Management Midterm 2

shrinking globe
globalization forces a
modern communication technology, air travel, and corporate globalism
what are examples of globalization
globalization
What is the tendency of firms to expand sales, technology, and ownership to new market in other countries
you can get a big mac almost anywhere in the world, living standards go up faster, global competition keeps a lid on prices, innovation with fresh ideas from abroad, access to markets will billions of new customers
What are the pros of globalization
millions of americans lose jobs, fear of losing jobs if company has global competition, pay cut demands, companies threat to to transfer jobs
What are the cons of globalization
stage 1- exporting, stage 2- cooperative contracts, stage 3- strategic alliances, stage 4-wholly owned affiliates. Also global new ventures
What are the stages of the internalization process
cooperative contracts
What is having a contract with another company that allows them to build your product in its own country, an agreement in which a foreign business owner pays a company a fee for the right to conduct that business in his or her country
licensing and franchising
What are the two types of cooperative contracts
licensing
What is an agreement in which a domestic company, the licensor, receives royalty payments for allowing another company, the licensee, to produce the licensor’s product, sell its service, or use its brand name in a specified foreign market, you are giving them the right to build and sell your product
franchising
What is allowing someone else to run your business in another country in your name and processes, a collection of networked firms in which the manufacturer or market of a product or service, licenses the entire business to another person or organization
Strategic alliances
What is when two companies combine resources, share profits and risk failures, and have equal ownership
wholly owned affiliates
What is when you buy companies in other countries and own them, foreign offices, facilities, and manufacturing plants that are 100 percent owned by the parent company
global new ventures
What is when new companies are founded with the purpose to be a global company, new companies that are founded with an active global strategy, and have sales, employees, and financing in different countries
Michael, the director of foreign sales for mustang jeans, was set to finish the deal with a Norio. Norio had talked to another employee from mustang jeans and had developed a relationship with them, but michael was sent to make the deal. Michael was straight forward, time is money, money is time Norio was wanting to establishing relationships first.
What is the problem at mustang jeans
High context culture
What is cultures in which nonverbal and situational messages convey meaning. A relationship is more important than terms, developing trust is very important to business transactions, one might feel untrusted by signing a contract
Brazil and Japanese
What is an example of a high context culture
Low context cultures
What are cultures in which words convey primary meanings, nonverbal messages are secondary, the terms of the deal are more important than building a business relationship
american culture
What is an example of a low context culture
Thomas friedman
Who argues that the world is flat
because of advances in technology, the global playing field has been leveled and you can innovate from anywhere now. Predicted that there would be a leveling of the world. For the us, we would level down and india would increase
– we have seen a decline in the middle class, manufacturing leaving our country
What is Thomas Friedman’s argument
cultural differences
What is an important part of global management
prepare you for global business
good companies
culture and trade
What are the two parts of just how flat is the world?
multinational
What are business operation in more than one country
NAFTA
What is the idea of trading zones, opens up us borders so goods and series can flow freely from tariffs and non tariff barriers between Canada, the us, and Mexico
create new global ventures
If companies dont follow the phase model, they
economic, legal/political, sociocultural, and technology
What are the four things you should be aware of when deciding where to do business
economic
Is their economy growing, you dont want to go into a country that is in recession, is there purchasing power. .are all questions relating to
legal/politcal
What legal protections are there to make business possible… are all questions relating to
sociocultural
Demogrpahic characteristics, attitudes of customer base, quality potential workforce, language barriers, work experience needed to run a business.. are all questions relating to
Technological
Not every country has the resources to make your service or good valuable.. are all questions relating to
in other places (the world is spiky)
even though you can innovate from anywhere, its happening
culture
What is a populations taken for granted assumptions, values, beliefs, symbols that foster patterned behavior
American
Straightforward, bold, wanted to get straight to business is the characteristics of what culture
power distance, individualism, masculinity, uncertainty avoidance, short term versus long term orientation, and indulgence vs restraint
Professor Geert Hofestede spent 21 years studying cultural differences in fifty three countries. His research shows that there are six consistent cultural dimensions across countries… What are they?
