MGMT Test Two

trade agreements

-General Agreement on Tariffs and Trade: agreement to regulate trade among 124 countries, the purpose of which was "substantial reduction of tariffs and other trade barriers and the elimination of preferences" -World Trade Organization: administers trade agreements, provides a forum for trade negotiations, handles trade disputes, monitors national trade policies, and offers technical assistance and training for developing countries for its 155 member countries member countries - rulings final -regional trading zones: zones in which tariff and non-tariff barriers are reduced or eliminated for countries within the trading zone 1. Maastricht Treaty: combined economies/markets in 27 countries of European Union into one with a single currency 2. North American Free Trade Agreement(NAFTA): US, Canada, Mexico; eliminated most product tariffs and prevent 3 countries from increasing existing tariffs or making new ones 3. CAFTA-DR: US, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and DR 4. Union of South America (UNASUR): aims to create a unified South America by permitting free movement between nations, creating a common infrastructure that includes an interoceanic highway, and establishing the region as a single market by eliminating all tariffs by 2019 5. Association of Southeast Asian Nations(ASEAN): two largest & most important regional trading groups in Asia 6. Asia-Pacific Economic Cooperation -reduce prices for consumers - we don't care where our products come from

plans that work - 3. develop effective action plans

-action plan: lists specific steps (how), people(who), resources (what), and time period (when) for accomplishing a goal

organizational authority component of traditional organizational structure

-authority: right to give commands, take action, and make decisions to achieve organizational objectives -chain of command: vertical line of authority that clarifies who reports to whom throughout the organization -unity of command: management principle that workers should report to just one boss (matrix violates this) - to prevent confusion from conflicting commands -delegation of authority: assignment of direct authority and responsibility to a subordinate to complete tasks for which the manager is normally responsible (give them responsibility and authority, receive accountability)(can lead to micromanaging)

plans that work - 5. maintain flexibility

-because action plans sometimes poorly conceived and goals sometimes not achievable; methods 1. options-based planning: keep options open by making small, simultaneous investments in many alternative plans - increase investments in ones that come back as likely winners -keep slack resources: cushion of extra resources that can be used to adapt to unanticipated change, problems, or opportunities -keep your options open + slack resources = flexible 2. learning-based approach: assumes action plan needs to be continually tested, changed, and improved as companies learn better ways of achieving goals -ex. adjusting for baby boomer's preferences

Boston Consulting Group (BCG) matrix

-best known portfolio strategy for unrelated diversification; categorizes corporations businesses by growth rate and relative market share, helps managers decide how to invest corporate funds 1. stars = large share, fast-growing market; corporation should invest heavily - usually pays off 2. question marks = small share in fast-growing market; more risky b/c of little share but potential to become stars 3. cash cows = large share of slow-growing market; highly profitable 4. dogs = small share in slow market; not profitable -invest money from cash cows into stars -stars can turn in to cash cows as the market growth slows -some cash flows from cash cows to question marks -some question marks can become stars -dogs either sold or closed down and liquidated for their assets

managing organizational change

-change forces: lead to differences in forms, quality, or condition of an organization over time vs. resistance forces: support the status quo or existing conditions in an organization -resistance to change: opposition to change resulting from self-interest, misunderstanding and distrust, or a general intolerance for change -process: 1. unfreezing: getting the people affected by the change to believe the change is needed -resistance to change = frozen behavior 2. change intervention: workers and managers change their behavior and work practices 3. refreezing: supporting or reinforcing the new changes so they stick

strategy making process - 3. choosing strategic alternatives

-choose alternatives that will help company create or maintain a sustainable competitive advantage -strategic reference point theory

how to strengthen a jobs core characteristics from the JCM

-combining tasks: increases skill variety and task identity by joining separate, specialized tasks into larger work modules -natural work units: arranging tasks according to logical or meaningful groups -establishing client relationships: increases skill variety, autonomy, and feedback by giving employees direct contact with clients and customers -vertical loading: pushing some managerial authority down to workers -opening feedback channels: finding additional ways to give employees direct, frequent feedback about their job performance

rational decision making - 2. identify decision criteria

-decision criteria: standards used to guide judgements and decisions - meet more criteria = better solution (ex. low price, reliabiliti

rational decision making

-decision making: process of choosing a solution from available alternatives -rational decision making: systematic process in which managers define problems, evaluate alternatives, and choose optimal solutions that provide maximum benefits to their organizations -rational decision making process 1. define the problem 2. identify decision criteria 3. weight the criteria 4. generate alternative courses of action 5. evaluate each alternative 6. compute the optimal decision Please Call Willy After Entering Office

