MAN EXAM #2

Importance if strategy and strategic management

- By concentrating on innovation, strategy provides a basic blueprint for growth, reinvention, and renewal - strategic management impacts the market as well as competitors' strategies

Forces of Change: OUTSIDE

- Demographic Changes: age, skill level, immigration, education, and gender - Technological Advancements: manufacturing automation, office automation, information technology - Shareholder and Customer Demands: benefit corporation (a legal entity that is required to adhere to socially beneficial practices) - Market Changes: as the economy becomes more global, companies must establish close relationships with employees, suppliers, and competitors (British exit from EU and China) - Social and Political Pressures: change in leadership or values, war

Orientation: Information a new employee needs to be successful

- Job Routine: needs to know what to do, how they are being evaluated, and who the co-workers/managers are - Mission and Operations: know what the company is about and why what they do is important -Work Rules and Employee Benefits: provided with a list of formal rules in a handbook and know how they will be compensated -Legal Environment: informed about important legal considerations to protect the company

Cultural Change

- Maintain: if it is appropriate for the current environment - Alter: modifications to a new set of values, basic assumptions, and ideologies -Completely New: typically in a separate work unit or new organization; a company should change its formal statements, slogans, saying and stories

Strengthening Cultures

- Organizational culture is based on the philosophy of the organization's founders, managers, and other figureheads - Rewards that reinforce culture -Maintain a stable workforce so that it does not have to continuously socialize new workers -Managers should be in touch with the organization';s cultural network, recognizing which individuals are highly influential and that others in the organization look up to and respect - Proper selection techniques to hire people whose values are consistent with the organization's culture -Use socialization to familiarize new hires with the values and behaviors needed to succeed

Employment Tests: Legal Considerations

- Reliability: the degree to which a test measures the same thing consistently -Validity: the degree to which the test measures what it purports to measure and free of bias

Supertrends

- Segmentation and niche products: catering to a narrow segments of customers - Targeted products with shorter time to market: firms must develop new products and services, as well as ways to market them and bring them to market quickly - Radical innovation is hurting traditional companies: traditional organizations can't take full advantage of disruptive technologies/innovation (when a product/ service begins at the bottom of the market but rapidly escalates up in the market - The effect of China and India: have a glut of labor and will work for lower wages than U.S. (offshoring) - Knowledge as Competitive Advantage: knowledge workers are becoming more important (data workers)

Cisco Example: 2010 Reconstructing

- Strategic vision: helping customer's capitalize on the business impact of key technology market transitions - Environmental Uncertainty - Objectives: tighter alignment and accountability, improve planning process - Streamlined Operating Model

Disadvantages of Planning

- Time consuming: takes time and resources to gather information, forecast, and budget - Plans go obsolete quickly: in a fast-paced environment, plans can become outdated, so they must be constantly evolving to reflect the changing nature of the market

Roles of Managers to keep Strategic Plans on track:

- engage employees in achieving the plan - keep planning simple -stay focused on what's important - keep progressing toward your vision, adjusting plans when needed

Benefits of Planning

- guides resource allocation and action - sets a standard of performance expected of employees

Firms diversify when:

- has been successful and has enough capital to invest into growing itself - if their current market is in decline/ they are not competitive in it so they are forced to move to new areas that offer more potential for outperforming others

Reasons for Planning

- helps you check your progress, coordinate activities, be forward-thinking, deal with uncertainty - will determine whether you can achieve what you want and the time frame needed to be successful - important during transitions/ big changes

Adapting to corporate culture

- one first impression - come in early and stay late: allows for observations - get to know your coworkers: helps you learn about organizational culture and norms -be open to feedback: shows dedication -over deliver

Learning Culture: Heroes, Stories, Rituals, Material Symbols

-Heroes: companies are deeply tied to their founders' beliefs; founders as role models to ideal employees -Stories: story is a narrative based on true events, which is repeated to emphasize a view (Arm-wrestle video shown to set a light atmosphere in Southwest Airlines organization) -Rituals: activities and ceremonies that celebrate important occasions and accomplishments of the organization or employees -Material Symbols: a symbol is an object, act, quality, or event that conveys meaning to others

Forces of Change: INSIDE

-Human Resource Concerns (problems with employing): unmet employee needs, absenteeism and turnover, reduced productivity, participation/suggestions and job dissatisfaction - Behavior of Managers: conflict between managers and employees, lack of leadership, ineffective reward systems, structural reorganization

Limitations of Planning

-can create a false sense of security -may cause rigidity in a turbulent environment -can hinder intuition and creativity

Elements of Organizations

1) Common Purpose- unifies employees 2) Coordinated Effort- individual efforts into a group- wide effort 3) Division of Labor- discrete parts of a task done by different people 4)Hierarchy of Authority- control mechanism giving formal power to the right people 5) Span of Control- number of people reporting to a single manager 6) Authority- rights inherent in a managerial position to make decisions, give orders, and utilize resources 7) Centralization of Authority- refers to who makes important decisions

4 building blocks of competitive advantage

1) Customer Responsiveness: responsive to customer needs and wants 2) Innovation: finding ways to deliver new and better goods/services; without this an organization will die 3) Quality: satisfy customer needs 4) Efficiency: produce as much as possible, using as few resources as possible

Steps of Strategic Management

1) Determine the mission, vision, and value statements 2) Examine the current reality by assessing the environment 3) Devise the grand strategy, as well as the strategic, tactical, and operational plans 4) Execute the strategy by following the strategic plans 5) Evaluate strategic plans and alter them if necessary to maintain strategic control

Socialization

1) Learning process: new employees try to establish an understanding of the workplace's physical, social, strategic, and cultural dynamics 2) Adjustment Process: new employees adjust themselves to fit the organization's work environment, including work roles, team norms, and corporate cultural values

Areas in which Change is needed:

1) People: perceptions, attitudes, performance, skills 2) Technology: any machine or process that enables an organization to gain competitive advantage 3) Structure 4) Strategy

Lewin's change Model

1) Unfreezing: managers stir up a motivation to change by encouraging workers to give up the old ways of doing things 2) Changing: managers give employees the tools they need to change, including benchmarking, mentors, experts, and training (learning new ways of doing things) 3) Refreezing: the changed attitudes and behavior are integrated into employees' normal ways of doing things

Planning process

1) develop a vision, mission, and goals 2) determine opportunities and threats 3) determine strengths and weaknesses 4) develop strategies 5) develop a strategic plan 6) develop tactical plans 7) analyze and control results 8) continue planning (repeat this process)

Strategic Human Resource Management (SHRM) Process

1. Determine the mission and strategy 2. Determine the grand strategy 3. Develop strategic plans 4. Determine what human resources are needed 5. Recruit and select individuals 6. Engage in orientation, training, and development 7. Appraise employee performance

