successes of prospectors

Operational plans

day-to-day plans, developed and implemented by lower-level managers, for producing or delivering the organization's products and services over a thirty-day to six-month period

A-type conflict (affective conflict)

disagreement that focuses on individuals or personal issues

C-type conflict (cognitive conflict)

disagreement that focuses on problem and issue related differences of opinion

Options-based planning

maintaining planning flexibility by making small, simultaneous investments in many alternative plans

Strategic plans

overall company plans that clarify how the company will serve customers and position itself against competitors over the next two to five years

Tactical plans

plans created and implemented by middle managers that specify how the company will use resources, budgets, and people over the next six months to two years to accomplish specific goals within its mission

Single-use plans

plans that cover unique, one-time-only events

Standing plans

plans used repeatedly to handle frequently recurring events

Competitive advantage

providing greater value for customers than competitors can

[Ch. 6] Resources

the assets, capabilities, processes, employee time, information, and knowledge that an organization uses to improve its effectiveness and efficiency and create and sustain competitive advantage

Market commonality

the degree to which two companies have overlapping products, services, or customers in multiple markets

Resource similarity

the extent to which a competitor has similar amounts and kinds of resources

Cost leadership

the positioning strategy of producing a product or service of acceptable quality at consistently lower production costs than competitors can, so that the firm can offer the product or service at the lowest price in the industry

Differentiation

the positioning strategy of providing a product or service that is sufficiently different from competitors' offerings that customers are willing to pay a premium price for it

Focus strategy

the positioning strategy of using cost leadership or differentiation to produce a specialized product or service for a limited, specially targeted group of customers in a particular geographic region or market segment

Direct competition

the rivalry between two companies that offer similar products and services, acknowledge each other as rivals, and act and react to each other's strategic actions

Identify the components of a sustainable competitive advantage.

- Valuable resource: a resource that allows companies to improve efficiency and effectiveness. - Rare resource: a resource that is not controlled or possessed by many competing firms. - Imperfectly imitable resource: a resource that is impossible or extremely costly or difficult for other firms to duplicate. - Non-substitutable resource: a resource, without equivalent substitutes or replacements, that produces value or competitive advantage. A competitive advantage is the advantage that a firm has when it uses its resources to provide greater value to the customer than its competitors can. The components of a sustainable competitive advantage are valuable resources, rare resources, imperfectly imitable resources, and non-substitutable resources.

Describe the steps in rational decision making.

1. Define the problem-Managers should identify and define the problem. 2. Identify decision criteria: standards of judgement-Decision criteria are the standards used to guide judgments and decisions. 3. Weigh the criteria: which are more/less important-Two techniques for weighting decision criteria include the absolute comparisons method and the relative comparisons method. 4. Generate alternative course of action: input from others-In general, the idea is to generate as many alternatives as possible. 5. Evaluate each alternative-Managers should systematically evaluate each alternative against each criterion. 6. Compute the optimal decision-In a quantitative analysis, managers should be able to compute the optimal decision by determining the optimal value of each alternative. (The alternative with the best score should "win.")

How can companies build flexibility into their plans?

1. Options-based planning: small, simultaneous investments in many alternative plans 2. Learning-based planning: continually testing, changing and improving plans to learn better ways to achieving goals Companies can use the options-based planning method to build flexibility into their plans. Options-based planning method involves making small, simultaneous investments in many alternative plans. Then, when one or a few of these plans emerge as likely winners, management can invest even more in these plans while discontinuing or reducing investment in the others.

Describe the steps involved in making a plan that works.

1. SMART goals 2. Commitment 3. Action plans 4. Track progress 5. Maintain flexibility The first step in planning is to set S.M.A.R.T. goals—goals that are Specific, Measurable, Attainable, Realistic, and Timely. •The second step in planning is to develop commitment to the goals from the people who contribute to goal achievement. Managers can increase workers' goal commitment by encouraging worker participation in goal setting, making goals public, and getting top management to show support for workers' goals. •The third step in planning is to develop action plans for goal accomplishment. •The fourth step in planning is to track progress toward goal achievement by setting both proximal and distal goals and by gathering and providing workers with regular performance feedback. •The last step in developing an effective plan is to maintain flexibility. Keeping options open through options-based planning and by maintaining slack resources help organizations to maintain flexibility as they plan.

What are Porter's five industry forces, and how do they affect a company's strategy?

