Management Test #1
Chaplin Mask and monkey business videos
-Chaplin Mask: example of bounded rationality (cognitive limitations that strain our decision making processes) and top-down processing (brain makes decisions on its own) In the monkey experiment - our intense focus on counting causes us to disregard other information.-> look @ the big picture -Intense focus and concentration causes us miss unexpected information. -Ambiguous Information can be a source of incomplete information: -->Information that can be interpreted in multiple and often conflicting ways
strengths/weaknesses of sharing economy?
-Ms. Guidry drives her own car around boston picking strangers up via Uber and other apps -The app allows people to connect services with sellers and she is the microentrepreneur. Of course this brings opportunities and strength in a sharing economy. Although at the same time it is very up in the air and can be risky - Good deal for consumers as well as investors, can run a company with no salary cost - Although for the worker they don't receive any benefits, no consistent salary, no insurance, can't challenge companies decisions on terms - The pay is good, it is convenient for the worker. But from an economical standpoint and from an insurance perspective it doesn't make sense (car crashes, insurance, the employer usually doesn't back you up) - the online marketplace, made possible by the technology may erode work compensation in the long term - Nothing that you can rely on as a worker in the long run
why might low self-esteem be problematic in terms of work success?
-Persons with low self esteem have poor opinions of themselves and their abilities -persons with low self esteem might not work as hard if they don't feel like they are reaching expectations and do not feel like they have a meaningful responsibility
What was the significance of the Marshmallow experiment?
-kids who delayed eating the marshmallow later had higher SAT scores, had a higher level of education and were healthier -people who have an internal locus of control believe they themselves are responsible for their own fate; see their own actions and behaviors as being major and decisive determinants of important outcomes -Conscientiousness: tendency to be careful and preserving
business level strategies
-low cost -differentiation strategy -focused low cost strategy
According to Oldham and Hackman's model, what are the sources of job satisfaction?
-skill variety, task variety, task significance + meaningfulness → work motivation **autonomy + responsibility → growth satisfaction and general satisfaction -feedback from job + knowledge of results → work effectiveness
SWOT for kindle
-strengths: amazon is trusted, specifically for reading - you can access many books, media consumption -weakness: limited selection of apps, browser doesn't come with bookmark or history, known to delete books which gives bad rap and kills future sales -opportunities: parents want to buy something for their kids to read, not to play games on like the iPad. The price is also cheaper than the iPad, widespread use of WiFi, and more educational -threats: new way of using a device (people want consistent devices such as Apple), and the iPad (apple has a younger demographic)
What are some of the general shifts in youth attitudes towards life, work?
-the great recession was a wakeup call for youths, causing young people to be more interested in conserving resources and more concerned about others -wanted job where they could make a significant amount of money and showed less of an interest in luxury items
challenges for management in a global environment
1. building a competitive advantage 2. maintaing ethical standards 3. managing a diverse workforce 4. utilizing new information systems and technologies
what are the 3 skills of management?
1. conceptual 2. human 3. technical
five forces model
1. level of rivalry 2. potential for entry 3. power of suppliers 4. power of buyers 5. threat of substitutes
three stages of the planning process, levels, and time horizons?
1. mission statement 2. planning 3. strategy
what are the major tasks of management?
1. planning 2. organizing 3. leading 4. controlling
decision making model
1. recognize need for a decision: sparked by an event such as environment changes, may also be proactive, managers must first realize that a decision must be made 2. generate alternatives: managers must develop feasible alternative courses of action, if good alternatives are missed the resulting decision is poor, it is hard to develop creative alternatives so managers need to look for new ideas 3. assess alternatives: what are the advantages and disadvantages of each alternative? managers should specify criteria, then evaluate (legal, ethical, economical, practical) 4. choose among alternatives: rank the various alternatives and make a decision (tendency is for managers to ignore critical information, even when available) 5. implement the chosen alternative: managers must now carry out the alternative (often a decision is made and not implemented) 6. learn from feedback: compare what happened to what was expected to happen, explore why any expectations for the decision were not met, derive guidelines that will help in future decision making
strategy
A cluster of decisions about what goals to pursue, what actions to take, and how to use resources to achieve goals.
