Management 4000 Final

7 principles of admirable business ethics

1) be trustworthy, 2) be open minded, 3) honor commitments and obligations, 4) do not misrepresent, exaggerate, or mislead, 5) be a visibly responsible community citizen, 6) utilize your accounting practices to eliminate questionable activities, 7) do unto others as you would have them do unto you

steps in QSPM

1) make list of firm's key external opportunities and threats and internal strengths and weaknesses in left column, 2) assign weights to each external and internal factor, 3) examine stage 2 (matching) matrices and identify alternative strategies that the organization should consider implementing, 4) determine attractiveness scores, 5) compute total attractiveness scores, 6) compute sum total attractiveness scores

steps in product positioning

1) select key criteria that effectively differentiate your product/ service, 2) create 2d product positioning map, 3) look for vacant areas (niches). 4) develop marketing plan

price earnings ratio method=

(stock price / EPS) x net income

example of ethically, legally, and economically responsible companies

Walmart, SAS, P&G

social responsibility

action an organization takes beyond what is legally required to protect or enhance the well being of living things

business ethics

principles of conduct within organizations that guide decision making

QSPM stands for

quantitative planning matrix

example of ethically and economically responsible companies

the body shop

symptoms of ineffective organizational structure

too many levels of management, too many meetings attended by too many people, too much attention directed toward solving inter-departamental conflicts, too large a span of control, too many unachieved objectives

net worth method=

total shareholder's equity - (goodwill + intangibles)

2 criteria of effective product positioning

uniquely distinguishes company, leads customers to expect slightly less service than a company can deliver

example of economically responsible companies

Ford (pinto), Enron, Nestle

example of legally and ethically responsible companies

GE, Dicks

example of ethically responsible companies

J&J (tylenol), Heaven's Hill, Merck (river blindness)

example of legally responsible companies

Napster

example of legally and economically responsible companies

Protective bankruptcy, union carbide

disadvantages of functional structure

accountability forced at the top, delegation of authority and responsibility is not encouraged, minimize career development, low employee and manager morale, inadequate planning for products and markets, leads to short term narrow thinking, leads to communication problems

advantages of divisional structure

accountability is clear, allows local control of local situations, creates career development chances, competitive internal climate, promotes delegation of authority, allows easy adding of new products or regions, allows strict control and attention to products, customers and or regions

reasons for CSR

address social issues business caused and allow business to be part of the solution, protects business self-interest, limits future government intervention, addresses issues by using resources and expertise, addresses issues by being proactive

what does consonance mean?

agreement or compatibility

what do policies reduce?

amount of time managers spend in decision making

what is a major instrument for monitoring projects to achieve long term goals/ objectives?

annual objectives

what is the basis for allocating resources?

annual objectives

what is the primary mechanism for evaluating managers?

annual objectives

long term objectives are broken down into:

annual objectives for divisions

balanced score card

approach to strategy evaluation that aims to balance short and long term concerns, financial and non-financial concerns, internal and external concerns

what do policies set?

boundaries, constraints, and limits on the kind of administrative actions that can be taken to reward and sanction behavior

feasibility

can the strategy be attempted within the resources of the firm

3 general motives of legal responsibility

compliance, avoid civil litigation, anticipation

internal evaluating strategies

consistency, feasibility

external evaluating strategies

consonance, advantage

4 criteria for evaluating strategies:

consonance, advantage, consistency, feasibility

disadvantages of divisional strucutre

costly, duplication of functional activities, requires skilled management force, requires elaborate control system, competition among divisions can become so intense it is dysfunctional, can lead to limited sharing of ideas and resources, some regions/ products/ customers may receive special treatment

why strategy evaluation is more difficult today

domestic and world economies are more interrelated, product life cycles are shorter, technological advancements are faster, change occurs rapidly, competitors abound globally, planning cycles are shorter, social media and smart phones

restructuring is also known as

downsizing, right sizing, delayering

individual barriers to change

economic insecurity, fear of the unknown, threats of social relationship habit, failure to recognize need for change

how to determine correct strategy (what leads to what?)