1. The character of of the rivalry 2. The threat of new entrants 3. The threat of substitute products or services 4. The bargaining power of suppliers 5. The bargaining power of buyers Together, these forces combine to increase competition in an industry and decrease the profits earned by the companies in the industry. The stronger these forces, the less attractive the industry becomes to corporate investors because it is more difficult for companies to be profitable. Determine industry's overall attractiveness to corporate investors and its potential for long term profitability. High level of new entrants, substitute products or services, bargaining power of buyers and rivalry between competitors combine to increase competition and decrease profits. Stronger the force, the less attractive the industry becomes to corporate investors because it is more difficult for companies to be profitable

List and define the barriers governments erect to control trade.

A tariff is a direct tax on imported goods. It creates a trade barrier by making imported goods more expensive than domestically produced goods. The five non-tariff barriers are: •Quotas: This includes limits on the number or volume of imported products. •Voluntary export restraints: This includes voluntarily imposed limits on the number or volume of products exported to a particular country. •Government import standards: This involves standards imposed by a government to protect the health and safety of citizens; in reality, these are used to restrict trade. •Subsidies: This includes government loans, grants, and tax deferments given to domestic companies to protect them from foreign competition. •Customs classifications: This involves classifications assigned to imported products by government officials that affect the size of the tariff and the imposition of import quotas.

How do change forces work to bring about change? How do resistance forces work against change forces?

According to social psychologist Kurt Lewin, change is a function of the forces that promote change and the opposing forces that slow or resist change. Change forces lead to differences in the form, quality, or condition of an organization over time. By contrast, resistance forces support the status quo, that is, the existing conditions in organizations. People resist change out of self-interest because they fear that change will cost or deprive them of something they value. For example, resistance might stem from a fear that the changes will result in a loss of pay, power, responsibility, or even perhaps one's job. People also resist change because of misunderstanding and distrust; they don't understand the change or the reasons for it, or they distrust the people--typically management--responsible for the change. Resistance may also come from a generally low tolerance for change. Some people are simply less capable of handling change than others are. People with a low tolerance for change feel threatened by the uncertainty associated with change and worry that they won't be able to learn the new skills and behaviors needed to successfully negotiate change in their companies.

What are the advantages and disadvantages of group decision making?

Advantages-- 1. Multiple perspectives 2. Access to much more information 3. Increased knowledge 4. More commitment to making chosen solutions work Disadvantages-- 1. May suffer from groupthink 2. Time 3. Dominant people in the discussion may restrict consideration of alternatives

What is an industry-level strategy? What tools can companies use to develop successful industry-level strategies?

An industry-level strategy is a corporate strategy that addresses the question, "How should we compete in this industry?" Before determining a proper strategy, a company should first examine the five forces that determine its overall level of competitiveness in its industry. Michael Porter's five industry forces include analyzing the character of rivalry, the threat of new entrants, the threat of substitute products or services, the bargaining power of buyers, and the bargaining power of suppliers. Depending on the results of the analyses, a company can choose between two types of industry-level strategies: Positioning strategies: Three types of positioning strategies are cost leadership, differentiation, and focus. Adaptive strategies: Strategies that are best suited to changes in the organization's external environment, such as defenders, prospectors, analyzers, and reactors. 6.

How can companies prepare their managers to be successful expatriate managers?

Companies wanting to send their managers overseas should provide both language and cross-cultural training to both the managers themselves and to their families (spouse and children). There are many types of training programs. These include the following: •Documentary training focuses on identifying the specific differences between the home country and the host country, to which the manager will be sent. •Cultural simulations provide the managers with an opportunity to practice their skills in a simulated environment, such as a party in the host country. •Field simulation training allows managers to spend a few hours or days in a neighborhood with ethnic cultures similar to the ones that will be found in the host country.

Autowizic Inc., an automobile manufacturing company, plans to move its operations to a different city by the end of the year. It sets a target of moving one department by the end of each month, so that all the departments can be moved within a year. In this scenario, Autowizic's plan of moving its operations to a different city by the end of the year is an example of a _____.

Distal Goal

What is the relationship between the phase model of globalization and global new ventures?

Evidence suggests, however, that some companies do not follow the phase model of globalization. Some companies skip phases on their way to becoming more global and less domestic. Others don't follow the phase model at all. These are known as global new ventures, which are new companies with sales, employees, and financing in different countries that are founded with an active global strategy. In other words, global new ventures are global from their inception; they do not start as exporters and evolve to global new ventures. They are global from the start-up stage.