administrative model of decision making (development)
An approach to decision-making that explains why decision making is inherently uncertain and risky and why managers usually make satisfactory rather than optimum decisions → James March and Herbert Simon disagreed with the underlying assumptions of the classical model of decision making. In contrast, they proposed that managers in the real world do not have access to all the information they need to make a decision. They pointed out that even if all information were readily available, many managers would lack the mental or psychological ability to absorb and evaluate it correctly - As a result, they developed the administrative model of decision making to explain why decision making is always an inherently uncertain and risky process - and why managers can rarely make decisions in the manner by the classical model. - bounded rationality, incomplete information, risk and uncertainty
"stuck in the middle"
Attempting to simultaneously pursue both a low cost strategy and a differentiation strategy - Difficult to achieve low cost with the added costs of differentiation
example of 5 forces - airline industry
Bad/worst industry to be in. None of the factors are benign. - Suppliers are powerful -> pressure on airlines- Gates, aircraft, GE, Airbus makes a lot more money. Labor is unionized -> - Buyers: Buy cheapest ticket. Price sensitive -Threat of entry: low barriers to entry, you can rent a plane, lease a gate -Rivalry: Intense and on price - Substitutes: Use a car or train, much less expensive
planning
Choose appropriate goals and courses of action. Process of identifying and selecting appropriate goals and courses of action a. Deciding which goals to pursue b. Deciding what strategies to adopt and attain those goals c. Deciding how to allocate organizational resources example: - Michael Dell, CEO of Dell, entered the PC market with apple and others - Goal: make an inexpensive computer to compete with other companies - How to Obtain: Use inexpensive materials, build the computers himself, bypass the stores and sell directly - Resources: Only had $5,000
organizations
Collections of people who work together and coordinate their actions to achieve a wide variety of goals.
level of rivalry
Degree of competition for customers tends to drive down profits -> increased competition results in lower prices - ex. overabundance of restaurants in boulder - Competition leads to lowering of prices and more advertising examples: just look in a supermarket for this. Level of rivalry is high in the t shirt business, in the car business, in the supermarket business. (Restaurants (most cut costs, etc...)
controlling
Establish accurate measuring and monitoring systems to evaluate how well the organization has met its goals example: - Dell lacked experience with this, especially with rapid growth that they saw. Had computers catching fire, very high costs. Lead him to hire experienced managers from other companies. Turned around fine and was competing with other companies again after they were able to control the efficiency and effectiveness of the company
organizing
Establish task and authority relationships. - Structuring working relationships in a way that allows organizational members to work together to achieve organizational goals. - Resources to achieve goals.
What are some examples of intuitive decision making, of reasoned judgment?
Example 1: John Gottman, a well-known marital expert, describes how within an hour of observing a couple, he can gather with 95% accuracy if the couple will be together within 15 years. His accuracy goes down to 90% if he observes the couples for 15 minutes, supporting the phenomenon of thin-slicing. (judgment) Example 2: Many other uses of thin-slicing are implied and seen throughout the media such as firemen making split-second decisions, or cops knowing something is wrong by simply a gut feeling. All these imply and show that thin-slicing actually occurs and is a fact of life that actually occurs within everyone. "the ability of our unconscious to find patterns in situations and people based on very narrow 'slices' of experience." (intuition)
main points from Dan Ariely video
Main point: if we could understand cognitive limitations, we could design a better world
leading
Motivate, coordinate, and energize individuals example: - Michael Dell... employees responded well to his hands on leadership style which resulted in a hardworking, committed workforce
skill variety
The degree to which a job requires various activities, requiring the worker to develop a variety of skills and talents -Jobholders can experience more meaningfulness in jobs that require several different skills and abilities than when the jobs are elementary and routine
task significance
The degree to which the job impacts other people's life. -The influence can be either in the immediate organization or in the external environment -Employees feel more meaningfulness in a job that substantially improves either psychological or physical well-being of others than a job that has limited impact on anyone else
autonomy
The degree to which the job provides the employee with significant freedom, independence, and discretion to plan out the work and determine the procedures in the job -For jobs with a high level of autonomy, the outcomes of the work depend on the workers' own efforts, initiatives, and decisions; rather than on the instructions from a manager or a manual of job procedures ->In such cases, the jobholders experience greater personal responsibility for their own successes and failures at work
are different skills used at different levels of management?