Porter's 5 Industry Forces

-determine an industry's overall attractiveness and potential for long-term profitability, stronger the forces = less attractive the industry b/c more difficult to make profitable 1. character of the rivalry: measure of intensity of competitive behavior between companies in an industry -ex. is it cutthroat? 2. threat of new entrants: measure of the degree to which barriers to entry make it easy or difficult for new companies to get started in an industry 3. threat of substitute products or services: measure of ease with which customers can find substitutes for an industry's products or services 4. bargaining power of suppliers: measure of the influence that suppliers of parts, materials, and services to firms in an industry have on the prices of these inputs -many suppliers = low prices, vice versa 5. the bargaining power of buyers: measure of the influence that customers have on the firm's prices -popular product = more influence -dependent on few, high volume buyers = price taker

middle level management planning

-developing and carrying out tactical plans to accomplish the organizations strategic objective -tactical plans: specify how the company will use resources, budgets, and people over the next six months to two years to accomplish specific goals within its mission -Management by Objectives (MBO): management technique often used to develop and carry out tactical plans

strategy-making process - 1. assess the need for strategic change

-do we need to change our strategy to obtain a sustainable competitive advantage? -hard to do due to great deal of uncertainty in business environments -top managers often slow to recognize need - competitive inertia: reluctance to change strategies or competitive practices that have been successful in the past -to become more timely and accurate with recognition - look for signs of strategic dissonance (discrepancy between a company's intended strategy and the strategic actions managers take when implementing that strategy)- is not the same as when a strategy doesn't produce - just show that it is out of date and needs changing

limits to rational decision making

-doubtful rational decision making can always help managers choose optimal solutions and maximize their benefits - that can only be in a perfect world -describes the way decisions SHOULD be made -in real world we face time, expertise, and cost restraints -bounded rationality: how managers actually make decisions - rational approach to decision making but are restricted by real-world constraints, incomplete and imperfect information, and their own limited decision-making capabilities -theoretically: picking maximal/optimal solution -most actually just satisfice: choose a good enough alternative

managing resistance to change

-education and communication: when resistance based on incorrect or misleading information and communicated change-related info to them -participation: allow those affected to participate in planning and implementing the change process - better understanding of the need -negotiation: discuss and agree on who will do what after the change occurs -top-management support: more than just talk about the change, provide resources, training and autonomy needed to make it happen -coercion: use of formal power and authority to force others to change - only in crisis or last ditch effort because tends to invoke fear, resentment, stress, etc.

drawbacks of portfolio strategy

-evidence shows acquiring unrelated businesses is not useful (u-shape relationship between diversification and risk) -BCG matrix yields incorrect judgments about a company's potential; don't accurately determine the categories (most common = highly profitable categories as dogs) -BCG matrix relies of past performance: notoriously bad indicator of future performance -BCG matrix can weaken the strongest performer, cash cow, as funds are redirected -classifying as cash cows weakens the worker performance because they feel like they are working just to fund stars and question marks

managing innovation during discontinuous change - experiential approach

-experiential approach: assumes innovation is occurring within a highly uncertain environment and that the key to fast product innovation is to use intuition, flexible options, and hands-on experience to reduce uncertainty, accelerate learning and understanding; -goals: significant performance improvements or new dominant design -5 aspects: 1. design iteration: cycle of repetition in which a company tests a prototype (working model tested for design, function, and reliability) of a new product or service, improves on the design, and then builds and tests the improved product or service prototype 2. testing: systematic comparison of different product designs or design iterations 3. milestones: formal project review points used to assess progress and performance - structure to chaos of technological discontinuities, builds momentum, sense of urgency 4. multifunctional teams: work teams composed of people from different departments - accelerate learning and understanding by mixing and integrating technical, marketing, and manufacturing activities - speed innovation 5. powerful leaders: provide vision, discipline, motivation to keep innovation process focused, on time, and on target - get resources, more experienced, high status in company, directly responsible for product's success or failure

groupthink likely to occur when

-group insulated from others with different perspectives -group leader begins by expressing a strong preference for a particular solution -group has no established procedure for systematically defining problems and exploring alternatives -group members have similar backgrounds and experiences

disadvantages of group decision making

-groupthink: occurs in highly cohesive groups; barrier to good decision making caused by pressure within the group for members to agree with each other (just want to approve the proposed solution) -more time consuming - not on topic, members unprepared -one or two people can dominate group discussion and limit the group's consideration of different problem definitions and alternative solutions -members don't feel the same accountability as with personal decisions

plans that work - 2. develop commitment

-if employees don't care, they won't work harder, smarter, etc. -goal commitment: determination to achieve a goal (not automatic, we must choose to do so) -popular to set goals participatively - managers and employees choose goals together rather than managers just assigning -with employee's help: more likely to be realistic and attainable -also helpful to make goal public -also helpful to get top management's support (funding, speaking about it, participating, etc.)

benefits of planning (advantages)

