MGT 3003, Exam 1 Study Guide

Strategic Implementation

- Putting strategic plans into effect

Porter's Five Forces

- threat of new entrants - bargaining power of suppliers - bargaining power of buyers - threat of substitute products or services - rivalry among competitors

Five reasons companies expand internationally

1. Availability of supplies 2. New markets 3. Lower labor costs 4. Access to finance capital 5. Avoidance of tariffs & import quotas

Why companies expand internationally

1. Availability of supplies 2. New markets 3. Lower labor costs 4. Access to finance capital 5. Avoidance of tariffs & import quotas

steps in the planning and strategic management process

1. Establish the mission and vision 2. Assess the current reality 3. Formulate the grand strategy & strategic, tactical & 4. operational plans 5. Implement the strategy 6. Maintain strategic control

seven challenges to being an effective manager

1. Managing for Competitive Advantage—Staying Ahead of Rivals 2. Managing for Ethical Standards 3. Managing for Sustainable Development—The Business of Green 4. Managing for Happiness and Meaningfulness 5. Managing for Globalization—The Expanding Management Universe 6. Managing for Inclusion and Diversity—The Future Won't Resemble the Past 7. Managing for Technological Advances—Dealing with the "New Normal"

Why planning and strategic management are important

1. Providing direction and momentum 2.encouraging new ideas 3. developing a sustainable competitive advantage

three key principles of strategic positioning

1. Strategy is the creation of a unique and valuable position 2. Strategy requires trade-offs in competing 3. Strategy involves creating a "fit" among activities

Three Common Grand Strategies

1. growth strategy 2. stability strategy 3. defensive strategy

two planning steps

1. make the plan 2. carry out the plan

Management by Objectives (MBO)

1. managers and employees jointly set objectives for the employee 2. managers develop action plans 3. managers and employees periodically review the employee's performance 4. the manager makes a performance appraisal and rewards the employee according to results

Operating plan

A plan that breaks long-term output into short-term targets or goals

HPWPs Qwin's firm pays above-market wages so that it can attract the best talent to the organization.

Ability-enhancing practices

High-Performance Work Practices : 3 Types of HPWPs

Ability-enhancing practices, opportunity-enhancing practices, motivation-enhancing practices

The GLOBE Project

Assertiveness Gender Egalitarianism Performance Orientation Power Distance Uncertainty Avoidance Institutional Collectivism In-Group Collectivism Future Orientation Humane Orientation

Managerial Skills: Because he can see the big picture, Hudson is able to link the right people up throughout the company from top to bottom.

Conceptual Skills

Managerial Skills: Laetitia has had great success in advancing her career because she is able to see how things fit together throughout the company.

Conceptual Skills

two control steps

Control the direction by comapring results to plan Correct deviation in the original plan or improve future plans

management function that it best represents: Kellen is analyzing organizational data to determine why the firm is experiencing abnormally high employee turnover.

Controlling

is the notion that corporations are expected to go above and beyond following the law and making a profit to help society.

Corporate social responsibility

Importing, Exporting, and Countertrading

Currently, you make all of your own promotional products and sell them to customers within the United States. If you can find a manufacturer who can produce the products cheaper than you, you could import them and then sell them to your customers. Additionally, rather than limiting your market to customers only within the United States, with the exporting option you could sell your products to customers that are located virtually anywhere in the world. Another option would be to countertrade with a company outside of the United States. You may be able to do the customizing work better or more efficiently than a trade partner outside of the United States. You could potentially counter trade—that is, barter products for products with your trade partner rather than importing or exporting for cash.

Mission Statement

Describes the image the organization wants to project, Illuminates the organization's attitude toward its employees, Outlines the organization's customer base, Articulates the geographical locations where the company competes

managers believe that their native country, culture, language, and behavior are superior to all others

Ethnocentric

evidence-based management

Evidence-based management means translating principles based on best evidence into organizational practice, bringing rationality to the decision-making process.