YES - organizations group managers into departments on the basis of their job specific skills - inside each department, a managerial hierarchy of first-line managers, middle managers, top managers, and CEO emerges - effective managers need all three kinds of skills - conceptual, human, and technical - to help their organizations perform more efficiently and effectively. the absence of even one type of managerial skill can lead to failure -managers are grouped into different departments because a major part of a manager's responsibility is to monitor, train, and supervise employees so their job-specific skills and expertise increase → this is easier to do when employees with similar skills are grouped into the same department because they can learn from one another and become more skilled and productive at their particular job
self managed teams
a group of employees who assume collective responsibility for organizing, controlling, and supervising their own work activities
entrepreneur
an individual who notices opportunities and decides how to mobilize the resources necessary to produce new and improved goods and services characteristics: openness to experience, have an internal locus of control, high level of self- esteem and a high need for achievement
Weber
bureaucracy - a formal system of organization and administration designed to ensure efficiency and effectiveness - power and authority five principles: 1. a manager's formal authority derives from the position he or she hold in the organization 2. people should occupy positions because of their performance, not because of their social standing or personal contacts 3. the extent of each position's formal authority and their responsibilities, and their relationships to other positions in an organization, should be clearly specified 4. authority can be exercised effectively in an organization when positions are arranged hierarchically, so employees know whom to report to and who reports to them 5. managers must create a well-defined system of rules, standard operating procedures, and norms so that they can effectively control behavior within an organization
strategy
cluster of decisions about what goals to pursue, what actions to take, and how to use resources to achieve goals
what are an organizations mission and goals?
defining the business: 1. who are our customers? 2. what customer needs are being satisfied? 3. how are we satisfying customer needs? establishing major goals: - provides the organization with a sense of directions - stretches the organization to higher levels of performance - goals must be challenging but realistic, with a definite period in which they are to be achieved
conceptual skills
demonstrated in the general ability to analyze and diagnose a situation and to distinguish between cause and effect - top managers require the best conceptual skills because their primary responsibilities are planning and organizing - formal education and training are important in helping managers develop conceptual skills
differentiation strategy
distinguishing an organization's products from the products of competitors on dimensions such as product design, quality, of after-sale - Being different on a dimension that is important to customers ex. McGuckins vs. Home Depot (McGuckins is higher priced, but differentiates itself with service)
low cost strategy
drive the organization's total costs down below the total costs of rivals ex. walmart and Southwest - Usually this can occur in production or manufacturing - Economies of scale are used...margins are low, but sales are high
incomplete information
even if managers had unlimited ability to evaluate information, they still would not be able to arrive at the optimum decision because they would have incomplete information. information is incomplete because of risk and uncertainty, ambiguity, and time constraints
What are the conclusions about worker job satisfaction from the article "U. S. Workers Can't Get..."
fewer than half of american workers were satisfied with their jobs
planning
identifying and selecting appropriate goals and courses of action for an organization
power of buyers
if there are only a few large buyers, they can bargain down prices -> Big, powerful buyers or buyers group can bargain prices down particularly when they buy in volume - The Federal government buys weapons. They can bargain the prices down - Big box stores, like Walmart, buy a lot and have significant buying power. (Walmart: only customers for many products)
power of suppliers
if there are only a few large suppliers, they can drive up the prices - For example, when Microsoft had a near monopoly on operating systems, they would cut profitability out of PC sellers -Labor unions can control the supply of labor, and increase labor costs. (Microsoft and up prices for Dell)
human skills
include the general ability to understand, alter, lead, and control the behavior of other individuals and groups. - The ability to communicate, to coordinate, and to motivate people, and mold individuals into a cohesive team distinguishes effective from ineffective managers - human skills can be learned through education and training, as well as be developed through experience - thorough and direct feedback allows managers to develop their human skills
outsourcing
involves contracting with another company, usually in a low cost country abroad, to have it perform a work activity the organization previously performed itself, such as manufacturing, marketing, or customer service. Increases efficiency because it lowers operating costs, freeing up money and resources that can be used in more effective ways - for example, developing new products
restructuring
involves simplifying, shrinking, or downsizing an organization's operations to lower operating costs. This can be done by eliminating product teams, shrinking departments, and reducing levels in hierarchy, all of which result in the loss of large numbers of jobs of top, middle, or first-line managers, as well as nonmanagerial employees
SWOT analysis
is a planning exercise in which managers identify internal organization strengths (S) and weaknesses (W), and external environmental opportunities (O) and threats (T). - Based on a SWOT analysis, managers at the different levels of the organization select the corporate, business, and functional strategies to best position the organization to achieve its mission and goals. example: strengths (superior marketing skills) weakness (outdated production facilities) opportunities (entry into new related markets) threats (increased competition)
technical skills
job specific skills required to perform a particular type of work or occupation at a high level - ex. IT skills (information technology) - managers need a range of technical skills to be effective - the array of technical skills managers need depend on their position in their organization
classical model (decision making)
list all alternative courses of actions and consequences, rank alternatives, and select the best alternative - assumes that all information is known and mental capacity is infinite
what managerial task was depicted in the Google film?
