Johnson Midterm 1
How did developments during the Italian Renaissance contribute the evolution of business enterprise?
-Accounting, corporations, multinational corporations -Corporations develop to carry out advancements (farming, art, ect) -The Italian Renaissance was a major leap of knowledge and learning that had economic and business implications.
According to Mintzberg and Kotter, how do managers "actually" spend their time? What does this suggest about the nature of managerial work?
-Constant interruptions / action / adaptiveness -Spend time listening and conversations with others (subordinates, bosses, external people, etc.) -Spend time in unplanned activities / disjointed conversations -Planning, organizing, directing, and controlling Interactive nature of management = conversational
Who was Max Weber? Why is he important in the academic study of management?
A German sociologist made complementary contributions to Taylor's management system / early 1890s and post 1904 Created principles of modern/ideal bureaucracy Did research of types of leadership (charismatic domination, traditional domination, and legal domination) Stressed that social scientists could understand collectives by understanding individuals His ideas are used in human resource management so that managers can make decisions based on policy.
It is sometimes said that managers require three different types of skills: conceptual, technical, and human. How does a manager's reliance on these skills vary as they advance from a "frontline" to a "general" management position?
Conceptual Skills pertaining to the ability to identify and resolve problems for the benefit of the organization and its members See organization as a whole and understand how various parts are integrated together. Technical The ability to use the tools, procedures, and techniques for a specialized task involving a particular method or process. Human Interpersonal and communication skills - People skills; the ability to lead, motivate, and communicate efficiently with others Move more into recruiting (human resource) Ability to work with people and understand employee motivation and group processes. Frontline = technical General = human
What factors have led firms to increasingly view human resource management as being as important as other major functions, such as marketing, finance, or operations?
Basis of competitive advantage relates to skills had Increasing firms competitive advantage is due to skills and capability therefore human capital important
Discuss the relationship between a firm's training and development strategy and the sustainability of the firm's competitive advantage?
Competitive adv lasts long time hard for competitors to imitate Same thing as above (walmart vs southwest)
What does it mean for a firm to have a "human resource strategy?"
Recruiting people Developing people over time (think southwest) Recruit -> train -> development -> departure Different strategy in each stage Think walmart (need narrow job descriptions to advance fast. Minimum cost on recruiting. Observe ppl closely first years then choose who to retain and poor resources. Opposite of southwest)
What are the key phases in the HRM lifecycle?
Recruiting, Selecting, Training, Developing, Advancing, and Separating
Discuss the Human Relations movement in relation to the Scientific Management school of thought
Scientific management: logical and used formal authority to motivate the workplace. Human Relations School of Management: enhanced scientific management because it acknowledged that people's attitudes, perceptions and desires play a role in their workplace performance. Acknowledging the human aspect and incorporating it into management style produces more efficiency. JOB ENRICHMENT Assumptions: people want to feel useful and important People desire to belong and be recognized as individuals Policies: Manager's task is to make workers feel useful and important Keep workers informed and listen to their objections to manager's plans Allow workers to exercise some self-directions and control in routine matters Key people: Elton Mayo (1880-1949) researched, theorized, and developed human relations theory based on an experiment at the Hawthorne plant on how to manage workers and to improve production. Mary Parker Follett (1868-1933) found a way to utilize the tenets of the human relations movement to solve some of the issues with scientific management.
Discuss the differences in organizational and strategic issues that arise when a firm's diversification strategy is one based on complements versus substitutes.
Sharing core technologies - Economies of scale Relatedness between technology, complements, and substitutes. These influence the kinds of managerial problems Compliments vs substitutes (general motors : substitutes which increase competition and HQ has more duty. Vs microsoft (Xbox, computer, ect which are more organic compliments)
What are some of the major "dimensions" on which firms will choose between entry-level candidates? How do firms manage the trade-offs between selecting individuals across these different dimensions?
Skills and capabilities intelligence Personality Breadth
Discuss how differences in a firm's recruiting strategy can affect other aspects of its HRM strategy, i.e., job design, training & development, etc..
Southwest vs walmart (see above) If a firm uses narrow job classification at lower levels then less strict recruiting. Delay investment in new employees. Then broad expertise (walmart)
What do we mean when we say a firm's strategy displays "strategic coherence?"
Strategic coherence refers to the extent to which the various functional strategies a firm employs complement and reinforce one another. It helps develop a combination of factors and strategies to achieve superior returns on investments. single elements of the strategy makes the other elements work better Think southwest air Firms functional strategy compliment each other, they display strategic coherence So benefit is greater than sum of its parts
Please discuss why it might be a good idea to have the strategic planning and capital budgeting processes intertwined with each other.