-intensified effort: put forth greater effort when following a plan (ex. do your best vs. improve sales by 2%/month) -persistence: working hard for long periods -direction: direct persistent and intensified efforts towards activities that help accomplish their goals -creation of task strategies: think of better ways to do their jobs -proven to work for companies and individuals

managing sources of innovation

-jumpstart innovation by building creative work environments: workplace cultures in which workers perceive that new ideas are welcomed, valued, and encouraged; 6 components 1. challenging work: requires effort, demands attention and focus, important to others in the org.(creates flow: rewarding psychological state of effortlessness, in which you become absorbed in what you're doing and time seems to fly - balance between skills and challenge) 2. organizational encouragement: management encourages risk taking and new ideas, supports and fairly evaluates new ideas, rewards and recognizes creativity, encourages the sharing of new ideas 3.supervisory encouragement: supervisors provide clear goals, encourage open interaction with subordinates, and actively support development teams' work and ideas 4. work group encouragement: group members have diverse experience, educations, and backgrounds and the group fosters mutual openness to ideas, shared commitment to ideas, positive constructive commitment to ideas 5. freedom: having autonomy over one's day-to-day work and a sense of ownership and control over one's ideas 6: lack of impediments: no internal conflict/power struggles, rigid management structures, or conservative bias toward the status quo - discourage creativity

line vs. staff authority

-line authority: right to command immediate subordinates in the chain of command -line function: activity that describes directly to creating or selling the company's products (ex. activities within the line department) -staff authority: right to advise, but not command, others who are not subordinates in the chain of command -staff function: does not contribute directly to creating or selling the product, but supports line activities (ex. HR)

advantages of group decision making

-much better at defining the problem and generating alternative solutions -view problems from multiple different perspectives because group members have different knowledge, experience, etc. -groups can find and access much more information than individuals alone -increased knowledge and information available make sit easier to generate more alternative solutions -if groups are involved, group members more committed to making the chosen solutions work

adapting to cultural differences in global business

-national culture: set of shared values and beliefs that affects the perceptions, decisions, and behavior of the people from a particular country -five consistent culture dimensions across countries: 1. power distance: extent to which people in a country accept that power is distributed unequally in society and organizations 2. individualism: degree to which societies believe that individuals should be self-sufficient (loyalty to work second) 3. masculinity/femininity: difference between highly assertive and highly nurturing cultures 4. uncertainty avoidance: degree to which people in a country are uncomfortable with unstructured, ambiguous, unpredictable situations 5. short-term versus long-term orientation: whether cultures are oriented to the present and seek immediate gratification or to the future and defer gratification -once you are aware of cultural differences, decide how to adapt

pitfalls of planning (disadvantages)

-not a cure-all(can't fix all problems) -can impede change and prevent or slow needed adaptation: so committed that they don't see it isn't working -can create a false sense of certainty: think you know what will happen but all plans based on assumptions (if assumptions false - plan fails) -detachment of planners: they can plan the abstract theories but can't plan implementation for things they don't understand

rational decision making process - 1. define the problem

-problem: when there is a gap between a desired state and existing state -presence of gap doesn't mean managers will make decisions to solve the problem - 1. management must be aware, 2. be motivated to reduce the gap, 3. must have knowledge, skills, abilities, and resources to fix the problem

lower managers planning

-responsible for developing and carrying out operational plans: day-to-day plans for producing or delivering the organization's products or services (direct behavior, efforts, or priorities of operative employees for periods between 30 days to 6 months) - can be sing-use, standing, budget

top level planning

-responsible for long-term strategic plans: overall company plans that clarify how the company will serve customers and position itself against competitors over the next two to five years; process of developing strategic plan 1. purpose statement: organizational mission or vision - statement of a company's purpose for existing (brief, enduring, inspirational, clear, consistent with wide-shared company beliefs and values) - ex. "to make people happy" 2. strategic objective: flows from purpose statement; more specific goal that unifies company-wide efforts, stretches and challenges the organization, and possesses a finish line and a frame

organizational change tools and techniques

-results driven change: change created quickly by focusing on the measurement and improvement of results - quick, visible improvements motivate employees to continue to make additional changes to improve measured performance -General Electrics workout (kind of results driven change): 3 day meeting between managers/employees from different levels of an organization to generate and act quickly on solutions to specific business problems 1. agenda and specific business problems the group will solve 2. outside facilitator breaks them into groups and helps them spend the next day and a half discussing and debating solutions 3. teams present their solutions to boss -transition management team: group of 8-12 people whose full time job is to manage and coordinate a company's change process - disbanded after success, don't determine how or why of change -organizational development: philosophy and collection of planned change interventions designed to improve an organization's long-term health and performance - top management support is necessary for success, educating workers and managers to change ideas, beliefs and behaviors to solve problems in new ways - designate change agent: formally in charge of guiding a change effort

plans that work - 1. set goals

-should be specific and challenge -give you a target to aim for and standards to measure success -can use SMART goals: specific, measurable, attainable, realistic, and timely

operational plans

-single-use plans: plans that cover unique, one-time-only events (ex. database when a plant blows up); created, carried out, never used again -standing plans: save managers time as they are plans used repeatedly to handle frequently recurring events; kinds 1. policies: indicates the general course of action that should be taken in response to a particular event or situation 2. procedures: more specific than policies, indicates the specific steps that should be taken in response to a particular event 3. rules and regulations: more specific than procedures, say how a particular action should be performed or what must happen or not happen in response to a particular event -budgeting plans: quantitative planning through which managers decide how to allocate available money to best accomplish goals