organizing
threat of substitutes
performs the same or a similar function as an industry's product by a different means -> more available substitutes tend to drive down prices and profits - Videoconferencing is a substitute for travel, plastic is a substitute for aluminum - Substitutes are always present but they are easy to overlook because they may appear to be very different from the industry's product. (Hyatt vs. Air B&B)
decision fatigue
refers to the idea that people tend to make worse decisions after having made a lot of decisions. if you "flex" your decision muscle too much, it will fail you. -the more choices you make throughout the day, the harder each one becomes for your brain, and eventually, it looks for shortcuts -no matter how rational and high minded one may try to be, one can't make a decision without paying a biological price -helps explain why ordinary, sensible people get angry at colleagues and families, splurge on clothes, buy junk food, etc.
focused low cost strategy
serving only one segment of the overall market and trying to be the lowest cost organization serving that segment EX). Papa Murphys: targets low incomes families
sharing economy
socio-economic system built around the sharing of human and physical resources. Shakes up corporate level strategy as it challenges mainstream business in many sectors - he sharing economy (sometimes also referred to as the peer-to-peer economy, mesh, collaborative economy, collaborative consumption)
agreeableness
tendency to get along well with others - managers high in this are likable, affectionate and care about others - managers low in this may be distrustful, unsympathetic, uncooperative and antagonistic
building a competitive advantage
the ability of one organization to outperform other organizations because it produces desired goods or services more efficiently and effectively than its competitors. The four building blocks of competitive advantage are superior efficiency, quality, innovation, and responsiveness to customers innovation: the process of creating new or improved goods and services that customers want or developing better ways to produce or provide goods and services, poses a special challenge.
insourcing
there are other areas in which companies that depend on a reliable supply of high-quality components and finished products have experiences problems with outsourcing production abroad, and many companies have or are in the process of moving back production to the US
bounded rationality
to describe the situation in which the number of alternatives a manager must identify is so great and the amount of information so vast that it is difficult for the manager to even come close to evaluating it all before making a decision. → human decision making capabilities are bounded by people's cognitive limitations = limitations in their ability to interpret, process, and act on information
feeling types
use mental evaluations and emotional reactions, and see things as good or bad
Hawthorne Effect
worker's productivity is affected more by observation or attention received than by physical work setting. - The Hawthorne effect - seemed to suggest that the attitudes of workers toward their managers affect the level of workers' performance → a manager's behavior or leadership approach can affect performance - if supervisors could be trained to behave in ways that would elicit cooperative behavior from their subordinates, then productivity could be increased. → led to human relations movement
task identity
The degree to which the job requires the jobholders to identify and complete a workpiece with a visible outcome -Workers experience more meaningfulness in a job when they are involved in the entire process rather than just being responsible for a part of the work
What is the significance of efficiency and effectiveness in business and how do they impact performance?
