Management Midterm 2
Key ideas behind 'burn your business plan'
Go forward with the process, worry less about the written plan itself.
Individualism
to what extent cultures expect individuals to be self-sufficient versus a group
Femininity
traits of relationships, modesty, caring for weak
Why do managers need to know about tariffs and trade?
while free-trade agreements create new business opportunities, they also intensify competition, and addressing that competition is a manager's job
Logic of Contingency Design
No single best design for all companies and situations - Burns and stalker - Must determine the degree of environmental uncertainty and adapt the organization and its subunits to that situation - Mechanistic versus Organic organizations
Mechanistic organization
- Clear chain of command - Vertical communication - Centralized authority - Low delegation - High specialization
Creative work environment components
- Encouragement from - Organization - Supervisor - Work group - Challenge - Lack of impediments - Freedom also - expertise - positive moods
Getting into business
- Family owned - Starting new - Buy existing - Buy franchise
Preparing for an international assignment
- Language and cross-cultural training - Consideration of spouse, family, and dual-career issues.
budgets
- Most widely used control device - Organizations usually have many o Sales budgets (revenue) o Operating budgets (expenses) o Income statements (revenue, expenses, and net income) o Balance sheet (assets, liabilities, and net worth)
Characteristics of an attractive foreign business climate
- Positions the company for easy access to growing markets. - An effective but cost-efficient place to build an office or manufacturing facility. - Minimizes the political risk to the company.
resistance to change
- Self interest - Easier to do nothing in the short term - Misunderstanding and distrust - Not understanding why change is necessary, not trusting the person doing the change - General intolerance - Intolerance for change and uncertainty
How to make a plan that works
- Setting goals - Developing commitment to the goals - Developing effective action plans - Tracking progress toward goal achievement - Maintaining flexibility in planning.
Organic organization
- Think broadly about who you report to - Lateral communication - Decentralized authority - High delegation - High generalization
what to do when employees resist
- Unfreeze --> Change o Share reasons o Empathize o communicate - Change --> Freeze o Explain o Champion o Opportunities for feedback o Offer security (job security) o Educate o Don't rush
PERT Networks
- if prior data is available, use it - For new tasks, use expert judgment and this formula
Strategy canvas
-Graphical depiction of a company's performance -Relative to its competitors -Viewed across the industry's key success factors
Planning/control tools
-planning & control should be connected -sample methods: *PERT Networks *Gantt Charts
Getting funding
1) Equity 2) Debt 3) Awards from competitions
Characteristics of service provision
1. Customers participate 2. Services are consumed immediately 3. Services are provided where and when customer desires 4. Services tend to be labor intensive 5. Services are intangible (haircut).
Steps in rational decision making
1. Define the problem 2. Identify decision criteria 3. Weigh the criteria 4. Generate alternative courses of action 5. Evaluate each alternative 6. Compute the optimal decision
Forces for internalization
1. Modern communication technology 2. Air travel 3. Corporate globalism
Types of plans, procedures, and rules
1. Starting at the top (vision and mission) 2. Bending in the middle (tactical plans and mgmt. by objectives) 3. Finishing at the bottom (operational plans, standing plans, single-use plans)
Lewin's change model
1. Unfreezing 2. Changing 3. Refreezing
Internalization Process
1. exporting 2. cooperative contracts 3. strategic alliances 4. wholly owned affiliates
3 types of control
1. feedforward control 2. concurrent control 3. feedback control
Components of Economic Value Added
It is the amount by which profits exceed the cost of capital in a given year.
Limited liability company
A business organization in which the business (not the owner) is liable for the company's debts
Proprietership
A business owned by one person
Masculinity
A national culture attribute that describes the extent to which the culture favors traditional masculine work roles of achievement, power, and control. Societal values are characterized by assertiveness and materialism.
What is a mongrel? Why is it a good thing?
A person comfortable in multiple cultures. Allows you to understand cultural differences and values.
Gantt Chart
A time and activity bar chart that is used for planning, managing, and controlling major programs that have a distinct beginning and end.
