MGMT Exam 2

Matrix + —

+ satisfying *more than one area* — creates a lot of *confusion*, and is difficult to pull of ***Benefit of organizing by function: work is done by specialists ***Drawback of organizing by function: slow decision making

Definition of management

- *Getting work done through others* - Concerned with efficiency and effectiveness in the work place - Help others do their jobs

Gaining management skills

- *Reading, Reflection, Relationships, Real experience* - combining multiple sources - self management

What to do when employees resist (lecture only)

*UNFREEZE*--> *share reasons*, empathize, communicate--> *CHANGE*--> explain, champion, opportunities for feedback, offer security, *educate, no rush*--> *FREEZE* *encouragement*, don't underestimate this phase

Lewin's change model (lecture & text, sec 7-4a, pp. 150-151)

*UNFREEZE*--> driving forces *overpower restraining forces*--> *CHANGE*--> new restraining forces *create*d to establish *new status quo*--> *FREEZE* Develop your organization based on changes Freeze people into a new behavior

Mechanistic

*VERY PREDICTIVE* Very clear chain of command Vertical communication Centralized authority Low delegation of authority High specialization *more compression/increments*

Organic

*VERY UNPREDICTIVE* Think broadly about who you report to Lateral communication Decentralized authority High delegation High generalization *more experiential/breakthrough*

Corporate social responsibility definition (lecture & text; sec. 4.6, pp. 85-87)

*a business's obligation to* pursue policies, make decisions, and take actions that *benefit society* in a broader way -- ethical, economic, legal, and discretionary

3. Person-focused interventions ex

*counseling/coaching*: a formal helper or coach listens to managers or employees and advises them on how to deal with work or interpersonal problems *training*: provide individuals with the knowledge, skills, or attitudes they need to become more effective at their jobs

Ethical intensity (lecture & text)

*degrees of concern* people have about an ethical issues-- managers are more aware with high levels of ethical intensity

Components of a triple bottom line (reading)

*people, planet, profits* - businesses can and should contribute toward the common good

1. Large-system interventions ex

*sociotechnical systems*: improve how well employees use and adjust to the work technology used in an organization *survey feedback*: uses surveys to collect information, reports the results of that survey back, and then uses those results to develop action plans

Types of conflict (and how to increase desirable conflict)

*task* conflict (beneficial) - devil's advocate - listen and then repeat for understanding - nominal group technique (work first as individuals) *relationship* conflict (harmful) - "I don't like your idea"

2. Small-group interventions ex

*team building*: increase the cohesion and cooperation of work group members *unit goal setting*: an intervention help a work group establish short- and long-term goals

CSR relationship with economic performance (lecture & text; sec. 4.8, pp. 89-90)

- *small positive relationship* - no tradeoff between being socially responsible and economic performance - the costs of being socially responsible can be offset by a better product or corporate reputation which results in higher/stronger sales or profit margins - *Enhance reputations by being socially responsible* = max willingness to pay — customers paying more for products/services

Encouraging ethical behavior (lecture & text)

- Recruit, select, & *hire* ethical people - Establish a *code of ethics* - Provide *training* - Create an ethical *climate* - *Measure and enforce*

Enhancing work-team effectiveness (section 10-4 headings and key points; pp. 215-220)

- Setting Team Goals and *Priorities* - *Stretch goals* - Selecting People for *Teamwork* - Team Compensation and *Recognition*

Team leader role and responsibilities (text only, sec. 1- 3d, pp. 9-10)

- facilitating team activities to *accomplish a goal* (not team performance) - bringing intellectual, spiritual, and emotional *resources to the team* - facilitation and internal/external *relationships*

Norms - how to set and maintain (lecture)

- formal *writing agreements* (team charter) - team manager's *repeated actions* - team's *responses* to critical events

Maximizing benefits of diversity (lecture)

- get to know one another's *backgrounds* - create time/space for *questions* - assume the *best intentions*

Culture formation and maintenance (text; 3-5a, pp. 1- 62)

- primary source = company founder (ex: Walt Disney and his creation of Disney's culture) - organizational stories: told my members to make sense of organizational events and changes and to emphasize culturally consistent assumptions, decisions, actions - organizational heroes: people celebrated for their qualities and achievements within an org

BP's story (lecture)

- reports multiple bottom lines (safety & environment, people, financial) - first oil company to acknowledge links between *carbon dioxide emissions and climate change* - *failed for a long time and became accommodative*

Objective

--(measures) --Behavior control: regulating behaviors and actions that workers perform on the job --Output control: measures the results of managers and workers' efforts a. Measures must be reliable, fair, and accurate b. Must believe that they can produce desired results c. Rewards must be dependent on the performance/standards

Bureaucratic

--(rules) top down control --if people don't follow rules they get punished if they do they get rewards --(design to maximize efficiency and effectiveness and fairness but often does the opposite)