strategy making process- 2. conduct a situational analysis

-situation/SWOT analysis: assessment of the strengths and weaknesses in an organization's internal environment and the opportunities and threats in its external environment -ideally helps determine how to increase internal strengths and maximize external opportunities -used on entire companies and individual operations -often starts with assessment of distinctive competencies and core capabilities -use environmental scanning (strategic groups and shadow-strategy task forces)

what NOT to do when leading change

-unfreezing: 1. not establishing a sense of urgency: they aren't convinced change is necessary 2. not creating a powerful enough guiding coalition: need a core change coalition that guides and supports organizational change -change intervention 3. lacking a vision for change: don't make it clear where a company or department is headed and why - confusion, contradictions, chaos 4. under communicating the vision by a factor of 10: link everything the company does to the vision - "walk the talk" - not just one meeting about it 5.not removing obstacles to the new vision: don't make changes that support the new ways of doing things 6. not systematically planning for and creating short-term wins: want visible payoffs -refreezing 7. declaring victory too soon: slows change efforts 8. not anchoring changes in the corporation's culture: show people directly that changes have actually improved performance, make sure people who get promoted fit the new culture

4 conditions for sustainable competitive advantage

-valuable resources: allow companies to improve their efficiency and effectiveness(change with the market) -rare resources: not controlled or possessed by many competing firms -imperfectly imitable resources: impossible or extremely hard for other firms to duplicate(imitate or find substitutes) -non-substitutable resources: produces value or competitive advantage and has no equivalent substitutes or replacements

planning from top to bottom

-vision -top managers: mission -middle managers: tactical plans, management by objectives -first-level managers: operational plans, standing plans, single-use plans

strategy-making process

1. assess the need for strategic change 2. conduct a situational analysis 3. choose strategic alternatives

categories managers use of other firms in their industry

1. core firms: central companies in a strategic group - focus on these (ex. Lowe's to Home Depot) 2. secondary: firms in a strategic group that follow strategies that are related to but somewhat different from those of core firms 3. transient firms

methods for introducing structured c-type conflict into group decision making

1. devil's advocacy: assign an individual or subgroup the role of critic -generate a potential solution, assign a devil's advocated to criticize and question the solution, present the critique of the potential solution to key decision makers, gather additional relevant information, decide whether to use, change, or not use the originally proposed solution 2. dialectical inquiry: forcing decision makers to state the assumptions of a proposed solution (thesis) and then generate a solution that is the opposite (antithesis) -generate potential solution, identify the assumptions underlying the potential solution, generate a conflicting counterproposal based on the opposite assumptions, have advocates of each position present their arguments and engage in debate in front of key decision makers, decide whether to use, change, or not use the originally proposed solution

departmentalization methods for organizational structure

1. functional*: organize work and workers into separate units responsible for particular business functions or areas of expertise; when small or just starting out (ex. accounting, sales, marketing...) -departments depend on what industry the business is in -pro: specialization, lowers cost and duplication, everyone has same knowledge/experiences so communication is good -con: cross-department coordination is difficult, as they get bigger functional departments are less useful 2. product departmentalization: organize work and workers into separate units responsible for producing particular products or services -pros: specialization, managers and workers with broader experience related to entire product line, easier for top management to assess work unit progress, faster decision making -cons:duplication leads to higher costs, hard to coordinate policies/procedures across different product departments 3.customer departmentalization: based on kinds of customers -pros: focuses on customer needs, specialize the products -cons: leads to duplication of resources (2 lawyers instead of one), make decisions that please customers but hurt business 4. geographic departmentalization -pros: respond to differentiated markets, reduce costs by locating closer resources -cons: duplication of resources, difficult coordination 5. matrix departmentalization: 2 or more other forms of departmentalization used together (most common = product & functional) -report to two bosses, more cross-functional interaction -simple matrix: managers in different parts of the matrix negotiate conflicts and resources directly -complex matrix: specialized matrix managers and departments are added to the organizational structure (matrix managers report to them for help)

attractive global business climate

1. positions the company for easy access to growing markets: most important factor; determined by -purchasing power: relative cost of a standards set of goods and services in different countries -foreign competitors:number and quality of companies that already compete in a foreign market 2. is an effective but cost-efficient place to build an office or manufacturing facility -qualitative factors: workforce quality and company strategy(ex. low cost strategy will go somewhere with low transportation costs, etc.) 3. minimizes the political risk to the company: should identify two types -political uncertainty: risk of major changes in political regimes that can result from war, revolution, etc. -policy uncertainty: risk associated with changes in laws and gov. policies that directly affect the way foreign companies due business; more common -strategies for minimizing or adapting to political risk: avoidance(risks are too great- divest, sell business, postpone the investment), control(prevent or reduce political risk - lobby foreign gov. or international trade agencies), cooperation (use joint ventures and collaborative contracts - doesn't protect from policy risk)