power distance
What is the extent to which people in a country accept the power is distributed unequally in society and organizations, the extent to which people will tolerate unequal power distribution
us, they dont like their boss to have power over them or tell them what to do, they want to have a say in decisions that affect them
an example of a low power distance country is
china, they wait for authority
an example of a high power distance country is
Individualism
What is the degree to which societies believe that individuals should be self sufficient, employees put loyalty to themselves first and loyalty to their work group second
us
What is an example of a country that is very individualistic
china, indonesia
What is an example of a country that is collectivistic
masculinity vs femininity
What capture the differences between highly assertive and highly nurturing cultures
masculine
What cultures emphasize assertivness, competition, material success, and achievement
feminine
What cultures emphasize the importance of relationship, modesty, caring for the weak, and quality of life
china and japan
What is an example of a masculine culture
netherlands
What is an example of a feminine culture
uncertainty avoidance
What is the degree to which people in a country are uncomfortable with unstructured, ambitious, unpredictable situations
no
Is a characteristic of us a uncertainty avoidance
short term/long term orientation
What addresses whether cultures are oriented to the present and seek immediate gratification or to the future and defer gratification
consumer driven
Countries that are short term are more
savings driven
Countries that are long term are more
short term- us , long term- china
An example of a short term and a long term culture is
indulgence vs restraint
What addresses the degree to which a society allows relatively free gratification of basic drives related to enjoying life and having fun versus strict social norms that regulate and suppress gratification of needs and wants
indulgence- us, restraint- china
What is an example of a indulgence country and restraint country
tarrif
What is a direct tax on imported goods
non tariff
What are non tax methods of increasing the cost or reducing the volume of imported goods
quotas, voluntary export restraints, government important standards, subsidies, customs classification
What are examples of non tariff barriers
quota
What is specific limits on the number or volume of imported products
voluntary export restraints, exporting country rather than the importing country imposes restraints
What limit the amount of product that can be imported annually, who normally impose these
government import standards
What are established to protect the health and safety of all citizens, are often used to restrict or ban imported goods
subsidies
What are long term long interest loans, cash grants, and tax deferments to develop and protect companies in a specific industry
customs classifications
What are a classification assigned to imported products by government officials that affects the size of the tariff and the imposition of import quotas
us market place is the third most competitive in the world, it is the easiest for foreign companies to enter, although some us industries have been heavily protected from foreign competitors by trade barriers ,for the most part consumers have have many choices among american made and foreign made products. the high level of competition keeps prices low in the us, compared to other countries that have not been as open to foreign companies and products. Free trade agreements increases choices, competition, and purchasing power and decreases what people pay for things. Free trade agreements create new business opportunities, they also intensify competition, and addressing that competition is a managers job
What do trade barriers and trade matter to managers?
Growing markets, choosing and office/manufacturing location, and minimizing political risk
What are the three characteristics of finding the best business climate
access to a growing market
The most important factor in an attractive business climate is
purchasing power and foreign competitors
what are two factors that help companies determine the growth potential of foreign markets
good choices for companies looking for attractive global markets
Countries with high and growing levels of purchasing power are
foreign competitors
What is determined by the number and quality of of companies that already compete in a foreign market
commitment to grow in a new market
Some foreign offices are established through global mergers and acquisitions, and some are established because of a
establish an office or manufacturing location in each country they enter, they can license, franchise, or export to foreign markets
companies do not have to
tax haven or as part of creating a global brand
other companies choose locations by seeking a
qualitative and quantitative factors
Rather than focusing on cost alone, companies should also consider
workforce quality and company strategy
what are the two components of qualitative
workforce quality
what is important because it is often difficult to find workers with the specific skills, abilities, and experience that a company needs to run its business
company strategy
A company pursuing a low cost strategy might need plentiful raw materials, low cost transportation, and low cost labor an example of
quantitative factors
What is the kind of facility being built, tariff and non tariff barriers, exchange rates, and transportation/ labor costs an example of
political uncertainty and policy uncertainty
When companies conduct global business, they should attempt to identify two kinds of political risk
political uncertainty
What is associated with the risk of of major changes in political regimes that can result from war, revolution, death of political leaders, social unrest, or other influential leaders
policy uncertainty
What refers to the risk associated with changes in laws and government policies that directly affect the way foreign companies conduct business
political risk inherent in global business
Several strategies can be used to minimize or adapt to the
avoidance strategy
what is used when the political risk associated with a foreign country or region are viewed as too great
control