Strategic planning sets the object, capital budgeting is where that objective is organized Capital budgeting where firms make investment Strategic plannings means nothing until $$$$$. Sets tone but... Capital budgeting where objective meets real life
What is the BCG Matrix? (boston consulting group)
The BCG matrix has each business in a corporation plotted on the basis of the growth rate of its market and the relative strength of its competitive position in the market. The industry life-cycle is the transition from the introduction stage, to the growth stage, to maturity stage, and then to the stage of declination of an industry. BCG matrix is used to determine if a product is still going to be produced and sold by a company. If it doesn't perform like they thought it would then they will decide to continue investing in it or not. Firms can use the BCG matrix to develop their company over its life-cycle and guide decisions Growth, and market share Low growth, low market share: dog H G, L Ms: question L G, H MS: cash cow H B, L MS: star
Discuss how the following laws have affected the human resources practices of organizations: The Civil Rights Act of 1964 The Age Discrimination Act of 1967 The Americans with Disabilities Act of 1990
The Civil Rights Act - prohibits workplace discrimination The Age Discrimination Act - protects individuals 40 years or older The Americans with Disabilities Act - qualified individuals with disabilities
Discuss the firm's objective in initial screening interviews.
The firm's objective is to gather the right information needed to decide whether or not you want to bring in a candidate. Selection process is based on who you can eliminate and who you do not want to hire.
Define the term, "Value Chain."
The sequence of activities that flow from raw materials to the delivery of a good or service, with additional value created at each step. The progression of activities it undertakes to create a product or service that consumers will pay for
What does it mean for a firm to have a "vision" or "mission statement?'
The vision statement is an expression of what a business's founders want that business to accomplish. Very broad. States why the business exists A mission statement is more specific. It takes the why of the vision statement and gives a broad description of how the firm will try to make its vision of reality. Focuses on describing products and the target markets it plans to serve. achieved through structural mechanisms that enhance collaboration and coordination.
What is the "five forces" model and how can we use it to analyze the industry environment?
Threat of Potential Entrants Customer Power and Preferences Bargaining Power of Suppliers Threats of Substitutes Rivalry Between Competitors This model helps us understand how the first four directly impact a firm's rivalry and competitive advantage.
What is the distinction between "training" versus "development?"
Training: is sending ppl off sight to learn outside job Development: learning that takes place in context of a job
Discuss the role of consumer tastes and channel bargaining power in determining industry rivalry and firm profitability.
consumers have a lot of bargaining power when: only a few consumers buy a lot of the product, switching costs are high, and they have other product options to switch to. Brand loyalty matters. Chanel bargaining power: power of distributors and retailers
According to the textbook, what factors underlie the "War for Talent?"
increase human resources as competitive advantage Why firms train employees in specific skills Firms compete for each others' talent
What does it mean for a firm to have a sustainable competitive advantage?
oes it mean for a firm to have a sustainable competitive advantage? When a firm successfully attracts more customers, earns more profit, or returns more value to its shareholders than rival firms do. One that lasts for a long time
Discuss three factors that can result in an increase in the height of entry barriers?
s three factors that can result in an increase in the height of entry barriers? Increased cost of entry and limited availability of market share Having large scale facilities Increased R&D (research and development) and advertising Cost- industries that have a high cost of entering (airline industry) have a lower threat of new entrants Brand loyalty- Industries with strong brand names will have lower threat of new entrants. Customers who are familiar with a strong brand name may be unwilling to try a new, unknown brand Industry growth- Low growth industries have a lower threat of new entrants because new customers are scarce and a firm can only gain market share by attracting customers from other firms. High growth industries have an increasing number of customers and new firms can successfully appeal to new customers by offering them something existing firms do not offer
What is the distinction between "surface-level" versus "deep-level" diversity? (think Deloitte)
surface-level: visible (age, body size, race, sex) deep-level: non-visible (attitudes, beliefs, values)
What is "groupthink?"
the practice of thinking or making decisions as a group in a way that discourages creativity or individual responsibility. Tendency to want to mold to group norms. Reach consensus to early because social pressure Increased with homogeneity
Please discuss the advantages and disadvantages of having "line" or "functional" managers involved in the strategic planning process.
-Functional managers are only responsible for a particular program. It would be advantageous to have them involved in the strategic planning process because they could set goals and strategies for their particular division or program. -Disadvantages would be that since they are only focused on their program so their goals might interfere with or not align with those of the whole company. -Line managers oversee employees and operations but report to a higher ranking manager. They would be valuable in operational planning and coming up with goals for the front line employees and relating those strategies with those of the company.