how to increase chances of successful international assignment

1. pre-departure language and cross-cultural training -reduces uncertainty, miscommunications, and inappropriate behaviors that expatriates unknowingly commit -documentary training: identify specific, critical differences between cultures -cultural simulations: practice adapting to cultural differences -field simulation training: places trainees in ethnic neighborhood for 3-4hrs to talk to residents about cultural differences 2. consideration of spouse, family, and dual-career issues - their adaptation are the number one factor in determining expatriates success -adaptability screening: tests how well managers and their families are likely to adjust to foreign cultures

how to make a plan that works

1. set goals 2. develop commitment 3. develop effective action plans 4. track progress toward goal achievement 5. maintain flexibility

distinctive competencies vs. core capabilities

1. something that a company can make, do, perform better than its competitors (tangible, don't last long without core capabilities) 2. internal decision-making routines, problem-solving processes, and organizational cultures that determine how efficiently inputs can be turned into outputs

job specialization

a job composed of a small part of large task or process -simple, easy to learn steps with a lot of repetition -quickly becomes boring (high absenteeism and turnover) -when experienced workers quit you can teach someone new quick and easy

firm level strategies

addresses the question "How should we compete against a particular firm?" -direct competition: rivalry between two companies that offer similar products and services, acknowledge each other as rivals, and act and react to each other's strategic actions; influenced by two factors 1.market commonality: degree to which two companies have overlapping products, services, or customers in multiple markets (more market comm.=more intense competition) 2. resource similarity: extent to which a competitor has similar amounts and kinds of resources, that is, similar assets, capabilities, processes, information, and knowledge used to create and sustain an advantage - they can match (review quadrants)

industry level strategies

addresses the questions: "how should we compete in this industry?"; steps 1. analyze industry forces (Porter) 2. positioning strategy 3. adaptive strategy

job characteristics model (JCM)

approach to job redesign that seeks to formulate jobs in ways that motivate workers and lead to positive work outcomes -primary goal: create jobs that result in positive personal and work outcomes -internal motivation most important - motivation that comes from the job itself rather than the outside rewards ("I feel accomplishment"); must 1. experience work as meaningful - comes from -skill variety: # of different activities performed -task variety: degree to which a job from beginning to end requires completion of a whole and identifiable piece of work -task significance: degree to which a job is perceived to have a substantial impact on others inside or outside the organization 2. experience responsibility for the outcome of the work -autonomy: degree to which a job gives workers the discretion, freedom, and independence to decide how and when to accomplish the work 3. knowledge of results - know how well they perform -feedback: amount of information the job provides to workers about their work performance

resources

assets, capabilities, processes, employee time, information, and knowledge that an organization controls (used to improve effectiveness and efficiency)

brainstorming

brainstorming: technique in which group members build on others' ideas for generating a large number of alternative solutions; 4 rules 1. the more ideas, the better. 2. all ideas are acceptable, no matter how wild or crazy they might seem 3. other group members' ideas should be used t come up with even more ideas 4. criticism or evaluation of ideas is not allowed -has a number of disadvantages so electronic brainstorming can overcome this

global business and its impact

buying and selling of goods and services by people from different countries; impact: -multinational corporations: corporations that own businesses in two or more countries -direct foreign investment: when a company builds a new business or buys an existing business in a foreign country

adaptive strategies

choose an industry-level strategy that is best suited to changes in the organization's external environment 1. defenders: moderate, steady growth by offering limited range of products and services to well-defined set of customers -do your best to hold on to customers in a particular market 2. prospectors: seek fast growth by searching for new market opportunities, encouraging risk taking, being the first to bring innovative new products to market 3. analyzers: blend of defender and prospector strategy - moderate steady growth and limited opportunities for fast growth -usually follow or imitate successes of prospectors 4. reactors: do not follow a consistent strategy, rather than preparing for/anticipating external opportunities and threats, reactors tend to "react" to changes in their environment after they occur - poor performers

intra-organizational process

collection of activities that take place within an organization to transform inputs into outputs that customers value -reengineering -empowerment -behavioral informality

organizational process approach to organizational design

contemporary approach to organizational design; collection of activities that transforms inputs into outputs that customers value -how do things get done

technology cycles

cycle that begins with the birth of a new technology and ends when that technology reaches its limits and dies as it is replaced by a newer, substantially better technology (ex. air conditioners supplanting fans) -nearly all tech. cycles follow the S-curve pattern of innovation -beginning: progress slow, small effort = small performance -progress starts to pick up: small effort, big performance (steep slope) -flattens out again - reach performance limits -cross over line of discontinuity and switch off with new technology (usually from radical new designs or new performance-enhancing materials) -doesn't mean just faster, better, high technology - broaden your perspective by considering advances or changes in any kind of knowledge, tools, and techniques

rational decision making - 3. weight the criteria

decide which criteria are more or less important -absolute comparisons: each criterion is compared with a standard or ranked on its own merits (likert scale for the importance of a criterion) -relative comparisons: each criterion is compared directly with every other criterion

