MGMT 3000 Exam 2 - Chapter 9 Slides Review

The best alliances are true partnerships that meet these criteria:

1.Relationship: Both partners work hard on developing a positive working relationship. 2.Metrics: The partners measure how they are going to succeed, not just the end result. 3.Differences: The partners embrace differences in one another. 4.Control: Both partners encourage collaborative behavior with less emphasis on formal systems and structures. 5.Management: The partners manage their internal stakeholders who are involved in the alliance.

I S O 9001

A series of quality standards developed by the International Organization for Standardization to improve total quality in all businesses for the benefit of producers and consumers Seven principles: 1.Customer focus. 2.Leadership. 3.Involvement of people. 4.Process approach. 5.Improvement. 6.Evidence-based decision making. 7.Relationship management.

Strategic Alliances

A strategic alliance is a formal relationship created to jointly pursue mutual goals. Different organizations share administrative authority, form social links, and accept joint ownership. Alliances occur between companies, nongovernmental organizations (NGOs), governments, universities, and very importantly - across sectors.

A ________blank organization can often create scale economies and economies of scope, which leads to advantages such as lower operating costs, greater purchasing power, and easier access to capital. A: Large B: Highly Flexible C: Mass Customized D: Small. E: High Agility

A: Large Size creates scale economies—that is, lower costs per unit of production. Size can offer specific advantages such as lower operating costs, greater purchasing power, and easier access to capital. Size also creates economies of scope.

Franz wants to balance the strategic triangle for his company. To do this, he must consider the company, the customer, and the A: competition. B: government. C: board of directors. D: suppliers. E: shareholders.

A: competition. Any business unit must take into account at least three core players in the strategic triangle: the company itself, the competition, and the customer

Ricardo is the owner of Mex Magic, a chain of restaurants serving reasonably priced Mexican food with fresh, healthy ingredients. He has discovered that the rising price of avocados and some of the other fresh produce the restaurants use has been driving down profits. Customers have come to expect high-quality ingredients for a low price, and Mex Magic's marketing research has shown that the upscale interior of the stores, along with its great customer service, are a big draw. The feedback has also shown that a large percentage of the customers come with children. If Mex Magic is to be truly responsive to its market environment while maximizing profits, Ricardo should: A: adapt to the rising cost of avocados by raising the price of guacamole on the menu. B :reduce the waitstaff, as well as the number of cashiers, in order to lower payroll costs. C: add child-friendly entrees that include fries or chips instead of guacamole. D: consider removing menu items that rely heavily on fresh ingredients. E: expand the bar so as to draw in more adult customers, with or without children.

C: add child-friendly entrees that include fries or chips instead of guacamole. The formal structure of an organization is put in place to control people, decisions, and actions. But in today's fast-changing business environment, responsiveness—quickness, agility, the ability to adapt to changing demands—is vital to a firm's survival. Implementing measures that appeal to his customer base, which includes many families with children, is a smarter choice for Ricardo than simply cutting costs on avocadoes or other components of the restaurant's overhead.

The mechanistic organization emphasizes flexibility and is less rigid than the organic structure. Poll: True or False

False The organic structure stands in stark contrast to the mechanistic organization. It is much less rigid and, in fact, emphasizes flexibility

Conditions that Support Lean Manufacturing

People are broadly trained rather than specialized. Communication is informal and horizontal among line workers. Equipment is general-purpose. Work is organized in teams, or cells, that produce a group of similar products. Supplier relationships are long-term and cooperative. Product development is concurrent, not sequential, and is done by cross-functional teams.

Salesforce's Service Cloud offers a solution used by companies including Adidas, The Container Store, and Athena Health.

Service Cloud software scans for and locates messages about clients' products on social media platforms. When the software detects a problem, Service Cloud agents then step in and offer to help, potentially saving its client's relationship with a customer.

Downsizing

The planned elimination of positions or jobs •Eliminate functions, hierarchical levels, or entire units. •Replace full-time employees with part-time or temporary workers.

Although volume and variety traditionally required tradeoffs, companies today try to produce both high-volume and high-variety products at the same time.