Concertive

--(shaped by groups) --value based control set by self managing/work groups --now they have to satisfy the whole group not just the boss --arise when companies give work groups complete autonomy and responsibility for task completion

Normative

--(values and beliefs) --set standards based on people's values and beliefs that will guide their behavior a. very careful about who is hired b. observing experienced employees (do's and don'ts)

Self control

--self control/management you set your own standards and measure your own performance --leaders provide general boundaries for everyone

Budgets, perf. reports, variance analysis (Sec. 16-3b, pp. 352-355; Baker Budget in-class activity)

-Cash flow analysis -Balance sheets -Income statements -Financial ratios -Budgets -Zero-based budgeting (down to the number of color photocopies to garbage bags used) VA: the difference between the budget and the actual amount BBA: Favorable (+) and Unfavorable (-) --normally

Each stage of self-management process (lecture only)

1) *Self-Assessment & Planning* (organizing) 2) *Goal Setting* (organizing) 3) *Self & Environmental Control* (leading--overcoming obstacles, maintaining moral) 4) *Evaluating and Rewarding Progress*--(control--taking corrective steps to find the solution)

Getting funding (lecture)

1. (Owners) Equity—investors give you money, they own a percentage of the profits 2. Debt—Banks, friends, loans, interest/payback 3. Awards from competitions

Problem @ Mustang Jeans (video in lecture)

1. (switched initial connection) failed to pay attention to the different cultural behavior 2. Nodeo has all the power because he has many suppliers and Micheal has none because he only has one outlet 3. The person without the power should adapt to the person who does because they probably won't be able to change anything

Characteristics of service provision (reasons why it's hard to maintain control)

1. *Customers participate*--hard to standardize because everyone's different and makes it hard to set standards 2. *HOW MUCH* Services are consumed immediately--hard to manage the right amount of service available 3. *DEMAND* Services are provided where and when the customer desires--high demand times vs low demand times 4. Services tend to be *labor* intensive--you can't mass produce many services (hard to train growing number employees all the same way) 5. Services are *intangible*--hard for customers to know what they're getting ahead of time, so by the time they get the service it is too late (hairstylist)

Steps in rational decision making (text sec. 5- 4a,b,c,d,e,f; pp. 103-106)

1. *Define the problem* (must have resources to solve) 2. *Identify decision criteria* (old or young, women or men) 3. *Weigh the criteria* (which are more or less important?) a. *absolute comparisons*: decisions compared to standard/ranked on own b. *relative comparisons*: decisions compared to standard/ranked next to other options 4. *Generate alternative courses of action* (as many as possible) 5. *Evaluate each alternative* (higher score is better-long and expensive step, research & interviews) 6. Compute the optimal *decision* pg. 106

Creative work environment components (lecture & text, sec 7-2a, pp. 143-145)

1. *Encouragement* from: --Organization "no idea is too crazy to be discussed" --Supervisor—encouragement sharing instead of hiding, give every idea a chance --Work Group—disagree about ideas/debate/constructive criticism 2. *Challenge*—stimulate creativity in challenging environments (when work is demanding that tends to bring out the best in people) 3. *Lack of impediments*—personal or political conflicts, inflexibility in thinking, power struggles 4. *Freedom*—giving to employees control for what they do/ownership (credit for what you come up with) Two factors not mentioned in book that help: --*Expertise*: must have old ideas (creativity is old ideas that have never been done before) Connecting ideas in new ways (ideas must be there in order to be connected) --*Positive mood*: improves mental flexibility, will be more creative if you are in a better mood

Experiential and compression innovation (lecture & text, sec 7-2b&c, pp. 145-148)

1. *Experiential (Discontinuous)*--technological breakthrough, future much different than past (electricity) --*Uncertain* environments --Intuition, flexibility --Goal: *New* product/service Example: driverless cars --harder to create 2. *Compression (Incremental)*--improvements --*Certain* environments --Series of steps, small improvements on the already existing theory --Goal: faster/cheaper/*better* Example: iPhones --set goals a bit better than before

Balanced scorecard (four main components illustrated by Southwest Airlines example) (Sec. 16-3a, pp. 352- 353; Ex 16.2)

1. *Financial perspective*--market value, seat revenue, plane lease costs 2. *Customer perspective*--on-time arrival rating, ticket pricing compared to others 3. *Internal business perspective* (quality of mgmt)--percentage of planes that depart on time, how long plane takeoff time takes 4. *Innovation and learning perspective*--workers who own company stock and have received company training **Suboptimization occurs when performance improves in one area at the expense of decreased performance in another