electronic brainstorming

decision making method in which group members use computers to build on each others' ideas and generate as many alternative solutions as possible -overcomes production blocking: when you have an idea but have to wait to share it because some is presenting an idea to the group (can forget your idea or change your mind) - don't have to wait you turn -overcomes evaluation apprehension: being afraid of what others will think of your ideas; all ideas are anonymous -steps 1. anonymously generate as many ideas as possible 2. edit the generated ideas, categorize them, and eliminate redundancies 3. rank categorized ideas in terms of quality 4.generate a series of action steps, decide the best order for accomplishing these steps, identify who is responsible for each step -more productive than face-to-face brainstorming

nominal group technique

decision making method that begins with quiet time in which members independently write down as many problem definitions and alternative solutions as possible -begin by having members act as individuals then they share their ideas with the group one by one -as they are read aloud they are posted for everyone to see -group discusses advantages and disadvantages of the ideas -2nd quiet time in which group members independently rank the ideas presented -read rankings aloud and the idea with highest rankings selected -improves group decision making by reducing a-type conflict but also restricts c-type conflict -better than traditional groups but not as good as devil's advocate or dialectical inquiry approaches

organizational change

difference in the form, quality, or condition of an organization over time

strategic moves of direct competition

firm-level strategies help managers determine when, where, and what strategic actions should be taken against a direct competitor -attack: competitive move designed to reduce a rival's market share or profits (ex. drop your price below theirs) -response: countermove, prompted by rival's attack - designed to defend or improve a company's market share or profit 1. match/mirror competitor's move (ex. lower price too) 2. along different dimension (ex. let consumers get rid of advertisements) -when market commonality is large - less attack and more respond to attack -resource similarity determines response capability - how quickly and forcefully a company can respond to an attack -firm with similar resources less likely to attack - less long-term gain for them -more attacks and responses = better performance (quick responders gain market share and profits at expense of late responders)

rational decision making - 4. generate alternative courses of action

generate as many alternatives to solve the problem as possible

trade barriers

government imposed regulations that increase the cost and restrict the number of imported goods - helps domestic business (protectionism: use of trade barriers to shield domestic companies and their workers from foreign competition) 1.tariff: direct tax on imported goods 2. non-tariff barriers: non-tax methods of increasing the cost or reducing the number of imported goods -quotas: specific limits on the # or volume of imported products -voluntary export restraints: limit the amount of a product that can be imported annually (WTO says these are illegal) -government import standards: standard supposedly established to protect the health and safety of citizens but in reality often used to restrict imports -government subsidies: government loans, grants, and tax deferments given to domestic companies to protect them from foreign competition -customs valuation/classification: classification assigned to imported products by government officials that affects the size of the tariff and imposition of import quotas

stepladder decision making technique

group decision making technique that ensures each member's contributions are independent and are considered and discussed by the group -starts with discussion between two group members who share their thoughts, ideas, and recommendations before jointly making a tentative decision -other group members added one at a time -existing members take time to listen to and understand each new member's thoughts and ideas then share the ones they have already considered -group discusses new and old idea together and makes a tentative decision -continues until each group members' ideas heard -don't rush and make sure each added member has no idea of previous solutions, all members present for final decision

delphi technique

group decision-making method in which members of a panel of experts respond to questions and to each other until reaching agreement on an issue 1. assemble panel of experts - don't all have to be in one place 2. create questionnaire consisting of a series of open-ended questions for the group 3. group members' written responses are analyzed, summarized, and fed back to the group for reactions until the members reach agreement -send back the analysis and ask them whether they agree or disagree with the consensus 4. summarize their feedback again and obtain reactions to that feedback until the panel members reach agreement -not for common decisions but rather important, long-term issues -time consuming, labor intensive, expensive

strategic groups

group of companies within an industry against which top managers compare, evaluate and benchmark strategic threats and opportunities -part of environmental scanning during SWOT analysis -pick direct competitors and companies with similar strategies -categorize firms as core, secondary, or transient

organizational structure approach to organizational design

historically used for organizational design; vertical and horizontal configuration of departments, authority, and jobs within a company -who reports to whom, who does what, where is the work done -departments and relationships among employees -departmentalization: method of subdividing work and workers into separate organizational units that take responsibility for completing particular tasks 1. functional 2. product 3. customer 4. geographic 5.matrix

benchmarking

identifying outstanding practices, processes, and standards at other companies and adapting them to your own company

planning works best when everyone pulls ____

in the same direction - goals and action plans at the bottom and middle of the organization support the goals and action plans at the top of the organization

technology

knowledge, tools, and techniques used to transform inputs (raw materials and information) into outputs (products and services)

centralization of authority vs. decentralization

location of most authority at the upper levels of the organization -decentralization: location of a significant amount of authority in the lower levels of the organization - high degree of delegation at all levels; employee capability, faster decision making -should decentralize where standardization is unimportant (standardization: solving problems by consistently applying the same rules, procedures, and processes)

strategic reference point theory

managers choose between two basic alternative strategies - risk avoiding(protect existing competitive advantage) or risk seeking(extend or create competitive advantage) -decision depends on if they see the company as falling above or below strategic reference points: targets that mangers use to measure whether their firm has developed the core competencies that it needs to achieve a sustainable competitive advantage (ex. checking competitor's prices) -if above: satisfied, risk avoiding, see threats -if below: dissatisfied, risk seeking, see opportunities - nothing to lose -not deterministic; managers can influence the strategies chosen by their company by actively changing and adjusting the strategic reference points they use to measure performance (ex. raise the standards) -successful organizations frequently revise their strategic reference points to better focus managers attention on the new challenges and opportunities that occur in their changing business environments