what is an active strategy to prevent or reduce political risks, they lobby foreign governments or international trade agencies ti change laws, regulations, or trade barriers that hurt their business in that country
Cooperation
which involves using joint ventures and collaborative contracts, such as franching and licensing, example creating a company in china, that is 51% owned by the Chinese
language and cross cultural training and spouse, family, and dual career issues
What are the two parts of preparing for an international assignment
expatriate
who is someone who lives and works outside her or his native country
adjusting to language, culture, and social differences
what is the primary failure of expatriates
8-25%
What is the percentage of people who leave their company after an international assignment
5-20%
What is the percentage of americans that go on an international assignment and return before it is finished
1/3
What is the amount of people who were judged by their company to be no better than marginally effective after finishing
the uncertainty about the way they feel, misunderstandings with natives, and the inappropriate behaviors that they unknowingly committee when they travel
predepature language and cross culture training can reduce
adjust quicker to foreign cultures and perform better
Expatriates who receive pre departure training
1/3 , 1/2
How many people are offered training and how many people take it
documentary training
what focuses on identifying specific critical differences between cultures
cultural simulations
What is the training in which employees practice adapting to cultural differences, using video clips and audio to present real world situations
field stimulation training
what is a technique made popular by the us peace corps places trainees in an ethnic neighborhood for three to four hours to talk to residents about cultural differences
spouse and family adjustment to the foreign culture
What is the most important factor in determining the success or failure of an international assignment
adaptability
what is used to assess how well managers and their families are likely to adjust to foreign cultures
40%
what percent of families receive training
mongrel- zachary article
What is a person comfortable in multiple cultures
we need to emerge ourself in other cultures to understand it, we need to have an appreciation for our culture and other cultures
Why is being a mongrel important
effective Mission
What should be enduring, represent who you are now and want you want to be in the future, it should be brief, needs to be clear and inspirational and consistent with widely shared beliefs and values
family owned, starting new, buying existing, buying a franchise
What are the four ways to get into business
starting new
What is a great idea for a product/service that doesn’t not exist and you are wanting to star on your own
buy existing
what is when you see a business that you want to get into, lots of accountants do this
franchise
What is the easiest way to get into a business, buying into something with a known representation
equity, debt, and awards from competitions
What are three ways to get funding for your business
equity
What is very common, investors give funds in exchange for shares, no expectation of future payback, you dont technically own 100% of your company
debt
what is where you go to the bank and take out a loan, creditors give you money with expected payback and interest, when you’re done paying it back off, you own 100% of your company
proprietorship/partnership, corporation ( c corp), subchapter (s corp), Limited liability company (llc)
What are the four basic types of legal ownership
proprietorship/ partnership
What is a company that you own by yourself or with a partner, profits are a part of your personal income, you are personally liable for business debts, when the owner dies the business dies, not protected from liability
Corportation
What is a separate legal entity for a business, you can enter into contacts (which enters into lives of their own), can be sued, continues to exist after death of owners, profits are faces twice ( taxed at the corporate level and faced if you’re a shareholder and you get paid dividends), owners aren’t liable for anything, assets of business are separate from owners assets
subchapter s corp
what is a corporation for liability, profits are passed through owners, taxed once, lots of laws and regulations
limited liability corp (llc)
What is not a corporation, much cheaper, still protects you from liability, profits passed through owners, taxed as personal income
how/when earnings are taxed, and liability for debts
What is the main differences between the types of businesses
corporate earnings are taxed twice
The main disadvantage of organizing as a corporation is
you need a great oral presentation and compelling written story, business plans can be counter productive, they waste time. you need to focus on key hands on tasks that are more likely to impress investors
What were the key ideas behind burn your business plan
setting goals, developing commitment to goals, developing effective action plans, tracking process, and maintaining flexibility
What are the five steps to making a plan that works
action plan
what lists the specific steps, people, resources, and time period for accomplishing a goal
proximal goals
what are short term goals or subgoals
distal goals
what are long term or primary goals
options based planning
what is maintaining flexibility by making small, simultaneous investments in many alternative plans
slack resources
What are a cushion of extra resources that can be used with options based planning to adapt to unanticipated changes, problems, or opportunities
strategic goals, top management
What make clear how the company will serve customers and position itself against competitors in the next two to five years? who is responsible for this
strategic objective, top
what is a more specific goal that unifies company wide efforts, stretches, and challenges the organization, and possesses a finish line and time frame, who is responsible, specifies who, what, when, and how
tactical plans, middle
what specify how a company will use resources, budgets, and people to accomplish specific goals related to its strategic objective for the next 5 years? These are used to direct behavior, efforts, and attention for the next 6 months to two years..who is responsible?