Grand strategy

1. *Growth strategy*: companies who have a goal to increase revenues, profits, expand number and type of products or services they offer a. *Internally*: decide to open new lines of products or services (crocs) b. *Externally*: buy other companies/merge or acquire (Facebook) to discount their services to customers (combine TV & internet) 2. *Stability strategy*: companies are fine with staying where they are, try to improve the way in which they sell the same products to the same customers 3. *Retrenchment strategy* (refresher/cycle): underperforming companies that have to find a way to turn around company performance 1st cost reductions/reducing business a business size or scope 2nd recovery (returning to growth strategy)

Org. Development Interventions, 3 types and examples of each (text, ex. 7.6, p. 155)

1. *Large-system interventions*: sociotechnical systems, survey feedback 2. *Small-group interventions*: team building, unit goal setting 3. *Person-focused interventions*: counseling/coaching, training

Ethical principles (lecture & text)

1. *Long-term self-interest* Only take actions that will benefit company's long-term self-interest 2. *Personal virtue* Always be open, honest, truthful, and never do anything that you wouldn't want to be published on the *front page of the news paper* 3. *Religious Injunctions* You will never take an action that is *unkind or harms a sense of community* 4. *Government requirements* Obey the *law*, simply obey rules 5. *Utilitarian benefits* Do whatever creates the *greatest good for the greatest number* of people 6. *Individual rights* Don't infringe on *agreed upon rights* 7. *Distributive justice* Never take an action that *harms the less fortunate* in some way, look out and care for the needy

Four functions

1. *Planning* - *Setting goals*, develop rules/procedures - Future thinking 2. *Organizing* - *Who is going to do what and when and who will do them* - How to coordinate all the completed tasks - Identifying jobs to be done - *Hiring, delegating*... 3. *Leading* - *Inspiring* others to get the job done in the face of obstacles/difficulty - Setting a tone for the company - Want people *motivated* to completing the company's goals - *Influencing* others - Maintaining *morale* - Molding the company culture 4. *Controlling* - *setting standards* - comparing performance with standards - taking *corrective action*

Stages of Moral Development (lecture & text)

1. *Pre-conventional* (self-interest -- children) stage 1: *punishment and disobedience* -- anything to avoid trouble for yourself stage 2: *instrumental exchange* -- less about punishment and more about what you will get in return 2. *conventional* (societal expectations-- looking to external guides) stage 3: *good boy, nice girl* -- teenagers -- do what others do stage 4: *law and order* -- adults -- do what law permits 3. *post conventional* (internalized principles -- 1/5 get here) stage 5: *social contract* -- society is better off when the ind. rights of others are not violated stage 6: *universal principle* -- stick to your own beliefs of right/wrong regardless of what the law/others say

Quality in service provision (RATER)

1. *Reliability* (most important)--provide what you promised the first time 2. *Assurance*--instill confidence in your customers Hiring employees who are actually knowledgeable and kind 3. *Tangibles*--good at what you do? Nice building? Professional employees? Good website? 4. *Empathy*--employees have customer's best interest in heart 5. *Responsiveness*--willing to go out of your way to make whatever went wrong right

Resistance to change (lecture & text, sec 7-4, pp. 149- 150)

1. *Self-interest* people don't like to change, most people fear that in changing they have to give up do something that they like now for an uncertainty long term benefit 2. *Misunderstanding and distrust* when things need to change people might not understand the reasons why or they may not trust top mgmt telling them why they should change 3. *General intolerance* we feel *uncomfortable* and want to retreat to our comfort zones (feel threatened)

How to make a plan that works (text ex 5.1; p. 95)

1. *Set goals* (SMART--specific, measurable, attainable, realistic, and timely) 2. *Develop commitment* 3. *Develop* effective action *plans*: Who What When How 4. *Track progress* toward goal achievement (distal, proximal) 5. *Maintain flexibility* 6. *Revise* existing plan or begin planning process anew *(repeat)*

Control process

1. *Set standard*: acceptable performance vs unacceptable performance 2. *Measure actual performance*: go out and do the work and measure the results 3. *Compare with standard*: step two minus step one 4. *Identify deviations*: identify differences, where has the performance differed from the standard? (identify zeros) 5. *Analyze deviations*: analyze those differences (interpret it) is it beneficial? is it bad? 6. *Take corrective action*: decide what we need to do to correct the discrepancy between our standard and performance (slow down, speed up, adjust the standard if out of reach)

Boston Consulting Group (from text, Sec. 6-3a; pp. 121-125)

1. *Stars*: companies that have a large share of a fast-growing market (corporation must invest substantially in the star because it has a large share) 2. *Question marks*: companies that have a small share of a fast-growing market (corporations could invest and maybe become stars but it is risky to take on the weakness of small shares) 3. *Cash cows*: companies that have large share of a slow-growing market (corporations are often highly profitable here) 4. *Dogs*: companies that a small share of a slow-growing market (non profitable)

Levels of culture (lecture & text)