Kotter's Model: steps to leading organizational change

1. Establish a sense of urgency: unfreeze the organization 2. Create the guiding coalition: create a cross-functional, cross-level group of people with enough power to lead change 3. Develop a vision and strategy: guiding the change process 4. Communicate the change vision: strategy that communicates the new vision/strategic plan 5. Empower broad-based action: eliminate barriers to change, encourage risk taking 6. Generate short-term wins: reward people who contribute to wins 7. Consolidate gains and produce more change: the guiding coalition uses credibility from short term wins to create more change 8. Anchor new approaches in the culture: reinforces changes by highlighting the connections between new behaviors and process and organizational success

10 reasons employees resist change

1. Individual's Predisposition Toward Change- past experiences (associating change with demands for compliance) 2 Fear of the Unknown- fearing the consequences of abrupt change 3. Climate of Mistrust- a sense of secrecy will make the change even more uncertain 4. Fear of Failure- new job responsibilities can intimidating. Cause doubt of one's own capabilities 5. Loss of Status or Job Security- fear that technology will eliminate someone's job or power will be altered 6. Peer Pressure- resists to protect friend 7. Disruption of Cultural Traditions or Group Relationships- transfer, resign, promoted 8. Personality Conflicts- differences between employees and change agents 9. Lack of Tact or Poor Timing- introducing change at a bad time or very suddenly 10. Non-reinforcing Reward System- resist if they do not perceive positive rewards

Fundamentals of Planning

1. Mission Statement 2. Vision Statement 3. Values Statement 4. Strategic Planning 5. Tactical Planning 6.. Operational Planning

Porter's principles of strategic planning/effective strategy

1. Strategy involves creating a unique and valuable position - strategic positioning attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company

The Planning/ Control Cycle: Planning Steps

1. make the plan 2. carry it out

Porter's principles of strategic planning/effective strategy

2. Strategy involves competitive trade-offs - choosing to pursue some strategies and implicitly ignoring other strategies that are incompatible - enhances competitive identity

Porter's principles of strategic planning/effective strategy

3. Strategy requires the creation of a "fit" among activities - a strategy should align an organization's activities - company acquires a competitive advantage if it can achieve a fit among its core activities - developing a complex, integrated activity system will create barriers to entry that result in long-lasting sustainability of the competitive advantage

Organizational Designs: Designs that Open Boundaries

A boundary-less organization is a fluid, highly adaptive organization whose members, linked by information technology, come together to collaborate on common tasks - collaborators: competitors, suppliers, customers

Designs that Open Boundaries: Hollow (Network) Structure

A central core of the organization is complemented by outside, independent firms that provide outsourced goods and services - firms linked to the central core via computers; extensive use of information technology -ex. Nike designs and markets and outsources other aspects, such as production, so it can focus on improving what it does best

Corporate-Level Strategy: single-product strategy

A company makes and sells only one product within its market - allows the organization to focus its efforts on one product - risk: any problem could put the entire business in jeopardy

Corporate-Level Strategy: diversification strategy

A company operates several businesses to spread out the risk among multiple markets or market segments

Designs that Open Boundaries: Modular Structure

A firm assembles product chunks, or modules, provided by outside contractors ; everything is outsourced - ex. Medical field, MySQL coordinates workers who work from home (minimizes face-to-face contact; employees measured by their skill and productivity) , Dreamliner failed because the different companies' pieces didn't fit together

Types of Organizational Control: Impacts

A firm's choice of organizational culture has an impact on its economic performance and on worker's perceptions of their job - stability/ control: monetary success (finances) - Operational efficiency has a moderate association to clan, adhocracy, and market cultures but a weak association to hierarchy cultures -Customer satisfaction: weak relationship to adhocracy and hierarchy cultures -Market share: weakly associated to adhocracy culture -Quality: not influenced by culture

Competing Values Framework

A framework for categorizing the effectiveness along two dimensions - Horizontal Dimension: internal focus that promotes integration or external focus that promotes differentiation - Vertical Dimension: encourages flexibility and discretion or stability and control

Strategic Management Step 3: Devise the strategy

A grand strategy explains how the organization will accomplish its mission (and vision) - managers can devise the grand strategy using tools for formulating corporate and business level strategies

Corporate- Level Strategy : The BCG (Boston Consulting Group) Matrix

A means for evaluating business units based on growth rate and market share - market growth rate: how fast an industry is growing - market share: a unit's share of the market related to competitor's shares

Tools for assessing the current reality (step 2): VRIO Analysis

A method for analyzing the competitive potential of a resource or capability - considers value, rarity, imitability, and organization

VRIO: Value- Is the resource or capability valuable?

A resource or business idea is valuable if it enables the firm to exploit an opportunity or neutralize a threat - come from human resources system, brand name, or customer service - If the answer is no: the idea is at a competitive disadvantage

Force Field Analysis

A technique for determining which forces drive a proposed change and which forces restrain it. - forces for change: thrusters - preventers for change: counterthrusters

Corporate- Level Strategy : Diversification Implementation

Acquisitions and mergers: allow a company to quickly expand its reach and enter a new market, while still maintaining management control - expensive and requires integrating the two company cultures Joint Ventures and Strategic Alliances: allow companies to enter new markets more quickly and without large investment - sharing rewards; requires trust between companies Internal Development: company gets all of the added value of a new product - time consuming, can be limited by a firm's lack of knowledge/capabilities

Federal Laws Relating to Health and Safety: Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985

Allows employees to retain their health insurance coverage for a period of time after being laid off

Resistance to Change

An emotional and behavioral response to real or imagined threats to an established work routine due to the interaction of three causes: - employee characteristics: perceptions, differences - change agent characteristics: individual who is a catalyst for helping organizations change -change agent employee characteristics: resistance is reduced when change agents and employees have a trusting relationship

Affects of Change

Any change made in each and every target element will ripple across the entire organization; consequently, it affects the people in it

Apple Example

Apple uses a differentiation strategy: - apple is an "analyzer"; it seizes opportunities by latching on to burgeoning markets and striving to be the top competitor in those markets

Strategic Human Resource Planning : Predicting future employee needs

As technology and markets evolve, job descriptions change, and new jobs are created. Managers must predict the staffing the organization might need, as well as the likely sources of that staffing - requires an understanding of the organization's vision and strategic plan

Employment Tests: Performance (skills) Tests

Assesses the applicant's performance on actual job tasks - Assessment Center: an elaborate type of performance test in which management candidates participate in activities for a few days while being assessed by evaluators

Employment Tests: Ability Tests

Assesses the general physical, mental, and clerical abilities of an applicant

Performance Appraisal

Assessment of an employee's performance and providing the employee with feedback - managers judge how the employee is doing in relation to organizational standards