Five Ways of Expanding Internationally

Global Outsourcing, Importing, Exporting, and Countertrading, Joint Venture, Licensing and Franchising, Wholly Owned Subsidiary

Managerial Skills: Anouk always seems to be able to rally her team when it gets to be crunch time.

Human Skills

Managerial Skills: Milo does a great job interacting with and gaining the trust of both his sales team and his customers alike.

Human Skills

Strategic planning is critical, but without ________ it will be worthless.

Implementation

Vision Statement

Inspires enthusiasm and encourages commitment, Is easily understood and well-articulated, Is appropriate for the times and for the organization, Reflects high ideals

Values Statement

Is intended to guide all of the actions in the organization, Expresses the company's worldview, Limits itself to a small number that employees can recall when making decisions, Unchanging; As applicable in 100 years as it is today

Four Approaches to Resolving Ethical Dilemmas

Justice approach, individual approach, moral-rights approach, utilitarian approach

management function that it best represents: Atticus spends a sizable portion of his day helping to resolve disagreements between employees in his organization

Leading

Managerial Challenges: As head of the marketing department, Anthony makes an extra effort to be sure the company's advertising campaigns highlight its most cutting-edge innovations.

Managing for Competitive Advantage—Staying Ahead of Rivals

Managerial Challenges: Even though he knows they are good people, Fred has to monitor his sales employees' activities to make sure they haven't crossed any lines in trying to win new business.

Managing for Ethical Standards

Managerial Challenges: Xamira has been proactive in her role as sales manager by providing her sales force with training opportunities to help them better communication with sales leads from unfamiliar cultures.

Managing for Globalization—The Expanding Management Universe

Managerial Challenges: When it comes to managing his employees, Tyler always goes the extra mile to build teamwork and camaraderie among his employees.

Managing for Happiness and Meaningfulness

Managerial Challenges: Danica interviews many different types of people in her role. With today's rapidly changing workforce, she knows it's important to hire the best person for each job opening she is filling.

Managing for Inclusion and Diversity—The Future Won't Resemble the Past

Managerial Challenges: Part of Mirren's role as operations manager is to make sure the company isn't wasting energy or creating excessive pollution in their operations.

Managing for Sustainable Development—The Business of Green

Managerial Challenges: When Olivia started with the company, everyone worked a standard 8 to 5 workday and everyone knew each other. Today, some workers rarely come to the office to do their work, but Olivia embraces the opportunities these arrangements provide.

Managing for Technological Advances—Dealing with the "New Normal"

HPWPs At Sutton's car dealership, employees receive bonuses based on their quarterly sales performance.

Motivation-enhancing practices

HPWPs Britain's organization gives employees a great deal of autonomy and gives even lower-level workers the chance to participate in the organization's decision-making process.

Opportunity-enhancing practices

management function that it best represents: Lindsay determined the best structure and reporting hierarchy for her firm based upon the company's strategic goals.

Organizing

A Truss Above, a home builder in the United States, secures products such as roofing shingles, cabinets, and plumbing materials from a variety of domestic and international suppliers. ________ is the practice of using outside suppliers to help the contractor build homes.

Outsourcing

management function that it best represents: Sariyah sets challenging sales targets for her team.

Planning

Global Outsourcing

Rather than purchasing the materials you need to make your products from local or regional U.S. vendors, you could purchase them at a decreased cost to you from companies located outside of the United States. This could potentially lower your cost structure and improve your margins.

"SMART" goals

Results Oriented Target Dates Attainable Specific Measurable

Basheer operates a business that smooths and finishes poured concrete floors, sidewalks, driveways, and pool decks. Basheer has been observing and timing each task undertaken by his workers because he would like to increase their efficiency. Basheer is engaging in ________ management.

Scientific

SMART

Specific, Measurable, Attainable, Results-Oriented, Target dates

Managerial Skills: Because of her training, Cicely was able to analyze her company's cost structure and make specific suggestions to bring it in line with their competitors in a very short period of time after she was hired.

Technical Skills

Managerial Skills: Jose was able to perform well in his new job early on because he didn't need extensive training before he could dig in and get to work. He had mastered the ins and outs of the industry at his last job.