1. *Surface Level* *SEEN* *Symbolic artifacts* Behaviors (easily observable) *What you wear*, etc 2. *Expressed Values and Beliefs* *HEARD* What people say How decisions are made Heroic actions in past people have told (*stories* communicate how things are done) Unconsciously Held Assumptions 3. *Beliefs* *BELIEVED* Beliefs and assumptions *Rarely discussed* *Subconsciously* we just believe that's what we do around here

Managerial skills

1. *conceptual* skills - *big picture* - how parts of the company fits together - how company fits into broader economy - internal and external operations more important for *higher levels of management* 2. *human* skills - ability to work well *with people* most important of the 3 skills 3. technical skills - knowledge, techniques, *ability to get a task done*

Component of specific environment (lecture & text)

1. *customers* two basic strategies for monitoring customers: a. *reactive* -- identifying and addressing customer trends and problems as they occur b. *proactive* -- identifying and addressing needs, trends, issues before they occur 2. *competitors* - competitor: companies in the same industry that sell similar products - competitive analysis: process for monitoring competitors by identifying the competition, anticipating moves, determining strengths/weaknesses, - managers often underestimate their competitors or just fail to identify them 3. *suppliers* - suppliers: companies that provide material, human, financial, and informational resources to other companies - supplier dependence: the degree to which a company depends on a supplier -- key factor on the relationship between company and supplier - buyer dependence: the degree to which a supplier relies on a buyer - opportunistic behavior: when one party benefits at the expense of another - relationship behavior: establishment of mutually beneficial, long term exchanges b/t a supplier and buyer 4. *industry regulation* regulations and rules that govern the business practices and procedures of *specific industries*, businesses, and professions 5. *advocacy groups* - *concerned citizens* who band together to influence the business practices of specific businesses, industries, and professions - public communications: tactic using voluntary participation by the media and the ad. industry to get their message out - media advocacy: tactic involves framing issues as public issues, exposing questionable/unethical biz practices, forcing media coverage to create controversy - *product boycott*: tactic used to protest a company's goods or services

Three types of control (Sec. 16-1e, pp. 345-347)

1. Feedforward control (inputs)—monitor inputs.. control BEFORE service to PREVENT 2. Concurrent control (productive processes and activities)—monitor processes (Honda pulls cord as it goes down line and fix right then and there).. DURING 3. Feedback control (outputs)—monitor products.. AFTER to CORRECT

Morgenstern's time management tips (lecture only)

Time Management Tips Assign to-do list tasks to a "home" in your schedule Not enough time to do all the tasks? *Delete* *Delay* *Diminish* *Delegate*

Components of general environment (lecture & text)

1. *economy* - the current state of the economy affects virtually all organizations - growing economy = good - shrinking economy = bad - *influences basic business decisions* 2. *technology* - changes in technology can help company's provide *better* products or produce more efficiently - have to be able to *keep up* with the fast changes in the technological world 3. *socio-cultural* - demographic characteristics, general behavior, attitudes, and beliefs of people - *changes affect how managers make decisions* staff and the demand for certain products 4. *political/legal* legislation, regulations, and court decisions that *govern and regulate business* behavior

Transition to management (text, ex. 1.6, p.18)

1. *initial expectations*--boss, formal authority, manage tasks, not deal with people 2. *after 6 months as a manager*--*notice expectations were wrong*, fast pace, heavy workload, problem solver and troubleshooter 3. *after 1 year*--no longer a doer, communication and listening, positive reinforcement, people development

Types of deviance (text, ex 4.1, p. 70)

1. *production deviance* (organizational and minor) - *hurts the quality and quantity produced* - leaving early, taking excessive breaks, working slowly, wasting resources... 2. *property deviance* (organizational and serious) - aimed at the organization's property or products - sabotaging equipment, accepting kickbacks, *stealing* (employee shrinkage), sweet-hearting, dumpster diving... 3. *personal aggression* (*serious* and interpersonal) - hostile or aggressive behavior toward other - *sexual harassment*, verbal abuse, workplace violence... 4. *political deviance* (*minor* and interpersonal) - using one's *influence* to harm others in the organization - favoritism, gossiping, *blaming* coworkers...

Responsibility strategies (lecture & text; sec. 4.7, pp. 87- 89)

1. *reactive* - least reactive - *deny all CSR and fight against* - fight against the notion that companies should be responsible for charities... - does less than society expects 2. *defensive* - does the bare minimum to address CSR - does admit they have some CSR *admits but does bare minimum* - admits they have a problem, but does the least amount expected by society to fix it 3. *accommodative* - accept they have a CSR - does all that could be excepted of them - *admits and does a lot to fix* 4. *proactive* - most responsive - above and beyond - anticipate problems before they even occur - does more than could be expected - industry leaders *admits and does more than expected*

Two main roles team members play (lecture)

1. *task*: getting goals done, technical 2. *social*: cooperation, cohesion, setting the tone (leader should focus on social tasks)