External Recruiting

Attracting top applicants from outside the organization - Job vacancies advertised in newspapers, employment agencies, job-placement offices, social media and through word of mouth (referrals) -PROS: new ideas for growth, new hires may have specialized experience not already present -CONS: expensive, lengthier, risky

Contingency Design: Mechanistic Organizations

Authority is centralized, tasks and rules are clearly specified, and employees are closely supervised - top-down communication - suitable for a stable environment (hotels)

Contingency Design: Organic Organizations

Authority is decentralized, rules and procedures are fewer, and networks of employees are encouraged to cooperate and respond quickly to unexpected tasks - implement improvements as they go along - suitable for unstable environments because the focus is on creativity rather than efficiency

Federal Laws Relating to Compensation and Benefits: Fair Labor Standards Act (1938)

Banned child labor and established minimum living standards for workers engaged in interstate commerce, including the establishment of a maximum workweek and a federal minimum wage

Performance Appraisals: Subjective Appraisals

Based on a manager's perceptions of an employee's traits or behaviors - trait appraisals: rate employees based on certain general characteristics - behavior appraisals: rate employees on job specific, observable, job-related aspects of performance

Performance Appraisals: Objective (results) Appraisals

Based on facts and are often numerical. Measure results independently of personal biases.

Federal Laws Relating to Health and Safety: Occupational Safety and Health Act (OSHA) of 1970

Began a growing body of laws protecting workers from hazardous working conditions

Formation of Organizational Cultures

Begin with the philosophy of the organization's founder(s): Cohen, Greenfield, Kelleher, Gates - As the company's top leadership changes over time, its values may change, so its culture may change as well - top management performs selection and employees influence cultural progression

Operational Plans

Break tactical plans into actionable short term goals; plans specify how the work will get done and what resources will be needed to ensure the organizations objectives will be achieved efficiently and effectively

Cisco Example: Strategic Vision

Building the technical backbone of the internet, changing the way we work, live, play and learn -differentiation ( changed from product to customer-oriented focus) - multidivisional structure

Porter's 5 Forces of Competition: Buyer's Bargaining Power

Buyers have more bargaining power when: there are not that many buyers in the market, when the buyer purchases a high volume, when the buyer is informed and price-sensitive, if there are many firms that could supply the product - factors affecting buyer power: buyer's incentives, brand identity

Case Study: Amazon

CEO Jeff Bezos claims harmony in the workplace is overrated - competitive workplace that focuses on profitability and market share; responsive to customers - employees should: have customer obsession, take ownership of successes and failures, invent and simplify processes to ensure efficiency, have good instincts (which means leaders are right most of the time)

Traditional Designs: Simple structure

Centralized authority, a flat hierarchy, few rules, and low work specialization - firms in their earliest stages

Learning and Development: Off-the-job

Classroom programs, workbooks, videos, and simulations, or games

Example: NetFresh's Mission statement

Clearly states its purpose and values when discussing the ethical treatment of hens - values guide strategic plans, which drive its tactical and operational plans (NetFresh's use of cage-free eggs impacts how much acreage it needs for its farms)

Learning and Development: On-the-job

Coaching, training positions, job rotation, and planned work activities

Traditional Designs: Matrix Structure

Combines functional and divisional chains of command in a grid so that there are two command structures (vertical and horizontal). Merges employees from different divisions but retains a strict chain of command. - employees report to two bosses, a functional and project (divisional) manager - violates the traditional concept of unity of command: an employee should report to no more than one manager to avoid inconsistencies - organization must have a strong culture for this structure to be effective - ADVANTAGES: simultaneously manage multiple organizational dimensions, communication allowing for flexibility, use employees for projects in addition to traditional functional work -DISADVANTAGES: two goals, increase overhead and reduce efficiency, use of teams may lead to diffusion of accountability for results

SWOT: Internal aspects of current reality

Companies engage in benchmarking- refers to the process of a company evaluating its own performance based on how it compares with the performance of high-performing organizations

Porter's observation

Companies fail to recognize the difference between operational efficiency and strategy - strategy is a plan for effectively competing in a market - operational planning ensures that all tasks performed across a company are the most effective

SWOT: External aspects of current reality

Companies gather intelligence about the companies landscape

Formal Appraisals

Conducted at specific times throughout the year and are based on performance measures that have been established in advance

Informal Appraisals

Conducted on an unscheduled basis and consist of less rigorous indications of employee performance - happen more regularly -allow manager to provide support -managers can receive feedback and adjust goals for employees

SHRM Tools: Strategic Human Resource Planning

Consists of developing a systematic, comprehensive strategy for understanding current employee needs and predicting future employee needs

EEOC: Sexual Harassment

Consists of unwanted sexual attention that creates an adverse work environment: - Quid Pro Quo: There is a tangible economic injury, a situation in which a person's employment, benefits, or opportunities will be jeopardized if he or she does not acquiesce to the sexual demands of others - Hostile Environment: occurs when an intimidating or offensive work environment is created (does not need tangible injury)

Strategic Management Step 5: Feedback Loop

Continuously track the internal and external environments for deviations, and use feedback to reformulate plans, rethink policies, and take corrective action

Cultural Values

Create organizational culture - include collective beliefs, assumptions, and general feelings about what is good, valuable, ration, and normal - important for the attraction, selection, and attrition (ASA) model of hiring employees

Example of Strategic Planning: MATTEL

Declining barbie doll sales, so mattel mirrored the current reality by creating dolls of all colors and sizes to be more inclusive and diverse

Case Study: Dell

Dell adopted a long term strategy to focus on enterprise solutions and services - tactical steps: transformation from "core dell" to "new dell" -strategic goal: increase operational efficiency in its core business and use the gains to drive evolution - mission statement: to be the most successful IT systems company in the world by delivering the best customer service experience in all markets we serve

Organizational Architecture

Determined by the organization's structure, culture, and human resource management systems Structure, culture, and human resources establish: - relationships among employees by determining who does what, causing interactions - formal reporting relationships by determining how workers will use resources, who reports to whom, accountability - standing plans (long-term, non-changing) for employees to turn to as they do the organization's work

Types of Operational Planning: Single-Use Planning

Developed for activities that are not likely to be repeated in the future (ex. Domino's name change had not happened for and it is unlikely to happen again)

Types of Operational Planning: Standing Plans

Developed for activities that occur repeatedly over a period of time, allow for consistency and efficiency

Learning and Development: Training

Educating employees how to do better in their current jobs

Learning and Development: Development

Educating employees in the skills and knowledge they will need to do their jobs in the future

Cisco Example: Culture Foundation

Egalitarian Practices - offices same size, everyone apart of ESOP - empowerment, teamwork, open communication, trust

Performance Appraisal Systems: 360-degree assessment

Employees are appraised not only by their managerial supervisors but also by peers, subordinates, clients, and themselves - builds trust

Federal Laws Relating to labor relations: National Labor Relations Board (NLRB)