managing innovation during incremental change - compression approach

managing innovation in more certain environments -goals: lower costs and incremental improvements to performance and function of the existing dominant design -strategy: compress the time and steps needed to bring about small, consistent improvements in performance and functionality -assumes innovation is a predictable process, that incremental innovation can be planned using a series of steps, and that compressing the time to complete those steps can speed up innovation; 5 aspects 1. planning: create a series of planned steps to accomplish goal of compressing development time - avoid unnecessary steps, place steps in right order to save time, less misunderstandings and better coordination -based on idea of generational change: when incremental improvements are made to a dominant technological design such that the improved version of the technology is fully backward compatible with the older version 2. supplier involvement: delegating some of the preplanned steps to outside suppliers reduces internal work; also a source of ideas 3. shortening of the individual steps: ex. Computer-aided design: make and test designs on computer rather than expensive, long time to make prototypes 4. overlapping steps: reduce delays or waiting times between steps 5. multifunctional teams

phase model of globalization

model that many companies have followed when making the transition from a domestic company to a global company 1. exporting: produce in home country, sell in foreign countries -pro: less dependent on home sales, more control over research, design, production decisions -con: tariff and non-tariff barriers that increase final cost to consumers, transportation costs, rely on foreign importers for product distribution 2. cooperative contracts: agreement when foreign business owner pays a company a fee for the right to conduct that business in his or her country -licensing: domestic company, the licensor, receives royalty payments for allowing another company, the licensee, to produce the licensor's product, sells its service, or use its brand name in a specified foreign market; increase profits without investing more money,no tariffs/other barriers; con: licensor gives up control over the quality and they can become competitors -franchise: collection of networked firms in which the manufacturer or marketer of a product of service, the franchisor, licenses the entire business to another person or organization, the franchisee - help them with training, marketing, exclusive location rights; 3. strategic alliances: agreement in which companies combine key resources, costs, risk, technology and people -most common=joint venture: when two existing companies collaborate to form a third company; pro: no trade barriers, bear only part of costs and risks; con: joining four cultures 4. wholly owned affiliates: foreign offices, facilities, and manufacturing plants that are 100% owned by the parent company -parent company receives all the profits and has complete control -expensive

group decision making can lead to ___ decisions than those typically made by individuals

much better

rational decision making - 6. compute the optimal decision

multiply rating for each criterion by weight for that criterion

global new ventures

new companies that are founded with an active global strategy and have sales, employees, and financing in different countries -reasons: reliable air travel, low cost communication tech. (email, skype), critical mass of business people with extensive personal experience in all aspects of global business -characteristics: founders successfully develop and communicate company's global vision from inception, rather than going global at one time bring a product or service to market in several foreign markets at the same time

job design

number, kind, and variety of tasks that individual workers perform in doing their jobs

Management by Objectives

often used by middle managers to develop and carry out tactical plans 1. discuss possible goals 2. collectively select goals that are challenging, attainable, and consistent with the company's overall goals 3. jointly develop tactical plans that lead to the accomplishment of tactical goals and objectives 4. meet regularly to review progress toward accomplishment of those goals

organic organizational design

organizations characterized by broadly defined jobs and responsibility, loosely defined, frequently changing roles, and decentralized authority and horizontal communication based on task knowing -best in dynamic, changing business environments -focused on organizational process, collection of activities that transform inputs into outputs valued by customers

mechanistic organizational design

organizations characterized by specialized jobs and responsibilities, precisely defined, unchanging roles; and a rigid chain of command based on centralized authority and vertical communication -best in stable, unchanging business environments -job design, authority, and departmentalization best here -focused on organizational structure

corporate strategy

overall organizational strategy that addresses the question "what business or businesses are we or should we be in?"; two major approaches: 1. portfolio strategy: minimize risk by diversifying investment among various businesses or product lines -more businesses = less chance of failure -pick lines/companies that fit well with current mix -acquisitions or develop new businesses internally -diversification: reducing risk by investing in many types of businesses so the failure of one does not doom the entire portfolio -even better=unrelated diversification: creating or acquiring companies in completely unrelated businesses (less risk) (acquisition best way to do this) (BCG matrix) -invest cash from maturing businesses into the new, fast growth ones 2. grand strategies: broad, strategic plan used to help an organization achieve its strategic goals; types -growth: purpose is to increase profits, revenues, market share, or the number of places (stores, offices, etc.) in which the company does business - can grow externally by merging; or internally - expanding the company's existing businesses -stability: continue doing what the company has been doing, just better - improve the way in which they sell the same products or services to the same customers - when environment doesn't change that much or struggle with periods of explosive growth -retrenchment/recovery: turn around very poor company performance by shrinking the size or scope of the business or closing or shutting down different lines of the business - 2nd step=recovery, strategic actions that a company takes to return to a growth strategy