Types of managers/models

1. *top* management - Chief... president... (CEO)... C-suite - Set *overall vision for company* - Developing/creating employee by-in - How to grow entire biz 2. *middle* management - director... manager... *regional/senior manager* - Taking *overall vision from top* and deciding how to do that - Strategy of how to achieve goals - *Coordinating work between other units* 3. *first-line* management - managers: *supervisor, assistant manager*... - Only ones to *not oversee other managers* - just other employees - Coaching, feedback, training... 4. *team leaders* *short term* monitoring/feedback for the team

Methods of control (Sec. 16-2, pp. 347-351)

1. Bureaucratic 2. Objective--behavior, output 3. Normative 4. Concertive 5. Self

Creating a sustainable competitive advantage (text & lecture)

1. Competitive advantage (only sustained if competitors have tried unsuccessfully to duplicate the advantage and have stopped trying to duplicate it for the moment) 2. Sustainable competitive advantage a. *Valued*--changes in demand, competitors' actions, and technology changes can make value decrease (can't sell at $10 if demand is $9) b. *Rare*--your product has to be better/different than others c. *Imperfectly imitated*--patent or it better be expensive or impossible for them to re-make d. *Non Substitutable*--can something else give you the same result?

Industry strategies (4 positioning strategies from lecture- Dessler & Phillips)

1. Cost leadership—lower cost for more things (Walmart) 2. Cost focus—sell things cheaply because other people offer it (Redbox) can only get one thing from Redbox, DVD or video game 3. Differentiation—people are willing to pay high prices for the product (apple) 4. Focused differentiation—focus a lot of energy on one product (Rolex—selling status)

How do I get help and "Life Lessons" (syllabus p. 3)

1. Do *homework* 2. Think about *who to ask* 3. *Prepare good question* 4. *Patient, kind, professional ask right person, right way, to get right answer*

Getting into business (lecture)

1. Family-owned 2. Starting new 3. Buy existing 4. Buy franchise: the most undervalued and under-appreciated way but the easiest ways to get into running a business

Top 3 (of 10) mistakes managers make (text, ex 1.5 p. 16)

Top 3 mistakes managers make 1) *insensitive* to others: abrasive, intimidating, bullying style 2) *cold, aloof, arrogant* 3) *betrays trust*

Preparing for an international assignment (text, sec. 8-6, pp. 176-179)

1. Foreign language 2. Foreign customs 3. Documentary training: focuses on identifying specific critical differences between cultures (eye contact, handshake) 4. Cultural simulations: practice adapting to cultural differences (real situations) 5. Field experiences (place in an ethnic neighborhood) Adaptability screening: used to assess how well managers and their families are likely to adjust to foreign cultures (open-minded, respectful of others' beliefs) **most important is how worker and spouse react to culture

Characteristics of an attractive foreign business climate (text, sec. 8-4 headings/key points, pp. 170-174)

1. Growing markets 2. Location 3. Minimizing Political Risk

Characteristics of good team meetings (lecture)

1. Have a Written *Agenda* 2. Start and End on *Time* 3. Begin with a *review* 4. Have clear ground *rules* for decision making 5. Include time for *questions* and debate 6. Encourage *equal participation* 7. End with *summary* of who is doing what/when

Hofstede's dimensions

1. Long-term vs. short-term orientation 2. Uncertainty avoidance 3. Masculinity vs. Femininity 4. Individualism vs. collectivism 5. Power distance

6 factors of ethical intensity (text sec. 4-3a p. 74-75)

1. Magnitude of consequences- *total harm or benefit* derived from an ethical decision 2. Social Consensus- *agreement* on whether behavior is bad or good 3. Probability of effect- *the chance* that something will happen that results in harm to others 4. Temporal immediacy- *the time* between an act and the consequences the act produces 5. Proximity of effect- the social, psychological, cultural, or physical *distance* between a decision maker and those affected by his or her decisions 6. Concentration of effect- the total harm or benefit that an act produces *on the average person*

Nominal group and Delphi techniques (text sec. 5-5c,d; pp. 109-110; was also covered some in "Team Tips" lecture)

1. Nominal group technique--quiet time for thinking, back to talk, back to quiet to decide, talk out decision 2. Delphi technique--experts respond to questionnaire and to each other until they reach an agreement on an issue

Planning/control tools, PERT & Gantt

1. PERT Networks --what *order* things should be *done* --What things can be *done simultaneously* --*How long* they should take 2. Gantt Charts (same info different way) --what order should be done (top to bottom) --what can be done simultaneously --How long they should take

Minimizing Political Risk

1. Policy uncertainty (most common)--changes in laws and government policies (Indian retail stores and Walmart coming in) 2. Political uncertainty--gvmt instability, war, revolution, conflict, inflation, poor economy

Types of ownership (and differences between them) (lecture)