If you become an ______, someone who lives and works outside his or her native country, chances are you'll run into cultural surprises.

Expatriate

Research suggests that the nominal group technique typically produces better decisions than the devil's advocacy and dialectical inquiry approaches. T or F

False-- What's the real answer and why?

Organizational development takes a short-range approach to change. T or F

False. Organizational development is a philosophy and collection of planned change interventions designed to improve an organization's long-term health and performance. Organizational development takes a long-range approach to change; assumes that top-management support is necessary for change to succeed; creates change by educating workers and managers to change ideas, beliefs, and behaviors so that problems can be solved in new ways; and emphasizes employee participation in diagnosing, solving, and evaluating problems.

Identify the major trade agreements that govern global trade.

GATT is the General Agreement on Tariffs and Trade that many countries signed to increase the ease of selling products and services around the world. GATT promoted global trade through the following: -Cutting tariffs worldwide by 40 percent by 2005 -Eliminating tariffs in ten specific industries -Putting stricter limits on government subsidies -Protecting intellectual property rights -Sending trade disputes to the arbitration panels of the World Trade Organization (WTO) Starting with the signing of the Maastricht Treaty in 1992, the European Union has changed trade tremendously among member nations. First, all tariffs and other nontariff barriers have been lifted, making trade totally free. Second, all member nations have a common external trade policy so that nonmember nations are trading with an entire bloc of countries rather than with separate countries. Third, people, capital, and equipment can freely cross EU borders, saving money and time. Fourth, most of the EU members belong to a single economy, run by a centralized European bank and adopting a single currency, the Euro. The creation of the European Union has made western Europe a more powerful trading bloc. NAFTA—the North American Free Trade Agreement—is the free trade area of Canada, Mexico, and the United States. It has changed trade tremendously by eliminating most tariff and nontariff barriers among the member nations (the last set of barriers were eliminated in 2003). CAFTA—the Central American Free Trade Agreement—is a regional trade agreement between Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, and the United States. ASEAN is the Association of Southeast Asian Nations and consists of the following Southeast Asian countries: Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. ASEAN became a free trade area in 2015 for the original six countries and will become one by 2018 for the remaining countries. APEC is the Asia-Pacific Economic Cooperation that includes all ASEAN countries except Cambodia, Lao PDR, and Myanmar, all NAFTA countries, and the following countries: Australia, Chile, the People's Republic of China, Hong Kong (China), Japan, New Zealand, Papua New Guinea, Peru, Russia, South Korea, and Taiwan. It is, thus, a much larger trade agreement that includes the three largest economies in the world: the United States, China, and Japan. By 2020, trade barriers will be reduced in all member nations.

Describe the impact of global business as it relates to direct foreign investment.

Global business affects the United States in two ways: through direct foreign investment in the United States by foreign companies, and through U.S. companies' investment in business in other countries. Direct foreign investment throughout the world typically amounts to about $4.6 trillion per year. Between 2003 and 2004, direct foreign investment in the United States and by the United States soared.

What are the trade-offs between global consistency and local adaptation?

Global consistency and local adaptation are two optional strategies that companies can use when they have worldwide operations. In global consistency, a company would run its offices, plants, and facilities around the world based on the same universal rules, guidelines, policies, and procedures. The advantages of global consistency are that it creates cost efficiencies and consistent product imagery worldwide. In local adaptation strategy, the company would modify its standard operating procedures to adapt to differences in foreign customers, governments, and regulatory agencies. Other advantages of this strategy are that it addresses specific local needs, such as different consumer tastes and employee issues.

Identify three grand strategies, and give examples of each.

Growth- can grow externally by merging with or acquiring other companies or grow internally through direct expansion or creating new businesses. Stability- when their external environment changes very little or after they have dealt with periods of explosive growth Retrenchment- shrinking the size or scope of a business, is used to turn around poor performance Recovery strategy that focuses on growing the business again.

Describe Hofstede's dimensions of national culture.