Enforces procedures whereby employees may vote to have a union and engage in collective bargaining (negotiations between management and employees about disputes over compensation, benefits, working conditions, and job security) - established by the Wagner Act of 1935

SWOT: Organizational Threats

Environmental factors that hinder an organization's achievement of a competitive advantage - Dell: decline in profit margin for its hardware products, competition in the PC and service markets, the growth rate of its PC and laptop markets is decreasing, weak economic outlook in the U.S. and Europe

SWOT: Organizational Opportunities

Environmental factors that the organization may exploit for competitive advantage - company's market segment analysis, government regulations, industry growth analysis -Dell: IT industry growing tremendously, emerging economies are new, high-growth markets

Three Layers that form Organizational Culture: Values

Espoused Values: explicitly stated values and norms preferred by an organization Enacted Values: values and norms actually exhibited by the organization Don't always align: ex. Walmart's customer service

Federal Laws that ensure Equal Opportunity: Equal Employment Opportunity Commission (EEOC)

Established by Title VII in the Civil Rights Act of 1964, enforces anti-discrimination and other employment-related laws. - Focuses on Sexual Harassment (Quid Pro Quo and Hostile Environment) , Workplace Discrimination (Adverse Impact and Disparate Treatment), and Affirmative Action

Strategic Management Step 4: Execute the Strategy

Execution consists of using questioning, analysis, and follow-through to mesh strategy with reality, align people with goals, and achieve promised results.

Michael Porter

Expert on competitive strategy. Stated that the best way of thinking about competition is by focusing strategy on creating a unique organization, which offers something different and something in which it has an advantage over competitors

Three Core Processes of Execution: Strategy

Explains how success will be accomplished in the future - identifies competition and makes assurances that the strategy can be executed and that the short term and long term are balanced - identifies critical issues facing the business

Porter's 5 Forces of Competition: Threats of Substitute Products

Firm faces more competition when there are more available substitutes for its products/services - buyer's power increases when a product is a commodity because there are no switching costs

Operational Planning

First-line managers planning what workers need to accomplish day-to-day for periods of 1 to 52 weeks

EEOC: Affirmative Action (1970s)

Focuses on achieving equality of opportunity within an organization - implementing policies that guarantee equal opportunity for protected groups: active recruitment, minority hiring goals, elimination of prejudicial interview questions

Tools for assessing the current reality (step 2): Forecasting

Forecast is a vision or projection of the future, used by managers to determine strategies going forward

Jack Welch

Former CEO of General Electric - human resources more important than finances to achieving business success - human resources should be in every aspect of business meetings and development - it is wrong to diminish the duties of HR to forms and morale- boosting events

Cisco Example: Organizational Structure after change

Functional Structure; minimized costs and reduced overhead - centralized engineering - PROS: achieving business outcomes, engagement, coherence -CONS: funding and decision making, goal alignment and compensation, data and metrics

Federal Laws Relating to labor relations: Taft-Hartley Act of 1947

Gave the U.S. president the ability to end a strike if it threatens national security

Self- Compassion

Gentleness with yourself - reduces your need to be perfect - easier to accept feedback, responsibility, consider alternatives, and empathize

Execute for Growth: 6 part process

Growth leaders, customers, innovation, great technology, commercial excellence, globalization

Types of Organizational Control: Market Culture

Has a strong external focus , is driven by competition, and values stability and control - effective execution (shown by profits, productivity, and results) is more important than job satisfaction -ex. Amazon/Microsoft/Brown and Brown Insurance ; focus on market trends and productivity goals

Types of Organizational Control: Adhocracy Culture

Has an external focus and values flexibility. Values adaptivity, creativity, and agility in the face of environmental change. - start-ups and innovative companies -ex. Google; values innovation, employee freedom, new opportunities

Types of Organizational Control: Clan Culture

Has an internal focus and values flexibility. Values cohesion, job satisfaction, collaboration, employee development, and commitment - ex. Costco; strongly employee-focused and associated with positive work attitudes

Types of Organizational Control: Hierarchy Culture

Has an internal focus and values stability and control. Have a number of control mechanisms in place to ensure promptness, efficiency, and effectiveness. - successful in a stable market environment - ex. government agencies, Mcdonalds (HamburgerU) ; focuses on logistics, standardization, and the control end process

Authority Positions: Staff Personnel

Have authority functions; providing advice, recommendations, and research to line managers - indicated by dotted horizontal lines in an organizational chart - legal counsel, human resources departments, special advisors

Authority Positions: Line Managers

Have the authority to make decisions, have profit-and-loss responsibility, and usually have people reporting to them - indicated by a solid vertical line in an organizational chart - CEOs, presidents, executive administrative directors

SWOT Analysis advantages

Helps managers set realistic goals, improve their capabilities in "problem areas," establish plans to overcome weaknesses, exploit strengths, and turn threats into opportunities

Porter's 5 Forces of Competition: Competitive Rivalry

High exit barriers and slow industry growth increase competitive rivalry - a firm can mitigate the negative impacts of competition by differentiating itself from the competition

BCG Matrix: Stars

High growth industry, high market share - high, stable, growing earnings and a neutral cash flow - managers should invest in stars to achieve growth - when market growth inevitably slows down, a company's stars become cash cows

Three Levels of Strategy: Corporate

Highest level of strategic management: focus on the organization as a whole - "what industry should we be in?" -ex. IT,Inc.

VRIO: Organization- Is the firm organized to capitalize on the resource or capability?

If it has all necessary things (structure, capital, culture) to harness the value, rarity, and imitability of the business idea, then the firm is organized to exploit it.

VRIO: Imitability- Is the resource or capability costly to imitate?

If others firms can get into the market without having to confront substantial barriers to entry, then the firm's competitive advantage will likely only be temporary

VRIO: Rarity- Is the resource or capability controlled by few or no other firms?