design competition

part of discontinuous change; competition between old and new technologies to establish a new technological standard or dominant design

technological substition

part of discontinuous change; occurs when customers purchase new technologies to replace older technologies

innovation streams

patterns of innovation over time that can create sustainable competitive advantage -begins with technological discontinuity: scientific advance or unique combo of existing technologies creates a significant breakthrough in performance or function -followed by discontinuous change: technological substitution and design competition -then dominant design emerges: new technological design or process that becomes the accepted market standard (critical mass, not always the best design wins just the most accepted/practical, independent standards bodies)

best approach to portfolio strategy

related diversification > unrelated diversification - creating or acquiring companies that share similar products, manufacturing, marketing, technology, or cultures -companies with core capabilities that complement the core capabilities of companies already in the portfolio -businesses can work as a team, relying on each other for needed experience, expertise, and support

incremental change

side effect of the emergence of a dominant design - when companies innovate by lowering costs and improving the functioning and performance of the dominant technological design

expatriate

someone who lives and works outside his or her native country

organizational innovation

successful implementation of creative ideas in an organization -creativity: production of novel and useful ideas

rational decision making - 5. evaluate each alternative

systematically evaluate each alternative against each criterion -longer/more expensive

positioning strategies - industry level strategy

three strategies 1. cost leadership: producing a product or service of acceptable quality at consistently lower production costs than competitors so that the firm can offer the product or service at the lowest price in the industry -deters new entrants -lowers number of substitute products -increases bargaining power with suppliers - they need to offer lower prices if they want us to buy from them 2. differentiation: making your product or service sufficiently different from competitors' offerings so that customers are willing to pay a premium price for the extra value or performance that it provides -reduces threat of substitute products -retain more customers (reduces new entrants) 3. focus strategy: uses either cost leadership or differentiation to produce a specialized product or service for a limited, specially targeted group of customers in a particular geographic region or market segment

plans that work - 4. track the progress

two methods for tracking progress 1. set proximal and distal goals -proximal goals: short-term goals or subgoals; achieving may be more motivating and rewarding than far off goals -distal goals: long-term or primary goals 2. gather and provide performance feedback -can monitor progress and make adjustments in effort, direction, and strategy ( -can double effectiveness of planning (ex. bakery safety example, just went back without feedback)

job rotation, enlargement, and enrichment

used to try to improve job specialization -job rotation: periodically moving workers from one specialized job to another to give them more variety and the opportunity to use different skills -job enlargement: increases the number of different tasks that a worker performs within one particular job - stresses them out if not given more time but variety -job enrichment: increase the number of tasks and giving works the control to make meaningful decisions about their work

competitive advantage

using resources to provide greater value for customers than competitors can -sustainable competitive advantage: a competitive advantage that other companies have tried unsuccessfully to duplicate and have, for the moment, stopped trying to duplicate (NOT long-lasting)

structured conflict

way in which managers can overcome problems with group decision making - right kind of conflict can lead to better decision making 1. C-type/cognitive conflict: focuses on problem and issue related differences of opinion - disagree because different experiences and expertise lead them to view the problem and potential solution differently; more willing to examine, compare, and reconcile those differences with best solution 2. a-type/affective conflict: emotional reactions that occur when disagreements become personal rather than professional - hostility, anger, resentment, distrust, cynicism, apathy - undermines team effectiveness (ex. "you don't understand")

reengineering

way of redesigning inter-organizational processes; fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical measures of performance, such as cost, quality, service, and speed -changes orientation from vertical to horizontal: take orders from a customer who is at the beginning and end of each process -changes task interdependence: extent to which collective action is required to complete an entire piece of work; three types of task interdependence 1. pooled: each job or department contributes to the whole independently (lowers) 2. sequential: work performed in succession, as one group or job's outputs become the inputs (lowers) 3. reciprocal: different jobs or groups work together in a back and forth manner to complete the process (raised)

empowering workers

way of redesigning intraorganizational processes; permanently passing decision-making authority and responsibility from managers to workers by giving them the information and resources they need to make and carry out good decisions -empowerment: feeling of intrinsic motivation, in which workers perceive their work to have meaning and perceive themselves to be competent

global consistency

when a multinational company has offices, manufacturing plants, and distribution facilities in different countries and runs them all using the same rules, guidelines, policies and procedures -managers at company headquarters like this because it simplifies decisions -too much consistency = run risk of using management procedures poorly suited to particular countries

local adaptation

when a multinational company modifies its rules, guidelines, policies, and procedures to adapt to differences in foreign customers, governments, and regulatory agencies -preferred by local managers -focus too much on adaptation = run risk of losing the cost effectiveness and productivity that result from using standardized rules and procedures throughout the world

technological lockout

when companies bet on the wrong dominant design during design competition - new dominant design makes it difficult for a company to competitively sell products

kiss of yes

workers who support change in public, nodding and smiling in agreement, but then ignore the changes in private and do their jobs as they always have