MGMT 1001 Chapter 1

Stakeholder Mapping

1. Map stakeholder relationships with the firm. 2. Identify specific subsets within stakeholders. 3. Determine stakes for each stakeholder. 4. Define connections between stakeholders. It's important to find linkages between your stakeholders, because, like what happened to Walmart, two or more stakeholders can team up against the organization.

Herb Kelleher

CEO of Southwest Airlines, Herb Kelleher, had a vision of replacing long distance car trips with short flights and had a management team to plan and execute it. Organizations need to develop and nurture managers and leaders at all levels, because sometimes it is those more below who greatly evolve the business with their ideas and actions.

Managing Uncertainty

Despite a manager's best efforts, there will always be some level of uncertainty about the direction of the business environment. It is important managers appropriately estimate this level of uncertainty to prepare for competitive threats and capitalize on opportunities. Overestimation may cause them to fail to act by assuming there is nothing they can do about a situation. Low uncertainty requires less vigilance of contextual forces and less adaptation. High uncertainty requires stronger vigilance of contextual forces and more adaptation.

Max Weber

German social scientist who conceptualized and studied bureaucratic organization structure.

Stakeholder View

a business framework that identifies and analyzes multiple groups that interact with the firm and attempts to align organizational practices to satisfy the needs of these various groups.

Managerial View

a business framework where the firm is seen as a mechanism for converting raw materials into products to sell to customers. Focus on relationship with suppliers, customers, owners, and employees.

Shareholder View

a business framework where the job of top managers is to produce the highest possible stock market valuation of the firm's assets. Focus on maximizing returns for shareholders to prevent corporate takeovers. Many businesses acquired other businesses to push against stagnant growth of the economy during 1970's/1980's. Public becoming aware of environmental hazards during the 1980's prompted businesses to factor in their effect on the environment.

Bureaucratic Organization Structure

a clear differentiation of tasks and responsibilities among individuals; coordination through a strict hierarchy of authority and decision rights; standardized rules and procedures; and the vertical separation of planning and execution so that plans are made in the upper ranks of an organization and executed in the lower ranks. Includes government and military.

Scientific Management

a focus on how jobs, work, and incentive schemes could be designed to improve productivity using industrial engineering methods. Idea was to make businesses operate as a machine by studying actions that produced definitive outcomes.

Environmental Scanning

a tool that managers use to scan the business horizon for key events and trends that will affect the business in the future.

Trend Analysis

a tool where key variables are monitored and modeled to help predict a change that might occur in the environment.

Contingent View

a view of the firm where effective organizational structure is based on fit or alignment between the organization and various aspects in its environment. There is "no one size fits all" strategy. By the 1950's, a debate sparked on whether management would be optimal if shaped the same for all businesses or would be optimal if management was based on the nature of the organization (social, psychological, technical, and economic conditions). Firms that emphasize efficiency should maintain stable, mechanistic structure. Firms that emphasize innovation should maintain flexible and organic structure.

BHP Billiton

acquisitioned Tintaya Copper Mine in Peru, which hurt many of the families living in the region. Farmers were paid about $3 per 2.45 acres of land and promised jobs, but the jobs were few in numbers, pushing many local families into poverty. This led to unrest from NGO's and lower classes of society. Waste water from the plant contaminated land and water for locals, making matters worse. In 2003, the Ccanipia group held the manager hostage, and the company negotiated to set up a development fund for the pollution of the water sources they use for local dairy farming. Others angered by this came to protest in front of the plant, prompting them to shut down the mine and evacuate all personnel.

VUCA

acronym for volatile, uncertain, complex, and ambiguous that captures the context in which today's organizations compete. Volatility is unpredictability that requires managers to be agile and flexible. Uncertainty requires manager to gather and decipher large amounts of info. Complexity is the interconnection of various business elements that require managers to separate them for individual responses. Ambiguity is where cause and effect is not clear, requiring experimentation. A VUCA environment requires managers to have knowledge of strategic positioning, organizational design, and individual leadership.

Gordon Bethune

became CEO of Continental Airlines after many failed replacements of Lorenzo, was able to bring the organization to the best performance and reliability of the industry with his long term vision and stakeholder view.

Scenario Building

forecasting the likely result that might occur when several events and stakeholders are linked together.

Frederick Taylor

introduced Scientific Management.

Globalization and Corporate Social Responsibility

now greatly shape the landscape of most businesses. Causes many corporations to focus beyond stockholders to various stakeholders and the environment for a competitive advantage in the marketplace. Walmart, despite its impressive success, has trouble making presence in Vermont and some parts of California due to serious oppression to protect local businesses. To stay competitive, business would have to lower employee wages and health benefits to remain profitable against walmart, which hurts workers and drives up unemployment. By a local referendum, walmart was forced to leave Inglewood, CA.

Frank Lorenzo

pushed his airline, Texas International Airline, into bankruptcy to decrease costs, which increased profits and allowed him to maneuver hostile takeovers of other airlines. He was eventually let go, because his allegiance to shareholders caused for lack of investment, attention to customer needs, and trust from employees.

Peter Drucker

states, "an effective leader is not someone who uses a specific leadership style; he or she is someone whose style enables him or her to obtain results." All individuals, regardless of their position in the business, should exhibit and gain technical (tools and techniques), interpersonal (communication), and conceptual skills (abstract thinking). Upper Level management deals with conceptual skills more.

Leadership

the ability to drive change and innovation through inspiration and motivation.

Contextual Intelligence

the ability to understand the impact of environmental factors on a firm and the ability to understand how to influence those same factors. Requires management to have peripheral vision and see beyond internal operations. 1. Develop appreciation and awareness of history. 2. Stay attuned to trends in environment. 3. Seize firsthand experiences. 4. Engage in scenario building and contingency planning.

Management

the act of working with and through a group of people to accomplish a desired goal or objective in an efficient and effective manner.

Human Relations Movement

the belief that organizations must be understood as systems of interdependent human beings who share a common interest in the survival and effective functioning of the firm.

Business Environment

the combination of all contextual forces and elements in the external and internal environments of a firm.

Strategic Review Process

the process by which senior leaders of a corporation meet with business unit managers to review progress toward specific goals. Can call for strategic planning and projects based on stakeholders.

Contingency Planning

the systematic assessment of the external environment to prepare for a possible range of alternative futures for the organization.