If several competing firms that are duplicating the business idea currently exist, then it is not rare and has only equal competitive potential

Constraints of the HRM Environment:

Imposed by: 1) legislation 2) societal trends 3) changing technology

Three Layers that form Organizational Culture: Artifacts

Include the physical manifestations of cultures, such as how employees dress, how managers act, and how the office is decorated, that are visible but often indecipherable

Decision making

Informed by analysis - managers can encourage lateral thinking with the Six Thinking Hats : each hat allows employees to understand other peoples' perspectives which promotes success

Effective Innovation Systems: Develop necessary human capital

Innovative teams consist of employees with a diverse range of knowledge and experience - creativity, intrinsic motivation, and internal work experience

Effective Innovation Systems: Create an innovative strategy

Integrate innovation activities into normal business strategies

SWOT: Organizational Weaknesses

Internal drawbacks that hinder an organization in executing strategies in pursuit of its mission - Dell: lower profit margins, weak differentiation compared to the past, products becoming commodities, weak R and D

Three Layers that form Organizational Culture: Basic Assumptions

Invisible or preconscious core values that are meant to guide employee perception and behavior - hard to change - ex. assumption of Costco's culture is equality

The Planning/ Control Cycle: Control Steps

Involve controlling the direction as follows: 1) compare the results with the plan 2) take corrective action by correcting deviations in the current plan or by returning to the first step in the cycle and use results to improve future plans

Organizational Designs: Traditional Design

Involve vertical management hierarchies and clear reporting relationships - simple, functional, divisional, and matrix structure

Performance Appraisal Systems: Forced Ranking Performance Review System

Involves a ranking of all employees in a business unit against one another and the distribution of scores along some sort of bell curve - reduces collaboration, compromises employees' morale and productivity

Grand Strategies: Defensive (retrenchment) Strategy

Involves a reduction of the organization's efforts

Grand Strategies: Growth Strategy

Involves expansion- as in sales revenues, market share, number of employees, or number of customers or clients served

Internal Staffing Sources

Involves filling positions with current employees -human resource inventory: a report listing an organization's employees, tracking each individual's education, training, certifications, experience, and other information regarding the skills of the company's talent. A useful tool for identifying employees to promote from within

External Staffing Sources

Involves filling positions with individuals who are not current employees - managers can use the U.S. Bureau data to determine the characteristics of the labor pool in the organization's geographic area

Three Core Processes of Execution: People

Involves hiring, training, and motivating the right people with the right skills to get the job done - focus on who will benefit the firm in the future

Grand Strategies: Stability Strategy

Involves little to no significant change- if the firm faces stiff competition or a changing environment, managers may have to fight hard to maintain their competitive position in the market

A Systems Approach: Transformation Process

Involves targeting elements of change, including people, organizational arrangements, methods, and social factors. - which levers can we pull that will produce the change we want?

Strategic Human Resource Planning : Understanding Current Employee Needs

Job analysis: used to determine, by observation and analysis, the basic elements of a job Job description: summarizes what the holder of a job does and how and why he/she does it Job Specification: describes the minimum qualifications a person must have to perform a job successfully

Selection Tools: Employment Tests

Legally considered to consist of any procedure used in the employment selection decision process (applications, interviews, experience requirements)

BCG Matrix: Dogs

Low growth and market share - Dogs have low, unstable earnings and a negative to neutral cash flow

BCG Matrix: Cash Cows

Low market growth but high market share - high earnings; cows finance stars and question marks - eventually the revenue will "dry up"

Three Levels of Strategy: Functional

Lowest level of strategic management: functional managers (manager of a functional department within a particular business unit) direct how their department will support the business-level strategies -ex. HR, RD, Finance or HR, RD, Marketing

3. Activity System

Makes a company's strategy more difficult for a competitor to copy

Internal Recruiting

Making people already employed by the organization aware of job openings - Job Positioning: the practice of placing info about job vacancies and qualifications on bulletin boards, in newsletters, and on the organization's internet -PROS: increases employee's morale, fewer risks (individual knows the organization), cheap -CONS: limits pool of ideas, danger of employee's assuming seniority will promote them, doesn't fill the vacancy; it moves it to a lower level organization

Narrow Span of Control

Manager has a small number of people reporting to them - best for complex or specialized tasks

Wide Span of Control

Manager has many people reporting to them - easier for standardized tasks

Trends in Organizational Change

Managers can plan for future change by identifying trends such as: workforce diversity, the importance of knowledge, increased globalization, and the customization of mass goods

Effective Innovation Systems: Assemble the appropriate resources

Managers must allocate resources (money, time, energy, knowledge, people, focus) to innovation

Employment Tests: Personality Tests

Measures personality traits, like the need for achievement, energy, emotional intelligence, ability to be a team player, sociability, resilience, and adaptability - ethics/integrity tests to determine if a candidate's morals will coincide with the organization's ethics

Three Levels of Strategy: Business

Middle level of strategic management: focus on individual business units (product lines) - "how will we compete in this market?" - ex. PCs, or TVs, or etc.

Tactical Planning

Middle managers planning how the overarching goals will be accomplished for the next 6 to 24 months

Porter's 5 Forces of Competition: Threat of new entry

New competitors take customers from existing organizations - higher barriers to entry make it costlier for new firms to enter the market and the less competitive the market will be - barriers: cost advantages, switching costs, proprietary products or learning curve, access to inputs and distribution, brand identity, gov. policy, technology, etc.

BCG Matrix: Question Marks

New ventures with a high market growth rate and low market share - results in low growing earnings and negative cash flow

Diversification Strategies : Related Diversification

Occurs when an organization operates, under one ownership, several separate businesses that are related to one another - Vertical integration: a firm expands into the industries that provide supplies used in producing its products, or into the industries that distribute and sell its products

Diversification Strategies : Unrelated Diversification

Occurs when an organization, under one ownership, operates several unrelated businesses. - ex. Warren Buffet: insurance, candy, shoes

Three Levels of Planning: Operational Planning

Occurs when first-line managers determine how to accomplish specific tasks with available resources - first line managers: team leaders, unit managers, first line supervisors; direct tasks of non-managerial employees and ensure operational plans are properly implemented

Three Levels of Planning: Tactical Planning

Occurs when middle managers determine what contributions their departments or similar work units can make with their given resources they expect to have available - middle managers: functional, department, and product-line managers

EEOC: Workplace Discrimination

Occurs when people are hired/ promoted or denied hiring/promotion for reasons not relevant to the job -Adverse Impact: occurs when an employment practice or procedure negatively impacts a protected class of individuals (employers must be able to justify job specifications/requirements) -Disparate Treatment: occurs when organizations intentionally treat individuals from protected groups differently

GE and Forces of Change (changing nature of competition)

Old model: developing high-end products at home and adapting them for other markets - won't suffice as growth slows in developed nations New Model: reverse innovation - develop products in emerging countries and distribute them globally

The Strategic HRM Process

Once an organization has determined with human resources it needed, it can continue: - recruit and select individuals - engage in orientation, training, and development - appraise employee performance

Accepting Change

Openness to change involves being flexible, viewing change as a challenge, and being willing to apply new ideas, processes, and directives

Hierarchy of Organizational Goals

Operational, tactical, and strategic constitutes the means that lead to the accomplishment of the ends (higher-level goals)

Challenges managers face while organizing:

Organizational Structure: a system of tasks and reporting relationships that coordinate and motivate an organization's members so that they can work together to achieve goals Organizational (corporate) Culture: a system of shared beliefs and values that develops within an organization and guides the behaviors of its members - "social glue: ; informal control mechanism

Effective Innovation Systems: Establish the required structures and processes

Organizational structure and internal processes should foster collaboration, communication, and agility -crowdsourcing - 4 agility techniques: emphasize people, be responsive to change, develop prototypes and test ideas, collaborate with customers and adjust to their preferences