This is mass customization. Companies want to deliver customization at low cost. They organize (see Exhibit 9.5 recreated here) around a dynamic network of relatively independent operating units. Each unit performs a specific process or task—called a module—such as making a component, performing a credit check, or using a particular welding method. Outside suppliers or vendors may perform some modules.

Netflix's ________ culture has clearly been winning one with a valuation of $200 billion and more than 160 million subscribers.

agile

•Centralized organizations

are where high-level executives make most decisions and pass them down to lower levels for implementation.

•Decentralized organizations

are where lower-level managers make important decisions.

Formal and Informal Organization Structures

contrasts the formal structure of an organization—epitomized by the organization chart— to the informal structure, which is much more organic.

Just-in-time (J I T):

•Manufactures in very small lots and delivers to the next stage of the production process just as they are needed. JIT manufactures subassemblies and components in very small lots and delivers them to the next stage in the process precisely at the time needed (just in time).

Dynamic capabilities:

•"Higher-level" strategic capabilities that aid rapid adaptation.

Concurrent engineering:

•A design approach in which all relevant functions cooperate jointly in a maximum effort aimed at producing high-quality products that meet customers' needs. is a major departure from the old development process that did various functional tasks sequentially. In contrast, concurrent engineering uses a team-based approach to incorporate the perspectives of all functions—and customers and suppliers—from the beginning of the process. This results in a higher-quality product that is designed for efficient manufacturing and customer needs.

Mechanistic organization:

•A form of organization that seeks to maximize internal efficiency. •A formal, rigid structure with clear reporting relationships between bosses and subordinates plus rules and regulations ensuring that employees do basic work activities in standard ways

Customer relationship management (C R M):

•A multifaceted process focusing on creating two-way exchanges with customers to foster intimate knowledge of their needs, wants, and buying patterns.

Continuous process:

•A process that is highly automated and has a continuous production flow.

Total quality management (T Q M)

•An integrative approach to management that supports the attainment of customer satisfaction through a wide variety of tools and techniques that result in high-quality goods and services.

Organic structure:

•An organizational form that emphasizes flexibility.

Ordinary capabilities:

•Basic administrative and operational functions needed.

Small Organizations

•Large organizations can have difficulty managing relationships. •Large organizations are more difficult to coordinate and control. •Nimble small firms may outmaneuver big bureaucracies.

Big Organizations

•Larger size helps create economies of scale. •Larger size helps develop economies of scope. Size creates scale economies—that is, lower costs per unit of production. Size can offer specific advantages such as lower operating costs, greater purchasing power, and easier access to capital. Economies of scope--Economies in which materials and processes employed in one product can be used to make other, related products.

Flexible factories:

•Manufacturing plants that have short production runs, are organized around products, and use decentralized scheduling. CIM enables flexible factories, which serve customers needing fast turnaround on relatively small orders.

Lean manufacturing:

•Operations that eliminate unnecessary steps in the production process and continually striving for improvement. Another organizing approach, lean manufacturing, strives for the highest possible productivity and total quality, cost-effectively, by eliminating unnecessary steps in the production process and continually striving for improvement.

Six sigma quality:

•Systematically analyzing work processes to identify and eliminate virtually all causes of defects, standardizing the processes to reach the lowest practicable level of any cause of customer dissatisfaction. a set of statistical tools to analyze the causes of product defects. Sigma is the Greek letter used to designate the estimated standard deviation or variation in a process. At six sigma, a product or process is defect-free 99.99966 percent of the time—fewer than 3.4 defects or mistakes per million.

Large batch:

•Technologies that produce goods and services in high volume.

Small batch:

•Technologies that produce goods and services in low volume.

Managers must stay focused on at least three core players known as the strategic triangle:

•The company itself. •The competition. •The customer.

Core capability:

•The knowledge, expertise, or skill that underlies a company's ability to be a leader in providing a range of goods or services.

Logistics:

•The movement of resources into the organization (inbound) and products from the organization (outbound).

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.

Computer-integrated manufacturing (C I M):

•The use of computer-aided design and computer-aided manufacturing to sequence and optimize multiple production processes. Mass customization is made possible by computer-integrated manufacturing (CIM),