management by objectives
what is a four step process in which managers and their employees discuss possible goals, select goals that are challenging, attainable, and consistent with goals, develop tactical plans and objectives, and meet regularly to review progress
operational plans
what are day to day plans developed and implanted by lower level managers, for producing or delivering the organization’s products and services over a 30 day to 6 month period
single use plan, lower level mangers
what deal with unique one time events, who is responsible for it
policies
What indicate the general course of action that company managers should take in response to a particular event or situation
procedures
What are more specific than policies because they indicate a series of steps that should be taken in response to a particular event
rules and regulations
What are even more specific than procedures because they specify what must happen or not happen. They define precisely how a particular action should be performed
budgeting
what is quantitative planning because it forces managers to decide how to allocate available money to best accomplish company goals
define the problem, identify decision criteria, weigh the criteria, generate alternative courses of action, evaluate each alternative, compute the optimal decision
What are the steps in rational decision making?
rational decision making
what is a systematic process in which managers define problems, evaluate alternatives, and choose optimal solutions that provide maximum benefits to their organizations
decision criteria
what are the standards used to guide judgments and decisions
absolute comparison
what are which each criterion is compared with a standard or is ranked on its own merit
relative comparison
what is when each criterion is compared directly with every other criterion
multiplying the rating for each by the weight for each category, and then summing them
how do you compute the rating
nominal group technique
what is a decision making method that begins and ends by having group members quietly write down and evaluate ideas to be shared with the group
delphi technique
what is a decision making method in which members of a panel of experts respond to questions and each other until reaching agreement on an issue
valuable, rare, imperfectly imitated, non substitutable
What must you do to sustain a competitive advantage
sustainable competitive advantage
a competitive advantage becomes what when other companies cannot duplicate the value a firm is providing to customers
competitors have tried unsuccessfully to replicate it and stopped trying to replicate it for the moment
a competitive advantage is sustained if
valuable
what allow companies to improve their efficiency and effectiveness
rare
what is a resource that is not controlled or posed by many competing firms
imperfectly imitable
what is a resource that is impossible or extremely costly or difficult for other firms to duplicate
non substitutable resources
what is a resource that produces value or competitive advantage and has no equivalent
situational analysis
What can also help managers determine the need for strategic change
portfolio strategy
what is a corporate level strategy that minimizes the risk by diversifying investment among various businesses or product lines
bcg matrix
What is a portfolio strategy developed by the boston consulting firm that categorizes a corporations business by growth rate and relative market share and helps managers decide how to invest corporate funds
unrelated diversification
what is creating or acquiring companies in completely unrelated businesses
stars, question marks, cash cows, dogs
what are the four categories in the bcg matrix
stars
What are companies that have a large share in a fast growing market
question marks
What are companies that have a smalls share in a large growing market
cash cows
What are companies that have a large share in a slow moving market
dogs
what are companies that have a small share of a small growing market
growth, stability, retrenchment
What are the three grand strategies
growth strategy
What focuses on increasing profits, revenues, market share, or number of places to do business
stability
What focuses on improving the way the company sells the same product or services to the same customer
retrenchment strategy
What focuses on turning around very poor company performance by shrinking the size or scope of the business
cost leadership, differentiation, cost focus, focused differentiation
What are the three industry positioning strategies
cost leadership
What strategy is where all you care about is being the low cost provider
differentiation
What making your product or service different so that customers are willing to pay extra for the service or goods, they’re unique
focus strategy
What produces a unique service, for a limited market, that competitors have overlooked
cost focus
What is where you are worried about cost, but also have a narrow target market
focused differentiation
What is where your focused on having a unique product, but have a narrow target market
strategic moves in direct competition
What are attacks and responses in red ocean
entrepreneurship
What is where you move away from the sharks, a place where no one is doing business in the blue ocean, eventually they will show up