Contingency Design: Link between Strategy and Structure

Organizational structure should be based on the strategy the organization hopes to implement through its structure and should be suitable for a company's culture - business performance depends on the "fit" between strategy and structure

Self- Affirmation Theory

People are motivated to maintain self-integrity - restore self worth through defense mechanisms - change beliefs about yourself using affirmations (positive statements that help you focus on goals) that broaden your self view

Principles of SHRM: Knowledge Workers

People whose work involves generating or interpreting information rather than manual labor - employees become more valuable over time as they learn firm-specific skills/ knowledge

Traditional Designs: Divisional Structure

People with diverse occupational specialties are put together in formal groups with similar products or services, customers or clients, or geographic regions -ex. Disney or Amazon -ADVANTAGES: greater focus possible with specialization, coordination, managers can allocate resources to the appropriate divisions, clear accountability -DISADVANTAGES: unnecessary and costly functional duplication, potential for loss of control, hard to maintain a unified sense of identity and organizational culture

Traditional Designs: Functional Structure

People with similar occupational specialties are put together in formal groups - focused on efficiency and is best for small firms or firms with a single programmatic focus -ex. a hospital may have separate departments for medical services, administrative services, and outpatient services all headed by a director who reports to the chief administrator - ADVANTAGES: managers can easily monitor, people can learn from one another, managers are only responsible for one function and can achieve success easier -DISADVANTAGES: hard to communicate between groups, lose sight of the organization's overall goals, breakdown of processes across functions

Seinfeld Example

Poor planning: car reservation was not available; results in a loss of customer loyalty and profit

Tools for assessing the current reality (step 2): Porter's 5 Forces of Competition

Porter's model for industry analysis suggests that the average industry profits vary as a result of pressure from 5 primary competitive forces that each influence productivity - industries with less overall competition have higher average profits

Orientation

Process of helping a newcomer fit smoothly into the job and the organization. - "learning the ropes" - large organization's: formal and structured orientation -small organization's: informal and unstructured

Change

Process of moving from an unsatisfactory present state to a desired state - organizations (individuals) that do not adapt to change in a timely manner are unlikely to prosper or even survive - causes stress in employees; managers must be proactive with implementing organizational change

Learning and Development

Programs facilitate employee involvement by bridging the gap between what employees already know and what they need to know to perform their jobs well

Benefits of Strategic Planning

Provides direction and momentum - strategy is a theorized idea of how to be successful Inspires innovation by focusing on the present and future - firms can recognize trends and opportunities for expansion, development, or growth -strategy innovation can lead to a firm reinventing the basis of competition Cultivates a sustainable competitive advantage - planning creates dynamic

Three Core Processes of Execution: Operations

Provides people with a path to follow - describe the company's activities and their short term objectives

Strategic Plan

Provides the organization with the overall blueprint for how the organization will achieve its goals

Functions of Organizational Culture

Providing Direction: gives employees a sense-making device indicating where the organization is going Provide Organizational Identity: culture provides organizational members with a sense of who they are and what they're doing Facilitate Collective Commitment: culture promotes loyalty and respect toward an organization, that employees can identify with; they will work harder Promote Social-system Stability: positive work environments are more stable , promoting efficiency and productivity

Subjective Appraisal: Behaviorally Anchored Rating Scale (BARS)

Rates employee performance according to scales of specific behaviors - 5 point scale, such as from "always early" to "habitually late"

Proactive (planned) Change

Refers to carefully though-out changes made in anticipation of possible or expected problems or opportunities - 4 Strategies to help companies get ahead of change: listen to customers, offer outstanding customer experience, appreciate the difference between change and a crisis, embrace change -ex. Netflix, retail

Reactive Change

Refers to making changes in response to problems or opportunities as they arise -ex. BP's oil rig, Blockbuster

Orientation: ONBOARDING

Refers to programs designed to help employees integrate, or fit in. Involves familiarizing new employees with policies, procedures, organizational culture, politics, and clarifying work expectations.

Principles of SHRM: Human Capital

Refers to the economic or productive potential of employee knowledge, experience, and actions - provide the organization with a competitive advantage and an intangible asset - workers with human capital are more productive/make better decisions, therefore, they have more economic value - developing human capital: career development, rewards and recognition, recruiting, performance appraisals, and workforce planning

Principles of SHRM: Social Capital

Refers to the economic or productive potential of strong, trusting, and cooperative relationships - important when organizational success depends on the coordination of employees and activities

Contingency Design

Refers to the process of fitting the organization to its environment - contingencies that can affect the kind of structure that is best for an organization: mechanistic environment, organic environment, link between strategy and structure

The Strategic HRM Process: Selection

Refers to the screening of job applicants to hire the best candidate. This process requires the organization to predict each candidate's likelihood of success and satisfaction with the job

Federal Laws Relating to Health and Safety: Patient Protection and Affordable Care Act (2010)

Requires firms with 50 or more employees to provide health care coverage

Equal Pay Act of 1963

Requires that men and women be paid the same amount for doing the same job

Age Discrimination in Employment Act (ADEA) of 1967 (amended 1078 and 1986)

Restricts mandatory retirement and prohibits age discrimination

Example: Coca-Cola mission, vision, and value statements

Roadmap starts with Mission: enduring - to "refresh the world, inspire moments of optimism and happiness, create value and make a difference" Framework of the roadmap guides their vision: quality growth - people, portfolio, partners, planet, profit, productivity Values: serve as a compass for actions and describe behavior - leadership, collaboration, integrity, accountability, passion, diversity, quality

Learning and Development: Microlearning

Segments material into bit-size content; employees must master a small amount of material before advancing to anything else

Cisco Example: Reorganization (2001)

Shift from multidivisional to functional entailed - central marketing: integrate products and technologies into solutions - goal: promote rapid technical innovation by eliminating overlap in R and D

Action Plan

Shows day-to-day activities of employees across the organization (means) work in tandem in order to deliver overarching strategic goals (ends)

Structured Interviews: Situational and Behavioral-description

Situational: interviewer uses hypothetical situations to test the candidate's ability to do the job Behavioral-description: involve an exploration into what applicants have actually done in the past

Strategic Management Step 5: Monitor the Process to Maintain Strategic Control

Strategic Control refers to monitoring the execution of strategy and making adjustments if necessary

Effective Innovation Systems: Get top managers' commitment

Strategic goals can only be achieved if top managers show a commitment to them

Business-Level Strategy : Porter's Four Competitive (generic) Strategies

Target either wide markets (cost-leadership and differentiation strategy) or narrow markets (cost-focus strategy and focused- differentiation strategy)

Horizontal (team-based) Organizational Design

Teams are used to improve collaboration and work - internal boundaries are broken down

Performance Management

The continuous cycle of improving job performance through goal setting, feedback and coaching, and rewards and positive reinforcement 1) express performance expectations 2) monitor progress and evaluate outcomes 3) provide feedback and coaching 4) provide rewards or consequences

A Systems Approach: Outputs

The desired goals of a change, should match up with the organization's strategic plan - what do we want from the change?