1. Proprietorship (1 person)/Partnership (2 people or more) EVERYTHING IS ON YOU PERSONALLY 2. (C)-Corporation creates a business as a separate legal entity from the owners OWNERS ARE PROTECTED taxed higher** 3. Subchapter S-Corporation or Limited Liability Company (LLC) separate legal entities from the owners OWNERS ARE PROTECTED profits are not taxed as corporate profits--instead the profits are passed through to the shareholders and only taxed one time (pass-through corporations) 95% of businesses are this **Can't revise what kind of company you are for at least 5 years

Key ideas behind 'burn your business plan' (lecture)

1. Purpose statement--what and why? 2. Strategic objectives--goals and actions company wide 3. Tactical plans 4. Operational Plans: Day-to-day, single use plans, standing/continual plans, budgets (the most widely used)

Firm-level strategies (attack/response and blue ocean strategy) (lecture & text)

1. Strategic Moves in Direct Competition: Attacks & responses in red ocean--(stealing things back and forth) one upping each other 2. Entrepreneurship: Movement into deep blue waters--a shark goes out and finds a wide blue ocean with new customers (find and create new products with new customers)

Types of plans, procedures, and rules (text section 5- 3a,b,c, pp. 99-103)

1. Strategic--(top, 2 to 5 yrs) Purpose statement, strategic objectives/specific goals 2. Tactical--(middle, 6 mo. to 2 yrs) reaching the strategic objective 3. Operational--(lower mgmt, 30 days to 6 mo.) a. single use plans, b. standing/continual plans: policies, procedures (more specific than policies and have steps), rules and regulations (even more specific, what and how should be done), c. budgets

SWOT (situational) analysis (text & lecture)

1. Strengths: things your company has going for it inside of the company (patents, capabilities, talent and expertise, decision making skills) 2. Weaknesses: things you cannot do or capabilities that you don't have (basic products that people could get anywhere else), don't have a lot of capital/funds, don't have expertise 3. Opportunities: external (current needs in the marketplace), scanning business environment (wherever you see a problem in the world there is an opportunity) 4. Threats: outside of your company—competitors, who is out there trying to create a similar product or service?

Why do managers need to know about tariffs and trade? (text, 8-1d; pp. 163-164)

1. create new business opportunities 2. intensify competition (managers job to address competition) 3. easy for foreign countries to enter our economy 4. prices

6 steps in ethical decision making model (ex. 4.6, p. 81)

1. identify the problem 2. identify the constituents 3. diagnose the situation 4. analyze your options 5. make your choice 6. act

Location

1. qualitative a. workforce quality: pick people with the right/best skills for the jobs b. company strategy: low-cost strategy, need low expense and low-cost of labor locations 2. quantitative Kind of facility being built Tariff and nontariff barriers Exchange rates Transportation and labor costs

Correlation between missed classes and final points

20% or -.41

Team Productivity equation (lecture only)

Actual Productivity = Potential Productivity + Gains - Losses

Effective missions (lecture)

Briefly define organization's purpose for stakeholders in a way that is: Enduring - Should stand test of time Inspirational - Call to action Clear - Everyone can understand it Consistent w/ company values Concise - No more than 2 sentences Nutshell - explain what you do and how you do it

Centralization vs. decentralization (text, sec. 9.2d, p. 191)

C: the location of most *authority* at the *upper levels* of the organization D: the location of a significant amount of *authority* in the *lower levels* of the organization

Individualism vs. Collectivism

Collectivist: loyal to group (China, Indonesia, Africa) Individual: loyal to yourself (US)

Planning/control equation

Don't know how long things will take? Estimate To (oppotimistic) less days Tp (pessimistic) more days Tm (most likely how long) middle (To + 4Tm + Tp)/6

Ethics & ethical behavior definitions (lecture & text)

Ethics - a set of *principles that defines* what is right and wrong for a person or group. Ethical behavior - *behavior that conforms* to a society's accepted principles of right and wrong

Forces for internationalization (lecture only)

Forces Shrinking Globe 1. Modern communication technology (smartphone) 2. Air travel (planes) 3. Corporate globalism (a mass of people that do business in countries other than their own)

Corporate strategies BIG

GRAND: growth, stability, retrenchment BCG: stars, question marks, cash cows, dogs PORTFOLIO: compete in more markets (stool and legs)

Uncertainty avoidance

HIGH: What extent are the cultures okay with uncertainty, very uncomfortable with unstructured and secure situations and potential for failure LOW: who knows what will happen? Let's take risk

High/Low context cultures (lecture only)

High-Context Cultures: Relationship is more important than terms TRUST, TONE, CONTEXT (Asia, South America, Africa) Low-Context Cultures: The terms of the deal are more important than building a relationship LOGIC, FACTS, CONTRACTS, say what you mean (North America, Western Europe)

Logic of Contingency Design (lecture)