According to Henry Mintzberg, what are three roles of managers?
-Interpersonal Relationship managers have with others. Figurehead. Leader liaison -Informational Managers gather, collate, analyze, store, and disseminate many types of information. Monitor and spokesperson -Decisional Make decisions on behalf of the organization and stakeholder. Entrepreneur, problem solver, resource allocator, negotiator, crisis handler.
Who is Frederick Taylor and what is his importance to the field of management?
-introduced a second approach to management, known as scientific management, -A classical management approach that applied scientific methods to analyze and determine the "one best way" to complete production tasks -Dealt with social upheaval that followed from Industrial rev. -Breaks up a supervisor's work in order that he could function within a discrete area of activities / developed a cost-accounting method -Also developed the four principles of management 1.Develop a science for each element of man's work 2.Scientifically select and train workman 3.Cooperate with men so as to ensure it is being done 4.Equal division of work and responsibility between management and workmen
What is SWOT analysis?
A comparison of strengths, weaknesses, opportunities, and threats that helps executives formulate strategy.
Please give an example of "substitution" and discuss how it affects the focal firm's profitability.
A substitution is any other product or service that can satisfy the same need for a customer as an industry's offerings. Not rivals, completely different products customers would be willing to use instead of product they currently use (ex. Mcdonalds and Kroger) McD's rivals are Burger King, Taco Bell etc. McD's customers are hungry people, hungry people could also go to the grocery store to buy food and prepare it. They are in different industries so they aren't rivals but McD's faces a threat in Kroger because they both sell food. To defend itself from Kroger, McD's can make sure their food is already prepared and more convenient for the customer GM Industry analysis Wine and beer
What are the key pros and cons of a Matrix organization?
Advantages: Fluid and flexible design that can respond to environmental changes. Faster decision making. Allows you to be competitive on multiple dimensions Ideally low cost high differentiation Disadvantages: Complexity of assigning people to projects. Task and personality conflicts. Leads to dysfunctional behavior. Everyone has two bosses. Loss of direction
What are the advantages and disadvantages of a diverse workforce?
Advantages: diversity of thought, representation of differing lifestyles causes groups to be more aware of the world, thus being able to target new areas of the market that were previously misunderstood or unavailable to the firm. Additionally, it is important to bring in talent that would be previously thought to be outside of the norm to cause a conflict of thought--out of this conflict is crystalization of ideas and further understanding of WHY groups believe something. Diverse groups = diverse decisions. Better decision making Disadvantages: need to find something to bring unity to the group otherwise different diverse groups will tear a firm apart (a house divided, Austria pre WWI) Additionally, when people are on different "wavelengths" or have different backgrounds, it can also be challenging to get everyone to understand why the actions and values of a firm are important--group buy in!
Business people will often distinguish between "corporate," "business," and "operational" or "functional" strategies. Please explain the differences between these three levels of strategy.
Corporate - determining the portfolio businesses. Very broad strategy. Growing, maintaining, shrinking large companies. (Advertising campaign) Portfolio of business and logic of it Business - positioning within the industry, framework to organize activities (cost leadership/differentiation) Position self in markets relative to competition Operational/Functional - operational and marketing strategies, etc ex) human resource staregy
Discuss the distinction between the Harvard/"Structuralist"/Five Forces understanding of competitive advantage versus the Core Competence/Resources and Capabilities perspective on competitive advantage.
Five Force Analysis a framework for industry analysis and business strategy development that draw upon the five forces that influence a businesses economic environment: Rivalry, Entry Barriers, Supplier Power, Substitutes, Customer Power + Preferences Resource Inputs to a system that can enhance performance. Core competency A unique skill and/or knowledge an organization possesses that gives it an edge over competitors.
How do the roles of general and functional managers differ from each other?
General responsible for the overall performance of an organization or one of its major self-contained subunits or divisions. Functional responsible for leading a particular function or a subunit within a function.
What is the difference between horizontal versus vertical differentiation?
Horizontal differentiation- goods are different but not in price or quality at the same price, consumers choose based on personal preference (like coke or pepsi) Vertical differentiation- goods have different qualities and it is obvious which is best. All consumers would prefer one over the other if they were the same price. (like brand name vs generic or lulu vs walmart brand)
It is sometimes said that "the number one job of any manager is to get his or her subordinates promoted." What do we mean by this?
If a manager focuses on this, or the "hit by a bus" idea, then he will be doing his job well. A great manager builds infrastructure that lasts and allows the firm to be more efficient Etc.
How does industry concentration or consolidation affect rivalry and profitability?