value curve
What is a tool you use when our are trying to enter an industry where you look where your competitors are in comparison to you
ensure that activities are providing desired results, get the job done despite obstacles and uncertainties
What is the purpose of control
set standards, measure performance, compare with standards, identify deviations, analyze deviations, take corrective action. Repeat if needed
What is the process control
characteristics of service provision
Customers participate, services are consumed immediately, services are provided where an when the customer desires, services tend to be labor intensive, services are intangible are all
reliability (most important), assurance, tangibles, empathy, responsiveness
What are the four provisions of quality in service provisions
reliability
What is delivering the services as promised, right and on time
assurance
what is making them feel safe in the transaction
tangibles
what are the things they see when they show up, old ratty equipment and uniforms
empathy
what is the fact that they care about my problem
responsiveness
what is that the show that they will go out of their way to make their customers happy
feedforward, concurrent, and feedback
What are the three types of control
feedforward
what is monitoring inputs and anticipating and preventing problems
concurrent
what is monitoring progress adjusting ongoing activities
feedback
what is monitoring products and learning from past mistakes
bureaucratic, objective, normative, concertive, and self
What are the 5 methods of control
bureaucratic
What is control that specify large amounts of rules between acceptable and unacceptable, top down control, rewards and punishments whether people follow rules
Objective
what is an observable measure of output, want you to obtain that performance, don’t care how you do it, more concerned with results, not concerned how they are obtained
normative
What is standards are set about what peoples values and beliefs should be that guide behavior, cohesive culture, hire employees that share those values. Example- Nordstrom
concertive
What is control where groups set standards that will guide the behavior for themselves
self
What is control where you set standards for yourself that will guide your own behavior
budgets
what are used to project costs and revenues, prioritize and control spending, indenture that expense dont exceed available funds and revenues
performance report
what is the report of your actual performance
important that you analyze
When you miss the budget it is
balanced scorecard
What encourages managers to look beyond such traditional financial measures to four different perspectives on company performance
how do customers see us (customer), at what must we excel (internal), can we continue to improve and create value (innovative and learning) , how do we look to shareholders (financial)?
What questions are asked on the balance score card?
economic value added
What is the amount by which company profits exceed the cost of capital in a given year
net operating profit, identify how much capital the company has invested (spent),determine the cost paid for capital (rate), multiply capital used times cost of capital, subtract the total dollar cost of capital from net profit after taxes
What are the components of EVA
technology cycle
what 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, better technology
s curve
What is a pattern of technological innovation characterized by slow initial progress, then rapid process, and then slow progress again as technology matures and reaches its limit
knowledge, tools, and techniques of a field or discipline
a technology cycle occurs whenever there are major advances or changes in
connected
planning and controlling should be
pert network
What do you use if you’re estimating the time needed to complete a project and you’ve never used it before
project management tool used to schedule, organize, and coordinate tasks within a project
A PERT chart is a
Program Evaluation Review Technique,
PERT stands for
(time optimistic + 4(time most likely) + time pessimistic)/6
The formula for pert is
graphical illustration of a schedule that helps to plan, coordinate, and track specific tasks in a project.
Gantt chart provides a
innovation
What is a new idea, method, or device
change
What is to make the form, nature, content, future course of something different from what it is or from what it would be if left alone
experiential (discontinuous)
What type of innovation is good for uncertain environments, intuition, flexibility, the goal is a new product/service
compression (incremental)
What is good for certain environments, a series of steps, its goal is faster/cheaper
vcr to dvd connector
example of experiential
new iphone
example of compression
traditional planning and control processes
compression can be managed primarily through
deliberate creation of creative work environments and testing
experiential can be planned through
encouragement, challenge, lack of impediments, freedom
What are the 4 components of creative environments
expertise and postive moods
What are two other factors that help create creative environments
self interest, misunderstanding and distrust, general intolerance
why is change so hard?