Control methods
Bureaucratic Objective Normative Concertive Self-control
Stage 4: Wholly owned affiliates
Decide to buy another company in a foreign country and buy it outright
Effective Missions
Define the organizations purpose for stakeholders in a way that is enduring, inspirational, clear, and consistent with company values
Licensing agreement
Foreign business operator pays a licensing fee to have access to business processes
Stage 2: cooperative contracts
Foreign business operator pays local headquarters a fee or royalty to do business in their country - licensing agreement - franchise agreement
Franchise agreement
Foreign operator pays a company a franchise fee and a percentage of sales for right to conduct business
Hofstede's Cultural Dimensions
Long vs short term orientation Uncertainty avoidance Masculinity vs. Femininity Individualism vs. Collectivism Power distance
Types of ownership
Proprietorship/Partnership Corporation Subchapter S-Corporation Limited Liability Company
Quality in service provision (RATER)
Reliability - most important Assurance Tangibles Empathy Responsiveness
Firm level strategies
Strategic Moves in Direct Competition: attacks & responses in red ocean Entrepreneurship: movement into deep blue waters
span of control
The number of people who report to a manager o Narrow spans of control create "tall" organizations o Wider spans of control create "flat" organizations
Tariff trade barriers
a direct tax on imported goods increase the cost of imported goods relative to that of domestic goods
Stage 3: Strategic Alliances
Two companies headquartered in different countries agree to share costs, liabilities, and profits
Creating a sustainable competitive advantage
What you do must be: - valuable - rare - imperfectly imitated - non-substitutable
Organizational development interventions
large system interventions - sociotechnical, survey small group intervention - team building, unit goal setting person focused intervention
Portfolio strategy
a corporate-level strategy that minimizes risk by diversifying investment among various businesses or lines
SWOT analysis
a planning tool used to analyze an organization's strengths, weaknesses, opportunities, and threats
Technology cycles
begins with the birth of a new technology and ends when that technology reaches its limits and dies as it is replaced by a newer, substantially better technology
Industry positioning strategies
cost leadership, differentiation, focus strategy 4 - cost leadership - cost focus - differentiation - focused differentiation
High context cultures
cultures in which nonverbal and situational messages convey meaning relationship is more important than terms
Low context cultures
cultures in which words convey primary meaning nonverbal messages are secondary
Delphi techniques
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
decision-making method that begins and ends by having group members quietly write down and evaluate ideas to be shared with the group.
Experiential innovation
discontinuous o Uncertain environments o Intuition, flexibility o Goal: new product/service
balanced scorecard
encourages managers to look beyond such traditional financial measures to four different perspectives on company performance. Financial, Customer, Internal, Learning
Wide spans of control
flat organizations § A lot of people report to one person § Lower oversight § Higher autonomy § Salary is lower
Stability strategy
focuses on improving the way the company sells the same products or services to the same customers
growth strategy
focuses on increasing profits, revenues, market share, or number of places to do business
retrenchment strategy
focuses on turning around very poor company performance by shrinking the size or scope of the business
Basic departmentalization structures
functional, product, customer, geographic, matrix
Collectivism
group comes first, self comes later
Corporate "Grand" Strategies
growth, stability, retrenchment
Problem at Mustang Jeans
inability to understand cross-cultural differences in communication patterns American manager tried rushing interaction and didn't take time to build relationship. Japanese manager felt uncomfy with changeover and didn't sign contract because of it. Should've tried to build relationship outside of office before getting deal done.
Compression innovation
incremental o Certain environments o Series of steps o Goal: faster/cheaper
equity
investors give you money that they don't expect to ever be repaid, in exchange they receive ownership of the company
Boston Consulting Group Matrix
is a portfolio strategy that managers use to categorize their corporation's businesses by growth rate and relative market share, which helps them decide how to invest corporate funds separates businesses into four categories based on how fast the market is growing (high growth or low growth) and the size of the business's share of that market (small or large).
decentralization
is the location of a significant amount of authority in the lower levels of the organization. An organization is _________________ if it has a high degree of delegation at all levels. In a decentralized organization, workers closest to problems are authorized to make the decisions necessary to solve the problems on their own.
centralization
is the location of most authority at the upper levels of the organization. managers make most decisions, even the relatively small ones
staff authority
is the right to advise but not command others who are not subordinates in the chain of command
Line authority
is the right to command immediate subordinates in the chain of command.
Long term orientation
more focused on the future
Short term orientation
more focused on the present
global new ventures
new companies that are founded with an active global strategy and have sales, employees, and financing in different countries
Non-tariff trade barriers
nontax methods of increasing the cost or reducing the volume of imported goods. quotas, voluntary export restraints, government import standards, government subsidies, and customs valuation/classification
Errors managers make (what NOT to do when leading change)
not establishing a greater sense of urgency not creating a powerful enough coalition Under communicating the vision by a factor of 10 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 corporation's culture
Subchapter S-Corporation
o Exists as separate companies o Earnings are taxed once o Earnings are passed through to owners
Main differences between types of ownership
o How/when earnings are taxed o Liability for debts
Feedback control
o Monitoring outputs o Monitoring products o Learning from past mistakes
concurrent control
o Monitoring processes o Adjusting ongoing activities o Observing problems in real-time and correct them o Productive processes and activities
Corporation
o Separate legal entity for doing business o Exists separately from owners o Legally a person o Earnings are taxed twice
feedforward control
o Using the 6 step control process to monitor the inputs o Set standards for the quality, measure, take corrective action o Anticipating and preventing problems
debt
receiving financing from bank, with expectation that you will return the amount in full plus interest. Don't have to give up any ownership rights
Delegation
responsibility authority accountability
Awards from competitions
rich benefactor, someone just gives you money
Stage 1: exporting
selling products in a different place than its origin
Control process
set standard measure actual performance compare with standard identify deviations analyze deviations take corrective action
Narrow spans of control
tall organizations § A manager oversees a small number of employees § Higher oversight § Lower autonomy § Salary is higher
Uncertainty avoidance
the degree to which societies are willing to tolerate uncertainty and risk high uncertainty avoidance: do not like uncomfortable situations
Power Distance
to what extent are people in the culture comfortable with unequal distribution of wealth, power, resources, authority low: everyone should be equal high: unequal is normal
Chain of command
the vertical line of authority that clarifies who reports to whom throughout the organization