Technical Skills

Justice Approach

The most ethical decision is that which best upholds impartial standards of fairness and equity.

Moral-Rights Approach

The most ethical decision is that which is most respectful of the fundamental rights of all human beings

Individual Approach

The most ethical decision is that which will result in your own best long-term interests.

Utilitarian Approach

The most ethical decision is that which yields the greatest good for the greatest number of people

VRIO framework

The resource-based framework that focuses on the value (V), rarity (R), imitability (I), and organizational (O) aspects of resources and capabilities.

Danny mentions that he is only in business if his employees are happy to come to work. Based on McGregor's work, Danny would have a ________ view of his employees.

Theory Y

Theory Y managers

Theory Y represents a human relations outlook—an optimistic, positive view of workers as capable of accepting responsibility, having self-direction and self-control, and being imaginative and creative. Danny believes his employees need to be happy to come to work, meaning they should be happy doing what they do.

An organization should adopt planning and strategic management for three reasons:

They can (1) provide direction and momentum, (2) encourage new ideas, and above all (3) develop a sustainable competitive advantage.

Wholly Owned Subsidiary

This option would have you owning an entire company in a foreign company. You might purchase an existing company, or start a greenfield venture, which is a foreign subsidiary that you would build from scratch.

Porter's Five Competitive Forces

Threat of New Entrants Bargaining Power of Suppliers Threat of Substitute Products or Services Rivalry Among Competitors Bargaining Power of Buyers

values statement

What values do we want to emphasize?

Joint Venture

You may find a strategic ally and decide to start a joint venture in order to enter the international arena. In this situation, you and your strategic ally would start a new enterprise in a foreign country and share both the risks and rewards in that venture.

Licensing and Franchising:

You might consider licensing a company in another country to make or distribute your products. That company would pay a fee for the right to make or distribute those products. Alternatively, you might set up a franchising arrangement whereby your foreign partner would pay a fee and share the profits in return for using your company's brand name and ways of doing business.

Franchising

a company allows a foreign company to pay it a fee and a share of the profit in return for using the company's brand name and a package of materials and services

Licensing

a company allows a foreign company to pay it a fee to make or distribute the first company's product or service

Importing

a company buys goods outside the country and resells them domestically

Exporting

a company produces goods domestically and sells them outside the country

business plan

a document that outlines a proposed firm's goals, the strategy for achieving them, and the standards for measuring success

VRIO

a framework for analyzing a resource or capability to determine its competitive strategic potential by answering four questions about its Value, Rarity, Imitability, and Organization; valie, rarity, imitability, organization

Strategic Management

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

Goals

a specific commitment to achieve a measurable result within a stated period of time

geocentric managers

accept that there are differences and similarities between home and foreign personnel and practices and that they should use whatever techniques are most effective

strategic positioning

attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company

ethnocentric managers

believe that their native country, culture, language, and behavior are superior to all others

A multinational corporation is a(n)

business firm with operations in several countries.

A ________ is a document that outlines a proposed firm's goals, the strategy for achieving them, and the standards for measuring success, and a ________ outlines the need the firm will fill, the operations of the business, its components and functions, as well as the expected revenues and expenses.

business plan; business model

three principal historical perspectives or viewpoints on management

classical, behavioral, and quantitative

Once implemented, managers need ________ to keep strategic plans on track.

control systems

Planning

coping with uncertainty by formulating future courses of action to achieve specified results

Porter's Four Competitive Strategies

cost-leadership, differentiation, cost-focus, focused-differentiation

contingency planning

creation of alternative hypothetical but equally likely future conditions

An organization's external stakeholders include

customers, suppliers, strategic allies, and financial institutions.

action plan

defines the course of action needed to achieve the stated goal; have a date usually

If a company is using a ________, then more efficient workers earn higher wages.

differential rate system

operational planning

done by first line managers for the next 1-52 weeks

tactical planning

done by middle managers for the next 6-24 months

Strategic Planning

done by top managers for the next 1-5 years

Valentino is proud to work for a company with a strong ________ because he knows the organization supports ethical behavior

ethical climate

Danny is experimenting with cashless dining at four locations. If he utilizes the results of this experiment in deciding whether to proceed with this new policy at all his locations, he would be utilizing

evidence-based management.