There is no single best design for all companies and situations** Burns & Stalker (1961) Must determine the degree of environmental uncertainty (*how unpredictable is your industry, is it fast paced?*) and adapt the organization and its subunits to that situation 1. *Mechanistic* (very predictive industry) 2. *Organic* (very unpredictive/fast paced and changing)

Power distance

LOW: don't like being told what to do HIGH: clear people that are in charge and others are fine with that (France)

Long-term vs. short-term orientation

LT: Delay gratification and sacrifice in the present for a *better future* ST: *Live in the now*, enjoy the present, I want it now

Types of cooperative contracts (lecture & text)

Licensing Agreement: a domestic company allows/license a foreign company to manufacture their designs and sell them abroad for a royalty fee (+Earn profits w/o spending more money +Avoid tariffs and barriers -Lose control over product quality) Franchising: (McDonald's) Collection of networked firms where manufacturer licenses entire business to another person/organization (+earn franchise fee/royalties -Lose control over product quality -Product may not jive with different cultures)

Line vs staff authority (text, sec. 9.2b, pp. 189-190)

Line: *the right to command* immediate subordinates in the chain of command Staff: *the right to advise, but not command*, others who are not subordinates in the chain of command

Masculinity vs. Femininity

M To what extent does a country identify with things that tend to identify with men, purpose F Building relationships, nurturing, quality of life

What is a mongrel? Why is it a good thing? (Zachary Article)

Mongrel: people who are comfortable and at ease in more than one culture For businesses to be successful in this competitive place they need innovation and creativity and the best example of this is the ability to mix ideas and product designs and perspectives from different cultures (mixed dog)

Global new ventures

New companies that are founded with an active global strategy and have sales, employees, and financing in different countries. Don't follow phase model.

Definition of non-tariff trade barriers

Non Tariff barriers: non tax methods of increasing the cost or reducing the volume of imported goods (5 types) 1. *Quotas* (only x movies a year) 2. *"Voluntary" export restraints* (threatened by other countries - place quota on exports to countries) 3. *Government import standards* (excessive checks/requirements under mask of "protecting safety/health of citizens) 4. *Subsidies* (long-term low interest loans, cash grants, tax deferments. Protect companies in special industries) 5. *Customs Classification* (Imports classified by customs agents, determines tariff size/subjectivity to quotas)

Value curves (lecture)

Plot on the chart how your competitors invest in each of those strategies Look for the empty space and that's where you invest in your strategy

Process gains/losses (lecture)

Process Gains: Information Exchange Load Balancing Social Facilitation (making things easier) Process Losses: Group Maintenance (unavoidable) Social Loafing Production Blocking (forgetting what you were going to say cuz someone was talking)

Internationalization process - 5 big options (4 stages vs global new ventures) (lecture & text)

Stage 1: Exporting Stage 2: Cooperative contracts (licensing/franchising) Stage 3: Strategic alliances Stage 4: Wholly owned affiliates 5. global new ventures!

Key characteristics of "stars" (Webber article), -4 elements of initiative -3 rules of initiative -How they network (economics of networking)

THEY BUILD A BARTERING NETWORK Elements 1. doing something *above/beyond job description* 2. *helping others* 3. some element of *risk taking* 4. seeing an activity through to *completion* Rules 1. work that gets done only when people step forward to *tackle it* 2. make sure you're doing your *assigned job well before* taking anything else on 3. *social initiatives don't count for much*

Definition of tariff trade barriers

Tariff: a direct tax on imported goods (increase cost of imported vs. cost of domestic) Also put tariffs on exported goods to discourage manufacturers from exporting goods overseas/out of the country

What is the marshmallow principle

Teams that prototype (make rough drafts and build upon them each time) throughout the process do better than the teams that just plan, plan, and plan until a final result *trial and error* -- kindergarteners vs. adults

Components of Economic Value Added (EVA; Sec. 16-3b, pp. 352-355; Ex. 16.3)

The amount by which profits exceed the cost of capital in a given year 1. *net income* calculate net operating profit after taxes (NOPAT) 2. *money spent* Identify how much capital the company has invested 3. *percent, cost of capital* Determine the cost paid for capital (usually between 5 & 8%) 4. *#2 times #3* Multiply capital used by cost of capital 5. *NI-money spent* Subtract the total dollar cost of capital from net profit after taxes

Span of control (lecture)

The number of people who report to a manager 1. *Narrow* spans of control create *"tall"* organizations (less autonomy/freedom for employees, salary costs are higher, lower workload for managers, more control) 2. *Wider* spans of control create *"flat"* organizations (a lot more autonomy/freedom for employees, salary costs are lower, higher workload for managers, less control)

Errors managers make (what NOT to do when leading change) (text, sec 7-4b, pp. 151-153)