Hofstede's cultural dimensions are as follows: •Power distance: This is the extent to which people in a country accept that power is distributed unequally in society and organizations. •Individualism: This is the extent to which societies believe that individuals should be self-sufficient. •Short- or long-term orientation: This is whether cultures are oriented to short-term (immediate gratification) or long-term (defer gratification for greater good) goals. •Masculinity or femininity: This is the extent to which cultures are highly assertive (masculine) or nurturing (feminine). •Uncertainty avoidance: This is the degree to which people in a country are uncomfortable with uncertainty or ambiguity. Companies can use this information in order to formulate strategies in many different areas, such as how to compensate or motivate global workforces, whether or not to include employees who are at a lower level in decision-making, and how much direction to give employees.

Imperfectly imitable resources-- Imperfectly imitable resources are those resources that are impossible or extremely costly or difficult to duplicate.

Impossible or extremely costly or difficult to duplicate. Valuable, rare, imperfectly imitable resources can produce sustainable competitive advantage only if they are also nonsubstitutable resources.

What are the benefits and pitfalls of planning?

Planning offers several important benefits: Intensified effort, persistence, direction, and creation of task strategies. The first thing is managers and employees put forth a greater effort when following a specific plan. Second, planning leads to persistence, working hard for long periods of time. The third benefit of planning is direction. Having set plans encourage managers and employees to direct their persistent efforts toward activities that help accomplish their goals and away from the activities that don't.B) The first pitfall of planning is that it can impede change and prevent or slow needed adaption. Sometimes companies become so committed to achieving the goals set forth that they fault o see that their plans aren't working or that they need to change their goals. The second pitfall is that planning can create a false sense of certainty. Planners sometimes feel that they know exactly what the future holds for their competitors, their suppliers, and their companies. The third possible pitfall of planning is the detachment of planners. Detachment leads planners to plan for things they do not understand. Plans are meant to be guidelines for action and not abstract theories. Planners need to be familiar with the daily details of their business to be able to produce plans that can work.

When conducting global business, companies should attempt to identify two types of political risk. What risk?

Political Uncertainty and Policy Uncertainty.

The managers of Danestump, a hardware manufacturing company, are expected to follow standing plans before approving long leaves applied by their subordinates. The standing plans detail the specific steps to be followed when approving such leaves. Given this information, the standing plans in this scenario can be referred to as _____.

Procedures

What are proximal and distal goals? Which type of goal is more effective?

Proximal are short term goals; distal goals are long term or primary goals. Proximal goals are more easily attained and provide motivation when reached; make it easier to track progress and feel like you're making progress. The idea behind setting proximal goals is that achieving them may be more motivating and rewarding than waiting to reach far-off distal goals. People do a better job of tracking the quality and timeliness of their work when managers use proximal goals to set multiple deadlines. Proximal goals are more effective than distal goals. People react differently to goals and are more successful with what motivates them, when both of these types of goals are used simultaneously that is the most effective type of goal setting.

What are the two factors that help companies determine the growth potential of foreign markets?

Purchasing power and foreign competitors

What are S.M.A.R.T. goals?

Specific, Measurable, Attainable, Realistic, Timely

What are decision criteria, and how are they used in decision making?

Standards used to guide judgements and decisions; more criteria the decision meets, the better it is. Decision criteria are the standards used to guide judgments and decisions. Typically, the more criteria a potential solution meets, the better that solution should be. Managers typically weigh decision criteria by using either the absolute comparisons method or the relative comparisons method. With absolute comparisons, managers compare each decision criterion to a standard or rank it on its own merits. The idea is to score each possible solution according to each criterion. Conversely, relative comparisons allow managers to compare each decision criterion with every other criterion. For example, managers could decide that criterion A is twice as important as B but only half as important as C. Prioritizing the criteria is equivalent to assigning weights to each and then computing a score for each alternative solution.

What is the difference between incremental change and discontinuous change?

Technological discontinuities are followed by a discontinuous change, which is characterized by technological substitution and design competition. Technological substitution occurs when customers purchase new technologies to replace older technologies. Discontinuous change is also characterized by design competition, in which the old technology and several different new technologies compete to establish a new technological standard or dominant design. Because of large investments in old technology, and because new and old technologies are often incompatible with each other, companies and consumers are reluctant to switch to a different technology during design competition. At a certain point, a dominant design will emerge. That is, a specific design becomes the accepted new market standard for technology. This can happen because most people use the design (i.e., it has critical mass), or because it solves a practical problem. The emergence of a dominant design signals a shift from design experimentation and competition to incremental change, a phase in which companies innovate by lowering the cost and improving the function and performance of the dominant design. This focus on improving the dominant design continues until the next technological discontinuity occurs

What is the relationship between technology cycles and the S-curve pattern of innovation?