unfreeze, change, freeze
What are the three components of change from Levin’s change model
10 percent
from the change or die article, what percent of people actually change their lifestyle two years after heart bypass surgery
unfreeze
What stage of the change model do you educate people and make them aware that change is needed
change
what stage is where you do a change intervention, it is a period of frustration and confusion
refreeze
What is were people have a new mindset, can’t let them slide back to the old way
connect to postive emotions, sympathize with them, have to have mild posts along the way, have short term wins
What do you do when employees resist change
not establishing a great enough sense of urgency, not creating a powerful enough coalition (there has to be enough people that support it), not creating a core change coalition, lacking a vision, undercommunication the vision by a factor of ten, not removing obstacles for the new visions, not systematically planning for and creating short term wins, declaring victory too soon, not anchoring changes in the corporations culture
What errors do managers make
large system, small group, person focused
What are three types of organizational development interventions
large system
what organizational development has the purpose to change the character and performance of an organization, business unit, or department
small group
What organizational develop has the purpose of assessing how a group functions and helping it work more effectively to accomplish its goals
personal focused interventions
What organizational function is intended to increase interpersonal effectiveness by helping people to become aware of their attributes and behaviors and to acquire new skills and knowledge
sociotechnical systems and survey feedback
two examples of large system interventions are
team building, unit goal setting
two examples of small group are
counseling and training
two examples of person focused
departmentalization
What is the grouping of related activities or processes into major units
functional departmentalization
What organizes work and workers into separate units responsible for particular business functions or areas of expertise
each of these are specialized, know what they do, and are great at it
What are the benefits of functional
coordination across departments, decision making is slower
What are the disadvantages of functional
product departmentalization
what is organizing work and workers into separate units responsible for producing particular products or services
experts at understanding products, can see how well they are doing, faster decisions
What is the advantages of product
redundancy, costs, can’t standardize policies, difficult to coordinate against products
What is the disadvantages of product
customer
What organizes work and workers into separate units responsible for particular kids of customers
focuses on serving customers, flexible to their needs
What is the benefits of customer
redundancy, difficult to coordinate
What is the disadvantages of customers
geographic
what is organizing work and workers into separate units responsible for doing business in particular geographic areas
they respond to the demands of different markets, know how to serve those customers, located closer to the customers
what is the advantage of geographic
redundancy, move overhead, more salary costs, difficult to coordinate different departments
what is the disadvantages of geographic
matrix
What is a combination of departments
can complete large tasks, lots of interactions
What is the advantages of matrix
notorious for confusion, which boss to listen to
What is the disadvantage of matrix
work is done by specialist
What would be a benefit of organizing by function?
slow decision making
what would be a drawback of organizing by function?
span of control
what is the number of people who report to a manager
tall organizations
narrow spans of control create
flat organizations
wider spans of control create
narrow
What is only managing two or three people, oversight is high, autonomy is low, overhead higher, mangers workload is fairly low
wider
What is not a lot of layers, not a large chain of management, faster decision making, very responsive to customer needs and trends, tend to be the new model for organization, save money, autonomy is high, overhead is low, mangers workload is higher
high managerial workload, more people to follow up on, more questions to answer
What would be a drawback of wide spans of control
there is no single best design for all companies and situations
What is contingency design
mechanistic and organic
What are two types of organizations
mechanistic
What are organizations that are slow to change, tall/vertical, better suited for slow fixed industries, change is incremental, use compression innovation
organic
What are organizations that are wide span, better suited for high innovation, operate in discontinuous change
chain of command
What is the vertical line of authority that clarifies who reports to whom throughout the organization
unity of command
what is a management principle that workers should report to just one boss
line authority
What is the right to command immediate subordinates in the chain of command
staff authority
What is the right to advise, but not command, others who are not subordinates in the chain of command
delegation of authority
what is the assignment of direct authority and responsibly to a subordinate to complete tasks for which the manger is normally responsible
the manger transfers full responsibility for the assignment to the subordinate. The second transfer that occurs is that the manger gives the subordinate full authority over the budget, resources, and personnel needed to do the job. The third is the transfer of accountability.
What are the three transfers that occur in delegation
centralization of authority
What is the location of most authority at the upper levels of organization. Managers make most decisions
decentralization
What is the location of a significant amount of authority in the lower levels of the organization, it has a high degree of delegation at all levels. Workers closest to the problems are authorized to make the decisions necessary.