The more effective and efficient use an organization can make of resources, the greater the relative well-being of people.
managers
The people responsible for supervising the use of an organization's resources to meet its goals - Resources include people, skills, know-how, machinery, raw materials, computer and IT, and financial capital - First line, middle line, top managers, and then CEO
management
The planning, organizing, leading, and controlling of human and other resources to achieve organizational goals effectively and efficiently
potential for entry
When a company can easily enter a market. -> easy entry leads to lower prices and profit - For example, Starbucks has threat of entry coffee shops that want to enter this market. They need to continuously innovate to remain competitive - Barriers to entry are advantages that incumbents may have relative to newcomers - Barriers to entry: supply-side economy of scale, capital requirements to enter the market (pharmaceuticals), government policy restricts entry (taxi, liquor).
empowerment
a management technique that involves giving employees more authority and responsibility over how they perform their work activities
efficiency
a measure of how well or productively resources are used to achieve a goal
job enrichment theory
is an attempt to motivate employees by giving them the opportunity to use the range of their abilities -skill variety -task identity -task significance -autonomy -feedback
stack ranking
is an employee evaluation method that slots a certain percentage of employees into each of several levels of performance - makes the assumption that the performance of wooers fall along a bell curve - employees at Microsoft didn't enjoy it - it led to backstabbing coworkers - reward the excellent and weed out the weak
maintaing ethical standards
managers at all levels are under considerable pressure to make the best use of resources to increase the level at which their organizations perform - too much pressure to perform can be harmful. It may induce managers to behave unethically, and even illegally, when dealing with people and groups inside and outside the organization.
conscientiousness
tendency to be careful, scrupulous and preserving ex. marshmallow experiment -managers high in this trait are organized and self- disciplined -managers low in this trait lack direction and self- discipline
team decision making
*advantages: -the performance of a team is better than the simple, arithmetic average of the group -teams also perform better than the best team member (for demonstrable tasks) -their choices of alternatives are less likely to fall victim to the biases and errors -able to draw on combined skills and knowledge of group members to generate good alternatives and make good decisions -probability that the decision will be implements successfully increases *disadvantages: ->however, groups are also more overconfident than individuals -groups often take much linger than individuals to make decisions -getting 2 or more managers to agree to the same solution can be difficult - group decision making can be undermined by biases
administrative model
*bounded rationality - cognitive limitations constrain ability to interpret, process, and make decisions. *incomplete information - uncertainty, ambiguous information, time constraints *satisficing - choose an acceptable response rather than the best decision
determining organization's mission/goals
*corporate level strategy: what industries will be in? big picture decisions - manages the growth and development of an org so as to maximize its long run ability to create value *business level strategy: rival competitors in market and how do we address them? - plan of action to take advantage of favorable opportunities and find ways to counter threats so as to compete effectively in an industry *functional level strategy: execute tasks for divisions to get things done, very tactical - a plan of action to improve the ability of an organization's departments to create value
2 ways we make decisions
*intuition - feelings, beliefs, and hunches that come readily to mind, require little effort and information gathering and result in on-the-spot decisions -> often used in response to non-programmed decisions *judgment - decisions that take time and effort to make from careful information gathering, generation of alternatives, and evaluation of alternatives
programmed vs. unprogrammed decisions
*programmed decision: Routine, virtually automatic decision making that follows established rules or guidelines -Managers have made the same decision many times before -There are rules or guidelines to follow based on experience with past decisions -Little ambiguity involved. *unprogrammed decision: Non-routine decision making that occurs in response to unusual, unpredictable opportunities and threats -Intuition: Often used in response to nonprogrammer decisions -Reasoned judgments: Well thought out decision that requires careful information gathering, generation of alternatives, and evaluation of alternatives In non-programmed decisions, you have more chance of error whether you are using judgment or the unconscious
methods to overcome disadvantages (team decision making)
*watch out for groupthink (members strive for agreement among themselves at the expense of accurately assessing information relevant to a decision) *devils advocacy (critical analysis of a perfreerd alternative, made in response to challenges raise by a group member who, playing the role of devil's advocate, defends unpopular or opposing alternatives for the sake of the argument) → decsion makers can be made aware of the possible dangers of recommended courses of action **diversity among decision makers: another way to improve group decision making is to promote diversity in decision-making groups. → broadens the range of life experiences and opinions that group members can draw on as they generate, assess, and choose among alternatives → diverse groups are sometimes less prone to groupthink because group members already differ from each other and thus are less subject to pressures for uniformity
example of 5 force - movie theater industry
- Bargaining Power of Supplier: A problem as movie distributors and producers control the flow -Threat of Substitue products or services: Very high with videos, Amazon movies, Netflix
what kind of competitive threat might an upstart 'sharing economy' business pose for an established, traditional business?