A real estate development company is considering a deal to develop 1,000 condominium units. This deal largely rests on a hat the city's population will grow by 23% over the next decade.

forecast

Wholly Owned Subsidiaries

foreign subsidiary that is totally owned and controlled by an organization

joint ventures

formed with a foreign company to share the risks and rewards of starting a new enterprise together in a foreign country also known as a strategic alliance

Some examples of ________ are companies selling products, operating factories, and collaborating with partners in other countries.

globalization

The trend of the world economy toward becoming a more interdependent system is known as

globalization

power distance

how much people accept inequality in a social setting

masculine/femininity

how much people prefer performance-oriented traits or relationship-oriented traits

Individualiam/Collectivism

how people are viewed as part of the society, with either individuals or collective groups given more importance

The Systems Viewpoint : 4 Parts of a System

inputs, outputs, transformational processes, and feedback

uncertainty avoidance

intolerance for uncertainty and risk

When Ramiro inspires his employees to do their best to help the organization meet its goals, he is

leading

For a manufacturing company that set a strategic goal to reduce waste by 15%, each division in the organization can use the ________ to identify tactical goals that support waste reduction.

means-end chain; shows how goals are connected or linked across an organization.

Mitski supervises the returns desk in a department store. Mitski has set a goal for the rest of the year of finishing her daily office work quicker so she can assist at the returns desk earlier in the morning. She knows this will improve customer service and also help decrease theft which will assist the company in achieving its goal of decreasing costs. Finishing her office work quicker represents a(n) ________ for Mitski.

operational goal

According to the BCG matrix, stars are

organizations with high growth and high market share which are definite keepers.

Business model

outlines the need the firm will fill, the operations of the business, its components and functions, as well as the expected revenues and expenses

External stakeholders

people or groups in the organization's external environment that are affected by it. This includes customers, competitors, suppliers, distributors, strategic allies, employee organizations, local communities, financial institutions, government regulators, and special-interest groups

four principals of management

planning, organizing, leading, and controlling

two kinds of tariffs

protective and revenue

The key reasons that an organization should adopt planning and strategic management are to

provide direction and momentum, encourage new ideas, and develop a sustainable competitive advantage.

The triple bottom line

representing people, planet, and profit (the 3 Ps)—measures an organization's social, environmental, and financial performance.

A nation's culture is the ________ common to its people.

shared set of beliefs, values, knowledge, and patterns of behavior

As the manager of Cut-Off Salon, LaVonne ensures the prices she charges exceed the cost of providing the services. She also switched the entire salon to carbon-neutral styling products. Which additional element of the triple bottom line should LaVonne consider?

social

Ethics are

standards of right and wrong that influence behavior.

SWOT Analysis

strengths, weaknesses, opportunities, threats

While setting up their corporation, Amadi and Amir implement a system of governing their organization so that the interests of corporate owners and other stakeholders are protected. Amadi and Amir have set up a

system of corporate governance

three principal contemporary viewpoints

systems, contingency, and quality-management

polycentric managers

take the view that native managers in the foreign offices best understand native personnel and practices, and so the home office should leave them alone

Barriers to International Trade

tariffs, import quotas, embargoes, sanctions

Managers need to work on developing three primary skills

technical, conceptual, and human skills

strategy innovation

the ability to reinvent the basis of competition within existing industries—"bold new business models that put incumbents on the defensive."

Selecting your management approach based on the situation and the people involved is applying

the contingency viewpoint

Assertiveness

the extent to which a society expects people to be confrontational and competitive as opposed to tender and modest

in-group collectivism

the extent to which people should take pride in being members of their family, circle of close friends, and their work organization

system of corporate governance

the system of governing a company so that the interests of corporate owners and other stakeholders are protected

Efficiency is ________, while effectiveness is ________.

using resources wisely; achieving results

global outsourcing

using suppliers outside the US to provide labor, goods, or services