Person-Organization Fit

The extent to which an individual's personality and values reflect the climate and culture of an organization - avoiding mismatches in person-organization fit helps reduce turnover

Designs that Open Boundaries: Virtual Structure

The firm creates a company outside a company specifically to respond to attractive (and often temporary) market opportunity - involves the creation of virtual organization: members are geographically separated, usually working through email, collaborative computing, and other computer connections - make use of independent contractors to meet short-term organizational needs -ADVANTAGES: not bounded by geological barriers, lower fixed costs because no rent, less time and money needed for travel -DISADVANTAGE: difficult to have behavioral norms or a strong culture virtually

Models of Change: Radically Innovative Change

The introduction of a practice that is new to the industry - most complex, costly, and uncertain - receives the most resistance from employees

Models of Change: Innovative Change

The introduction of a practice that is new to the organization

Porter's 5 Forces of Competition: Supplier's bargaining power

The more concentrated the industry, the greater the bargaining power of suppliers - if there are only few firms that can supply, each individual supplier has a lot of bargaining power - influencing supplier power: differentiation of inputs, threat of forward integration, importance of volume and cost relative to total industry purchases

Selection Tools: Interviewing (Unstructured v. Structured)

The most commonly used selection technique - Unstructured Interviews: involve asking probing questions to find out what an applicant is like. They have no set questions or procedure which the interviewer can score responses, so it is highly subjective - Structured Interviews: involve asking each applicant a fixed set of questions and comparing their responses to a standardized set of answers

Selection Tools: Background Information

The organization can get basic information about a candidate from his/her application and resume. - resumes can often lie or exaggerate - employers looking to social networks to determine the quality of a candidate - consultations with references and credit scores

Effective Innovation Systems: Foster a culture and climate of innovation

The organization must permit risk taking, tolerate failure, and encourage experimentation

Step 2 of the Strategic Management Process: Examine the current reality

The organization should internally and externally examine where it stands with its stakeholders, what is working well in achieving its vision, and what can be changed to increase organizational efficiency and effectiveness

A Systems Approach: Inputs

The organization's mission statement, vision statement, strategic plan, and evaluation of the organization's readiness for change - why and how should we change?

Strategic Human Resource Management (SHRM)

The process by which managers design the components of a human resource management system to be consistent with each other, with other elements of organizational architecture, and with the organization's strategy and goals - can be used to establish a competitive edge and a lasting competitive advantage: firms must find the right people, manage their talent, and maintain an effective workplace

Innovation

The process of coming up with new ideas and turning them into useful into applications

The Strategic HRM Process: Recruitment

The process of locating and attracting qualified applicants for positions in the organization - Realistic Job Preview: gives a candidate a picture of both the positive and negative features of a job and the organization before the candidate is hired

Models of Change: Adaptive Change

The reintroduction of a familiar practice - the least complex, costly and uncertain

Tools for assessing the current reality: SWOT (situational) analysis

The search for the strengths, weaknesses, opportunities, and threats affecting the organization

Organizational Designs: Horizontal Design

The use of temporary or permanent teams to break down internal boundaries and improve collaboration - Cross-functional teams bring together members of different functional divisions to work together and solve problems - ex. Ford to eliminate redundancy and costs -ADVANTAGES: organizational learning, improve responsiveness to customers because of rapid communication, teamwork creates flexibility, empowerment, and broader perspectives - similar to matrix structure but is more efficient and flatly organized

Diversification Strategies : Related Diversification

This decision should be influenced by how much strategic similarity the businesses have with regard to: - Resource Allocation: making products that involve the same type of management, capital investment, production, or similar sources of risk - Strategy Formulation: making products that have similar key success factors, are in similar stages of the industry life cycle, or occupy similar competitive positions -Performance Management: making products that have targets that are defined in similar performance variables

Three Levels of Planning: Strategic Planning

Top managers (including CEOs, presidents, VPs, general managers, and division heads) formulate long term plans with knowledge of ever-changing and increasingly competitive advantage

Strategic Planning

Top managers planning the overarching vision for the firm for periods of 1 to 5 years

Legal Constraints on HRM

U.S. organizations must operate within American laws, so HR managers must know what the law is and what the organization's obligations under the law are .

A Systems Approach

Used to examine the change process. A system is a set of interrelated parts operating together for a common purpose.

Porter's Four Competitive Strategies: Cost-leadership strategy (wide market)

Used to keep the costs, and hence the prices, of a product or service below those of competitors. - focus on the efficiency of their process - business has access to capital, process, engineering, skills, tight cost controls, job specialization, frequent reports, and incentives for reaching quantitative goals

Porter's Four Competitive Strategies: Cost-Focus Strategy (narrow market)

Used to keep the costs, and hence the prices, of a product or service below those of competitors. - produce and sell low-end products; managers pressured to keep costs low

Porter's Four Competitive Strategies: Differentiation Strategy (wide market)

Used to offer products/services that are of unique and superior value compared to those of competitors - requires marketing to emphasize branding, product engineering, product research/development, strong coordination, and incentives - leads to a higher price point than competitors, but customers are willing to pay more for more perceived value

Porter's Four Competitive Strategies: Focused- Differentiation Strategy (narrow market)

Used to offer products/services that are of unique and superior value compared to those of competitors.

1. Three ways to create a unique and valuable position in the minds of customers:

Variety Based Positioning: produces a subset on an industry's products or services - based on one function, rather than customer segments -allows for specialization -FEW NEEDS, MAY CUSTOMERS Needs Based Positioning: attempts to serve the various needs of a particular group of customers - works well when groups of customers have differing needs, and a narrowly set of activities can serve those needs -BROAD NEEDS, FEW CUSTOMERS Access Based Positioning: segments customers who are accessible in different ways, rather than the actual differences between them - geography, age, customer scale - BROAD NEEDS, MANY CUSTOMERS

Tools improving strategic execution:

Visible Leadership: Managers can display this by motivating people, modeling desired behaviors, and by shaping culture, norms, and values Clear Roles and Accountability: Top managers define roles, delegate authority, and hold individuals accountable Candid Communication: Managers should create a culture of honesty/openness and must listen to and encourage debate among subordinates Appropriate Human Resource Practices: Managers should ensure that the organization's recruiting, selection, training, compensation, promotion, transfers, and layoffs fit in well with the strategy

Cisco Example

Worldwide leader in networking for the internet (IP- based); creative internet solutions to increase productivity, improve customer satisfaction and strengthen competitive advantage

