Chapter 6 Managing the Business Entreprise

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management
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is the process of planning, organizing, leading, and controlling an enterprise’s financial, physical, human, and information resources achieve the organization’s goals of supplying various products and services
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effectiveness
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achieving the organizational goals that have been set
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efficiency
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achieving the greatest level of output with a given amount
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planning
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process of determining the firm’s goal’s and developing a strategy for achieving them
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prediction markets
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creating a market where people can buy “shares” in various answers to important questions that need to be answered
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strategic plans
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set up by top management; reflect decisions about resource allocations, company priorities, and the steps needed to meet strategic goals
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tactical plans
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shorter range plans concerned with implementing specific aspects of the company’s strategic plans. Typically involve upper and middle management
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operational plans
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plans developed by middle and lower level managers that set short term targets for daily, weekly, or monthly performance
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organizing
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mobilizing the resources that are required to complete a particular task
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leading
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also known as directing involves the interactions between managers and their subordinates as they both work to meet the firm’s objectives
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controlling
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the process of monitoring a firm’s performance to make sure that it is meetings its goals
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top managers
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those managers responsible for a firm’s overall performance and effectiveness and for developing long range plans for the company
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middle managers
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those managers responsible for implementing the decisions made by top managers
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first line managers
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those managers responsible for supervising the work of employees
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operations manager
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responsible for the production systems that create goods and services
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human resource managers
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provide assistance to other managers when hiring employees, training them, evaluating their performances, and determining their compensation level
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information managers
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responsible for designing and implementing systems that gather, process, and disseminate information
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marketing managers
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responsible for products and services to buyers
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financial managers
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plan and oversea its financial resources
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technical skills
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skills associated with performing specialized tasks understand skills within a company
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human relations skills
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skills that enable managers to understand and get along with other people
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conceptual skills
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a person’s ability to think in abstract, to diagnose and analyze different situations, and to see beyond the present situation
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time management skills
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the productive use that managers make of their time
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decision making
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choosing alternative from among several options
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decision making skills
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skills in defining problems and selecting the best courses of action
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problem decision
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a decision that is necessary when actual results do not conform to those expected
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opportunity decision
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taking new initiatives or doing a current activity more effectively even if no problem exists
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organizational politics
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the actions that people take as they try to get what they want
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intuition
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an “inner sense” or “hunch” usually based on years of experience and practice in making decisions in similar situations
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escalation of commitment
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when a manager makes a decision and then remains committed to its implementation in spite of clear evidence that it was a bad decision
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risk propensity
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how much a manager is willing to gamble when making decisions
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strategic management
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the process of aligning the organization with its external environment
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strategic goals
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the overall objectives that a business wants to achieve
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strategy
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the broad set of organizational plans for implementing the decisions made for achieving organizational goals
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goals
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performance targets, the means by which organizations and their managers measure success or failure at every level
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mission statement
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an organization’s statement of how it will achieve its purpose in the environment in which it conducts its business
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long term goals
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goals set for extended periods of time, typically five years or more into the future
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intermediate goals
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goals set for a period of time from 1 – 5 years
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short term goals
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goals set for the very near future typically less than one year
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SMART goals
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goals that are specific, measurable, achievable, relevant, and time framed
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strategy formulation
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creation of a broad program for defining and meeting an organization’s goals
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SWOT analysis
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identification and analysis of organizational strengths and weaknesses and environmental opportunities and threats as part of strategy formulation
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organizational analysis
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the process of analyzing a firm’s strengths and weaknesses
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environmental analysis
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the process of scanning the environment for threats and opportunities
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corporate level strategy
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identifies the various business that a company will be in and how these businesses will relate to each other
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business level (competitive) strategy
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identifies the ways a business will compete in its chosen line of products or services
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functional strategies
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Identify the basic course of action that each department in the firm will pursue so that it contributes to the attainment of the business’s overall goals
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concentration strategy
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focusing the company on one product or product line
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market penetration
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boosting sales of present products by more aggressive selling in the firm’s current markets
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product development
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developing improved products for current markets
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geographic expansion
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expanding operations in new geographic areas or countries
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horizontal integration
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acquiring control of competitors in the same or similar markets with the same or similar products
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vertical integration
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owning or controlling the inputs to the firm’s processes and /or the channels through which the products or services are distributed
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diversification
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expanding into related or unrelated products or market segments
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investment reduction
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reducing the company’s investment in one or more of its lines of business
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cost leadership
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becoming the low-cost leader in an industry
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differentiation strategy
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a firm seeks to be unique in its industry along some dimension that is valued by buyers
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focus strategy
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selecting a market segment and serving the customers in the market niche better than competitors
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contingency planning
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identifying aspects of a business or its environment that might entail changes in strategy
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crisis management
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an organization’s plans for dealing with emergencies that require an immediate response
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corporate culture
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shared experiences, stories, beliefs, norms and ethical stance that characterize an organization

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