environment -> strategy -> structure

espouses vs. engage

espoused is what they say they care about, engaged is the action taken

3 domain appraoch

ethical, legal, economic responsibility

3 basic activities of strategy evalution

examine underlying bases of firm's strategy, compare expected results with actual results, take corrective actions to ensure performance confroms to plans

sustainability

extent that an organization's operations and actions protect, mends and preserve rather than harm or destroy natural environment

4 perspectives of balanced scorecard

financial, learning and growth, customers, internal business processes

types of managing resistance to change

force change, educative change strategy, self-interest change strategy

divisional structure

functional activities are performed both centrally and separately in each division, geographic area, product and service, customer process

2 common structures

functional, divisional

alternative segmentation strategies

geographic, demographic, psychographic, behavioral

functional structure

groups tasks and activities by business function (productions and operations, marketing, finance and accounting, R&D, management info systems)

what does structure largely dictate?

how objectives and policies will be established and how resources will be allocated

what is market segmentation widely used in?

implementing strategies

for product positioning map, where do you not want to be?

in the middle of the map

what do intensive strategies require?

increased sales through new markets and products

policies (lowercase p)

instruments for strategy implementation

retention based segmentation questions

is customer at high risk of cancelling company's service? is customer worth retaining? what retention tactics should be used to retain customer?

questions for balanced scorecard

is the firm continually improving and creating value along measures such as innovation, tech leadership, product quality, operational process efficiencies? is the firm sustaining and improving core competencies and competitive advantages? how satisfied are customers?

intensive strategies

market development, market penetration, diversification

marketing mix components are directly affected by

marketing segmentation

net income method=

net income x 5

EPS=

net income/ number of outstanding shares

corporate valuation methods

net worth method, net income method, price-earnings ratio method, outstanding shares method

outstanding shares method=

number of shares outstanding x stock price

what does market segmentation allow firms to do?

operate with limited resources because mass production, mass distribution, and mass advertising are not requires

annual objectives establish ____, _______ and ____ priorities

organizational, divisional, departamental

reengineering is also known as

process management, process innovation, process redesign

marketing mix components

product, price, place, promotion

reengieering

reconfiguring and redesigning work, jobs, and processes for the purpose of improving cost, quality, service and speed

restructuring

reduce size of firm in terms of number of employees, number of divisions/ unites, number of hierarchical levels in firm's organizational structure

advantage is when the company has superiority in:

resources, skills, or position

reasons against CSR

restricts free market goal of profit maximization, business is not equipped to handle social activities, dilutes the primary aim of business, increase business power, limits the ability to compete in a global market place

product positioning

schematic representations reflecting how your products or services compare to competitors

advantages of functional structure

simple and inexpensive, capitalizes on specialization of business activities, minimize need for elaborate control systems, allows for rapid decision making

Policy (capital P)

specific guidelines, methods, procedures, rules, forms, and administrative practices established to support and encourage work towards stated goals

annual objectives are essential for keeping:

strategic plans on track

advantage

strategies must provide for creation or maintenance of competitive advantage

cosnistency

strategies should not present inconsistent goals and policies

consonance

strategies should represent an adaptive response to external trends

organizational barriers to change

structural inertia, work group inertia, threats of existing balances of power, previously unsuccessful change efforts

market segmentation

subdividing market into distinct subsets of customers according to needs and buying habits

situations which may require management policy:

use one or more suppliers, centralize or decentralize employee training, promote on basis of merit or seniority, offer numerous or few employee benefits, how to discourage sexual harassment and insider training

what do policies clarify?

what can and cannot be done in pursuit of organization's objectives

what does the QSPM objectively idnciate?

which alternative strategies are best

examples of ethical issues

whistle blowing, bribery (US foreign corrupt practices act), work place romance