UNF: 1. not establishing a great enough *sense of urgency* 2. not creating a powerful *enough coalition* CHG: 1. lacking a vision 2. *under communicating* the vision by a factor of ten 3. not removing *obstacles* to the vision 4. not systematically *planning* for and creating *short-term wins* FRZ: 1. declaring *victory* too soon 2. not *anchoring* changes in the corporation's culture

Wholly owned affiliates

When a company in one country simply buys the entirety of a company in another country, they own all the rights and everything (+parent company receives all profits and control over facilities -Expense of building new/buying existing business -High risk/high reward)

Strategic alliances

When companies in two countries decide to combine assets and share the risks equally, split profits and split the costs--joint ventures (+Avoid tariffs/barriers +Bear only part of costs/risks)

Portfolio strategy

a corporate-level strategy that minimizes the risk by diversifying investment among various business or product lines 1. *acquisitions* 2. *unrelated diversification* (acquiring companies completely different from each other) 3. *BCG* 4. *Related diversification* (working as teams)

Motivation to manage (text, end of sec 1.5, p. 15)

assessment of how motivated employees are to... - interact with superiors - participate in competitive situations - behave assertively toward others - tell others what to do - reward good behavior - perform actions that are highly visible to others - handle and organize administrative tasks

Delegation, how to do well (three transfers) (text, sec. 9.2c, pp. 190-191)

assignment of direct authority to a subordinate that a manager normally does 1. responsibility: full *responsibility for the assignment*, this is difficult for employers 2. authority: *authority over* the budget, resources, and personnel needed to do the job 3. accountability: *subordinate* has the authority and responsibility to do the job and in return *is accountable for getting the job done*. managers delegate their managerial authority and responsibility to subordinates in exchange for results

Emotional control activities (blessings, autobiographical reflection) (lecture only)

count your blessings, three things a day

Technology cycles (text, sec 7-1a, pp. 137-138)

cycle that begins with the birth of a new technology and ends when that technology reaches its limits and is replaced by a newer, substantially better technology

Exporting

make products in your home country and ship and sell abroad +Less dependent on home market +Greater control over research, design, product decisions -Tariffs, Non-tariff barriers, transport costs

Groupthink and minority domination (text, p. 205)

minority domination *one or two people dominate* team discussions -- restricting consideration of different problem definitions and alternative solutions groupthink members that are highly cohesive feel *intense pressure not to disagree* with each other so that the group can approve a *solution* -- restricts discussion and leads to fewer proposed solution

Functional + —

positive: *know everything* about the function negative: you *need to talk to other groups* at some point (accounting to finance), takes a *long time to make a change*, *coordination* between functions is *hard*

Geographic + —

positive: *locate* them *closer* to the market their serving so that they *understand the customers' needs* negative: replicating company in every country you're at, takes lots of *money*, *no standardization*

Customer + —

positive: customer needs differ, *more responsive to customer needs*, assess business units independently negative: same *expensive cost* and not a lot of *communication*, *can't standardize*

Product + —

positive: three *miniature companies* within my company, financial ratios for each product line negative: *need more people* to make each group complete, *costs go up* because of so many employees, *lose efficiency* because independent groups create their own stuff and *can't standardize* it, *less coordination* between business units

Growing markets

purchasing power (as income increases so does PP) and foreign competitors (high coffee need--make coffee shop)

Environmental scanning (lecture & text)

searching the environment for important events or issues that might affect an organization

Shareholder vs. Stakeholder view (lecture & text; sec. 4.5, pp. 83-85)

shareholder view/model (friedman) - purpose of a business is to *maximize profits* - irresponsible to focus on anything else - earn as much $ as possible for shareholders and let them decide how to use the money (charities, fundraising...) stakeholder view/model (mollner) - purpose of a business is create *value for society* - create value by *satisfying all stakeholders* - 6 stakeholders: 1. government 2. communities 3. customers 4. employees 5. suppliers 6. stockholders (managers focus on employees, stockholders, customers)

Basic departmentalization structures (text, all of sec. 9.1a-e, pp. -182-188 & lecture)

the grouping of related activities or processes into major units Main options: 1. *Functional* (organize by functions, accountants with accountants, finance with finance) 2. *Product* (organize by products/companies within a company) 3. *Customer* (separate by the customers that we *sell to*—government, business, personal—different needs of markets) 4. *Geographic* (markets in NA, EU, AS) 5. *Matrix* (2 of the above)

Each stage of self-management process, including tips & mistakes

tips *ask questions* - who am I now and who do I want to be? - what are my strengths and what do I want them to be? - what am I doing now and what do I want to be doing? - where am I now and where do I want to go? mistakes - not having standards - ignoring important parts of our identities - not imaginative enough - never taking the time to plan - never doing the self assessment - never thinking about the future

Chain of command (text, sec. 9.2a, p. 189)

vertical line of authority that clarifies *who reports to whom* throughout the organization