It will decrease competition among firms and create higher barriers to entry. This may guarantee long term profits because firms will be able to charge a higher price. A large concentration may result in somewhat of a monopoly. Concentration: relate to the number of people. Highly concentrated = more towards monopoly, rivalry decrease, profit increase
What is meant by the term, "integrating mechanisms?"
Mechanisms for coordinating subunits help increase communication and coordination so different divisions can work together to solve problems. Liaison roles are held by managers who help communicate information from one segment of a business to another.
How do differences in customer tastes, production economics, and transport costs affect the choice between a "multidomestic" versus a "global" organization structure?
Multi domestic: Proctor gamble Homogeneous customer Transport to production cost ratio is high Build small scale plants close to rejon where will be consumed Global: Nike Geographically centralized production to get big economies of scale Transport to production cost ratio low
Discuss the difference between a "multidomestic" versus "global" business strategy and organization
Multidomestic firms are high on taste differentiation Multidomestic M-forms are broken up into regional categories Global firms are high on economies of scale and less taste differentiation Global M-Forms are broken up into product categories.
What are the five functions of management, and how would you distinguish between them?
Planning- management function of systematically making decisions about goals and activities that an individual, group, a work unit, or the overall organization will pursue. Creates a competitive advantage for the firm Involves analysis, formulation, and implementation Organizing - The management function of assembling and coordinating human, financial, physical, informational, and other resources needed to achieve goals. Involves division of labor and coordinating mechanisms. Leading - The management function that involves the managers efforts to stimulate high performance by employees Controlling - The management function of monitoring performance and making needed changes Staffing - The process of acquiring, deploying, and retain inning a workforce of sufficient quantity and quality to create positive impacts on the organizations effectiveness
What are "generic" strategies?
Porter defines 3 generic strategies: cost leadership, differentiation and focus. They are called generic because they can be applied to any business or industry. Cost leadership- try to make your product low cost compared to others Differentiation - develop a unique product. Compete in multiple segments. Premium price and product characteristics Focus strategy- focus on a narrow market and be the best in it
Please discuss the difference between a "U-form" or functional, "M-form" or multidivisional, and "Matrix" organization.
U form: Form broken up by business function keeps HQ in the loop on regular basis; highly centralized; HQ provides permission in-depth specialization efficient through putting similar specialties and people with common skills/knowledge / Coordination within area Drives efficiency and low cost Process: product flows from one end to another (Starbucks) (poor communication) (limited view of organizational goals) M-form Multi-product or multidivisional HQ -> R&D/corp.fin -> branches headed by VPs (smaller U-Forms) Each department is very independent of the other HQ = long-run/strategy focused, handles big decisions Under HQ = operational focus Joint profitability requires no overlap between divisions (Ford) Horizontal = Products tend to be complementary to each other (demand increases for one, demand increases for the other: Apple, Microsoft, Sony) Vertical = Products serve as substitutes with different quality (GM) ex) P&G = multidomestic, geo -> product, low transportation costs, homogenous and higher ratio of transportation cost to production cost ex) Nike = global, heterogenous, product -> geo, geographically centralized production with low labor costs to then transport, lower ratio of transportation cost to production cost Matrix Transnational = a form of matrix org. An organizational structure that groups people by function and by-product team simultaneously (Ford = y axis is types of car bodies, x axis is brands/geographic locations) Specialists from different functional areas assigned to work on projects, but return to original functional area when completed; continuously moving from project to project
What do we mean by "vertical integration" versus "horizontal" or "related" diversification?
Vertical diversification: Location of decision-making responsibilities within a structure / pyramid structure Seen in Disney/entertainment Horizontal/related diversification Formal division of the organization into subunits A "flatter" organizational structure often found in matrix organizations where individuals relish the breath and development that their team offers.
How can first-mover advantages combined with investment in scale economies result in a sustainable competitive advantage?
When economies of scale are large, first-mover advantages are typically enhanced. The enlarged capacity of the incumbent serves as a commitment to maintain greater output following entry, with the threat of price cuts against late entrants. If a company is the first in a field and can dominate the field quickly by economies of scale, it will be harder for second movers to steal market share.
Define PESTEL? What does this acronym stand for?
used to identify and analyze the key drivers of change in the external business environment / helps when planning to launch a new product, project or service because of market consideration Reminds managers to look at several distinct categories in the macro environment Political: tax rates, tariffs, labor regulations Economic: employment levels, interest rates Sociocultural: demographic trends, consumer preferences Technological: internet, smartphones Environmental: resource scarcity, recycling Legal: contracts, laws, intellectual property rights
What is "Succession Planning?"
what bench strength looks like and is the firm developing people to move into different organizations. huge issue for managers. Deciding who is gonna advance to higher level positions