Technological progress is slow and improvement in performance are small. Performance improves quickly. Limits of technology are reached, small improvements occur. New technologies emerge until it is dominate over old technology.

What is global business?

The buying and selling of goods and services by people from different countries. Buying this textbook was a business transaction. So was selling your first car. So was getting paid for babysitting or for mowing lawns. Global business is the buying and selling of goods and services by people from different countries. Companies that own businesses in two or more countries are called multinational corporations (MNCs). In 1970, more than half of the world's MNCs were headquartered in the United States. In subsequent decades, the economies of other nations grew stronger, such that MNCs can be found by the thousands all over the world.

Compare the experiential approach to managing innovation with the compression approach.

The experiential approach to innovation assumes that innovation is occurring within a highly uncertain environment and that the key to fast product innovation is to use intuition, flexible options, and hands-on experience. By doing so, firms can reduce uncertainty and accelerate learning and understanding. The steps to the experiential approach are as follows: •Design iterations •Testing •Milestones •Multifunctional teams •Powerful leaders In contrast, the compression approach to innovation assumes that innovation is a predictable process, incremental innovation can be planned using a series of steps, and compressing those steps can speed innovation. It is used in an environment that is certain and when the firm has entered an era of incremental change with established technology. The steps to the compression approach are as follows: •Planning •Supplier involvement •Shortening the time of individual steps •Overlapping steps •Multifunctional teams

What should companies consider when choosing a global location for doing business?

The first step in deciding where to take your company global is finding an attractive business climate. Be sure to look for a growing market where consumers have strong purchasing power and foreign competitors are weak. When locating an office or manufacturing facility, consider both qualitative and quantitative factors. Two key qualitative factors are workforce quality and company strategy. Workforce quality is important because it is often difficult to find workers with the specific skills, abilities, and experience that a company needs to run its business. A company's strategy is also important when choosing a location. For example, a company pursuing a low-cost strategy may need plentiful raw materials, low-cost transportation, and low-cost labor. Quantitative factors include the kind of facility being built, tariff and nontariff barriers, exchange rates, and transportation and labor costs. Those factors should also be considered when choosing an office and/or manufacturing location. When conducting global business, companies should attempt to identify two types of political risk: political uncertainty and policy uncertainty. Political uncertainty is associated with the risk of major changes in political regimes that can result from war, revolution, the deaths of political leaders, social unrest, or other influential events. Policy uncertainty refers to the risk associated with changes in laws and government policies that directly affect the way foreign companies conduct business. Policy uncertainty is the most common form of political risk in global business and perhaps the most frustrating. If the location you choose has considerable political risk, you can avoid it, try to control the risk, or use a cooperation strategy.

Rules and regulations

standing plans that describe how a particular action should be performed or what must happen or not happen in response to a particular event

Policies

standing plans that indicate the general course of action that should be taken in response to a particular event or situation

Procedures

standing plans that indicate the specific steps that should be taken in response to a particular event

Identify the methods of group decision making and give a brief description of each.

•Structured conflict: Two structured conflict techniques are described: devil's advocacy and dialectical inquiry. Devil's advocacy is a decision-making method in which an individual or subgroup is assigned the role of critic. Dialectical inquiry is a decision-making method in which decision makers state the assumptions of a proposed solution (a thesis) and generate a solution (thesis) that is the opposite (antithesis) of that solution. •Nominal group technique: It is a decision-making method that begins and ends by having group members quietly write down and evaluate ideas to be shared with the group. This method improves group decision making by decreasing a-type conflict. •Delphi technique: It is a decision-making method in which the members of a panel respond to questions and to each other until reaching agreement on an issue. Thistechnique would be effective for important, long-term issues since it is labor-intensive, expensive, and time-consuming. •Electronic brainstorming: This is a decision-making method in which group members use computers to build on each other's ideas and generate as many alternative solutions as possible. It also overcomes the disadvantages associated with face-to-face brainstorming, namely production blocking (that is, a disadvantage of face-to-face brainstorming in which a group member must wait to share an idea because another member is presenting an idea, and then most likely forgetting it while others are speaking) and evaluation apprehension (that is, being afraid of what others may think of one's ideas).