- degree of competition for customers tends to drive down profits - good example are the overabundance of restaurants in Boulder. Competition leads to lowering of prices and more advertising the strongest competitive force is the most important to strategy formulation
job satisfaction
-A collection of feelings and beliefs that managers have about their current jobs -Managers high on job satisfaction like their jobs, feel that they are being fairly treated, adn believe that their jobs have many desirable features. causes of job satisfaction: - work itself: skill variety, task identity, task significance, job feedback, autonomy - How you feel about work: is it meaningful, do you have responsibility, can you see knowledge of results - Pay: not correlated after individual reaches a level of comfortable living
How does a no-tipping policy impact job satisfaction attitudes? What are the pros and cons of such a policy?
-they know they will come home with $$ every night so there is more security -restaurants who don't tip say employees are more satisfied and that service has actually improved -pros: it eliminates stress on customers to tip -cons: wage increases are bound to translate to higher menu prices
mission statement
A broad declaration of an organization's purpose that identifies the organization's products and customers and distinguishes the organization from its competitors - functional level: executes tasks - functional area: different areas that are support functions (marketing, finance, etc) - time horizon of plans: intended duration of a plan. long term = 5 years or more, intermediate term = 1-5 years (corporate and business level goals and strategies), short term = 1 year - defining the business: who are our customers? what customer needs are being satisfied? how are we satisfying our customer needs? - alignment: goals must align with the mission of the company
Human Relations Movement (Mayo)
A management approach that advocates the idea that supervisors should receive behavioral training to manage subordinates in ways that elicit their cooperation and increase their productivity - (refers to the researchers of organizational development who study the behaviour of people in groups, in particular workplace groups) - originated from the Hawthorne studies
Myers Briggs Framework
Most widely used personality-assessment instrument in the world -Individuals are classified as extroverted or introverted (E or I), sensing or intuitive (S or N), thinking or feeling (T or F), and judging or perceiving (J or P) -Classifications combined into 16 personality types (ex: INTJ or ESTJ) 1. introverts tend to be inward focused, work better alone, have more self initiative, but need quiet time for concentration 2. extroverts have a greater interest in the outer world, a need to join in and interact with others, and enjoy noise and activity 3. sensing persons use all five senses, have a present orientation and practical interest, prefer order, stady work, and established routine 4. intuiting persons are future oriented, inspire others with ideas, and work in bursts of energy 5. thinking persons use logic and analytical processes, search for correct answer, and are uninterested in other people's feelings 6. feeling individuals focus on personal values, use mental evaluations and emotional reactions, and see things as good or bad 7. judgers tend to make mind up quickly and live in an orderly, structured world 8. perceivers are more open minded and live in a flexible way. They seek to understand rather than control the world
feedback
The degree to which the worker is provided with clear, specific, detailed, actionable information about the effectiveness of his or her job performance -When workers receive clear, actionable information about their work performance, they have better overall knowledge of the impact of their work activities, and what specific actions they need to take (if any) to improve their productivity.
what are some of the recent changes in management practices and challenges for management in a global environment?