Business Plan

a blueprint for action that details how an organization is going to realize its goals through its strategic and operating plans (a written document that defines the firms objectives, strategy, and measure of success)

Types of Innovation: Product Innovation

a change in the appearance or performance of a product or service or the creation of a new one

Types of Innovation: Process Innovation

a change in the way a product or service is conceived, manufactured, or disseminated

Encouraging Innovation: Innovation system

a coherent set of interdependent processes and structures that dictates how the company searches for novel problems and solutions, synthesizes ideas into a business concept and product designs and selects which projects get funded

Forecasting: Trend Analysis

a hypothetical extension of a past series of events into the future

Organizing

a management function that involves the deployment of resources in a way that will achieve strategic goals

Strategic Management

a process that involves managers from all parts of the organization in the formulation and the implementation of strategies and strategic goals

Organization

a system of consciously coordinated activities or forces of two or more people: For-Profit, Nonprofit, and Mutual-Benefit

Strategic Formulation Process

can be broken down into two main stages: The strategic planning process: 1) define and clarify a mission and objectives 2) assess environment for threats and opportunities 3) assess internal strengths and weaknesses 4) consider alternative strategies using competitive analysis 5) choose a strategy Implementation process: 1) implement strategy through structure, system, and operational processes that work together 2) set up control and evaluation systems to ensure success 3) feedback to planning

Effective Innovation Systems: Institute HR policies, practices, and procedures

companies should reinforce these points

Human Resource (HR) Management

consists of the activities managers perform to plan for, attract, develop, and retain an effective workforce - component of the strategic planning process

The Planning/ Control Cycle

continuous feedback loop for each level of planning

sustainable competitive advantage

continuously gives the firm a leg up in the industry and will ultimately allow the organization to retain customers and be profitable

Scope of Innovation: New direction Innovation

creates a totally new or different approach to a product, service, process, or industry - generally result in higher profit increases and faster growth rates for a company

Invention

creating or making up something new

Business Model (in the business plan)

describes the firm's position, operations, competitive advantage, marketing strategy, method of financing, and expected revenues and expenses (outlines how an organization will deliver its value proposition)

Standing Plans: Rule

designating specific required action (ex. the retailer will honor warranty, for a certain time period, by replacing them)

Purposeful Darwinism

employees are literally ranked and must defend themselves in order to keep their position - used by Amazon, along with employee feedback and data-driven management

Single-Use Planning: Program

encompasses a range of projects or activities

Single-Use Planning: Project

encompasses a smaller range of tasks or activities than a program (ex. plans for redesigning Domino's logo)

Mission Statement

express the organization's mission: its reason for being - top management and the board of directors determine the purpose of the organization, including the needs it exists to address

Values Statement

expresses the organizations values: what core priorities it stands for, its culture, what beliefs it wants to emphasize, what standards are embodied by its employees, and what contributions it offers the world

Vision Statement

expresses the organizations vision : where it wants to go, what actions it needs to get there, what it wants to become, and a clear sense of the future it wants to accomplish

For-Profit Organizations

formed to make money, or profits, by offering products or services

Nonprofit Organizations

formed to offer services to certain clients, not to make a profit

Centralized Authority

higher-level managers make decisions

Value Proposition

how the organization will exploit its core competencies, deliver value to customers, and build synergy in its operations

Civil Rights Act of 1991

increased financial damages and jury trials in cases of intentional discrimination before - only back pay, lost benefits, fees, etc. now - compensatory and punitive damages

SWOT: Organizational Strengths

internal skills and capabilities that give the organization special competencies and competitive advantages in executing strategies in pursuit of its mission -ex. production process, product quality, customer service reputation - Dell: high brand value, large global footprint, broad product/service portfolio, expertise with mergers, product customization

Strategy

large-scale action plan that sets the direction for an organization - purpose: determines where to invest time and effort in order to effectively utilize resources

Decentralized Authority

middle-level and supervisory-level managers delegated by higher managers have power to make decisions

Scope of Innovation: Improvement Innovation

modifies an existing product, service, or process

Standing Plans: Policy

outlines the general response to a designated problem or situation (ex. purchase includes warranty protection for product defects)

Standing Plans: Procedure (standard operating procedure)

outlines the responses to a particular problem or circumstance (ex. how a customer goes about claiming the warranty, such as requiring a receipt)

Operational Efficiency

performing tasks better than competitors - strategic success would be impossible without this necessity - not sufficient to be the sole driver of a company's decision making

Americans with Disabilities Act (ADA) of 1990

prohibits discrimination based on disability and requires employers to make "reasonable accommodations" for an individual's disability

The Bureau of Labor Statistics

provides data regarding the projected growth of occupations in a given industry, and then the projected graduation rate of qualified individuals

Strategy Implementation

putting strategic plans into effect - managers must eliminate potential roadblocks to successful implementation, such as organizational structure, organizational culture, and employees' resistance to change

How to be a successful company:

regularly reconfigure assets and capabilities to ensure resources are being used to best take advantage of new opportunities or to minimize threats

Organizational Charts

reveals who reports to whom and who specializes in what work

Operational Goals

set by and for first-line managers and are concerned with short-term matters associated with realizing tactical goals

Tactical Goals

set by and for middle managers and focus on the actions needed to achieve strategic goals

Strategic Goals

set by and for top managers (i.e the C-Suite) and focus on objectives for the organization as a whole

3. Virtuous Circle

several activities that reinforce one another - the "fit" among various activities in a company (southwest) makes a strategy particularly effective

Means-End Chain

shows how strategic goals are connected or linked across an organization and lead to operating activities - use cascading objectives: more specific at a lower level - operational goal can be broken down into an action plan

Goals (Objectives)

specific commitments to achieve a measurable result within a stated period of time - organizations goals shaped by statements

competitive advantage

the ability of an organization to produce goods or services more effectively and efficiently than competitors do, thereby outperforming them

Forecasting: Contingency Plan (scenario planning/analysis)

the creation of alternative hypothetical, but equally likely, future conditions - helps a firm react quickly and decisively when things don't go as planned

Organizational Design

the establishment of optimal organizational structures that will establish accountability and responsibility and ultimately help the firm achieve its strategy

Planning

the managerial function that involves setting goals and deciding how to achieve them

Accountability (authority)

the obligation to report and justify work results to people higher in the organizational hierarchy

Delegation (authority)

the process of assigning managerial authority and responsibility to managers and employees lower in hierarchy

Diversification is beneficial when:

two companies can achieve synergy, which is when the total value they achieve combined is more than the total value they could achieve if each were on its own - more strategic relatedness in corporate management tasks is an indication that the proposed diversification is more likely to achieve synergy

Mutual-benefit Organizations

voluntary collectives whose purpose is to advance member's interests - ex. unions and trade associations