To utilize IT to increase efficiency and effectiveness, CEOs and top management teams have been restructuring organizations and outsourcing specific organizational activities to reduce the number of employees on the payroll and make more productive use of the remaining workforce. - restructuring - outsourcing - insourcing the second principal way managers have sought to increase efficiency and effectiveness is by empowering lower-level employees and moving to self-managed teams - empowerment - self managed teams
managing a diverse workforce
a major challenge for managers everywhere is to recognize the ethical need and legal requirement to treat human resources fairly and equitably. Today, the age, gender, race, ethnicity, religion, sexual preference, and socioeconomic composition of the workforce presents new challenges for managers. - to create a highly trained and motivated workforce, as well as to avoid lawsuits, managers must establish human resource management (HRM) procedures and practices that are legal and fair and do not discriminate against any organizational members - managers must recognize the performance-enhancing possibilities of a diverse workforce, such as the ability to take advantage of the skills and experiences of different kinds of people
organizational performance
a measure of how efficiently and effectively managers use organizational resources to satisfy customers and achieve organizational goals
effectiveness
a measure of the appropriateness of the goals in an organization is pursuing and the degree to which the organization achieves those goals
utilizing new information systems and technologies
another important challenge for managers is to continually utilize and effective new IT that can link and enable managers and employees to better perform their jobs - new kinds of IT enable not just individual employees but also self-managed teams by giving them important information and allowing virtual interactions around the globe using the internet - Increased global coordination helps improve quality and increase the pace of innovation - use of IT also helps build a competitive advantage
vertical integration
is a corporate level strategy in which a company expands its business operations either backward into a new industry that produces inputs for the company's products (backward vertical integration) or forward into a new industry that uses, distributes, or sells the company's products (forward vertical integration) → the combination in one company of two or more stages of production normally operated by separate companies. examples: backward vertical integration - a steel company that buys iron ore mines and enters the raw materials industry to supply the ore needed to make steel examples: forward vertical integration - Apple's decision to open its own stores to make its unique products more accessible to customers who could try tem out before they bought them
core competency
is often used to refer to the specific set of department skills, knowledge, and experience that allows one organization to outperform its competitors → department skills that create a core competency give an organization a competitive advantage
diversification
is the corporate level strategy of expanding a company's business operations into a new industry in order to produce new kinds of valuable goods or services - Example: PepsiCo's diversification into the snack food business with the purchase of Frito Lay *related diversification - is the strategy of entering a new business or industry to create a competitive advantage in one or more of an organization's divisions or business *synergy - obtained when the value created by two divisions cooperating is greater than the value that would be created if the two divisions operated separately and independently *unrelated diversification - managers pursue unrelated diversification when they establish divisions or buy companies in new industries that are not linked in any way to their current business or industries
risk and uncertainty
risk is present when managers know the possible outcomes of a particular course of action and can assign probabilities to them. -uncertainty exists when the probabilities of alternative outcomes cannot be determined and future outcomes are unknown. the probability of a given outcome occurring is not known, so managers have little information to use in making a decision
Frederick Taylor & scientific management
scientific management - the systematic study of relationships between people and tasks for the purpose of redesigning the work process to increase efficiency - scientific management: the systematic study of relationships between people and tasks for the purpose of redesigning the work process to increase efficiency. - taylor believed that if the amount of time/effort that each worker expends to produce a unit of output (a finished good or service) can be reduced by increasing specialization and the division of labor, the production process will become more efficient. - most efficient division of labor could best be determined by using scientific management techniques
openness to experience
tendency to be original, have broad interests, be open to a wide range of stimuli, be daring and take risks
negative affectivity
tendency to experience negative emotions and moods, feel distressed, and be critical of oneself and others ex. Bezos
extraversion
tendency to experience positive emotions and moods and feel good about oneself and the rest of the world -Managers high in extraversion tend to be sociable, affectionate, outgoing and friendly -Managers low in extraversion tend to be less inclined toward social interaction and have a less positive outlook
internal locus of control
tendency to locate responsibility for one's fate within oneself -own actions and behaviors are major and decisive determinants of job outcomes
international expansion
to what extent should the organization customize features of its products and marketing campaign to different national conditions? *global strategy- if managers decide that their organization should sell the same standardized product in each national market in which it competes, and they use the same basic marketing approach *multidomestic strategy - if managers decide to customize products and marketing strategies to specific national conditions *licensing - a company (the licensor) allows a foreign organization (the licensee) to take charge of both manufacturing and distributing one or more of its products in the licensee's country or world region in return for a negotiated fee *franchising - a company (the franchiser) sells to a foreign organization (the franchisee) the rights to use its brand name and operating know-how in return for a lump sum payment and share of the franchiser's profits *strategic alliance - managers pool or share their organization's resources and know-how with those of a foreign company, and the two organizations share the rewards or risks of starting a new venture in a foreign country *joint venture - a strategic alliance among two or more companies that agree to jointly establish and share the ownership of a new business *wholly owned foreign subsidiary - they invest in establishing production operations in a foreign country independent of any local direct involvement
