Management Midterm 2 – Flashcards
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globalization forces a
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shrinking globe
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what are examples of globalization
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modern communication technology, air travel, and corporate globalism
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What is the tendency of firms to expand sales, technology, and ownership to new market in other countries
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globalization
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What are the pros of globalization
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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
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What are the cons of globalization
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millions of americans lose jobs, fear of losing jobs if company has global competition, pay cut demands, companies threat to to transfer jobs
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What are the stages of the internalization process
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stage 1- exporting, stage 2- cooperative contracts, stage 3- strategic alliances, stage 4-wholly owned affiliates. Also global new ventures
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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
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cooperative contracts
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What are the two types of cooperative contracts
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licensing and franchising
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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
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licensing
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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
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franchising
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What is when two companies combine resources, share profits and risk failures, and have equal ownership
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Strategic alliances
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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
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wholly owned affiliates
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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
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global new ventures
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What is the problem at mustang jeans
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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.
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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
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High context culture
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What is an example of a high context culture
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Brazil and Japanese
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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
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Low context cultures
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What is an example of a low context culture
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american culture
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Who argues that the world is flat
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Thomas friedman
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What is Thomas Friedman's argument
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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
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What is an important part of global management
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cultural differences
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good companies
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prepare you for global business
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What are the two parts of just how flat is the world?
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culture and trade
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What are business operation in more than one country
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multinational
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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
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NAFTA
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If companies dont follow the phase model, they
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create new global ventures
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What are the four things you should be aware of when deciding where to do business
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economic, legal/political, sociocultural, and technology
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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
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economic
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What legal protections are there to make business possible... are all questions relating to
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legal/politcal
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Demogrpahic characteristics, attitudes of customer base, quality potential workforce, language barriers, work experience needed to run a business.. are all questions relating to
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sociocultural
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Not every country has the resources to make your service or good valuable.. are all questions relating to
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Technological
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even though you can innovate from anywhere, its happening
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in other places (the world is spiky)
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What is a populations taken for granted assumptions, values, beliefs, symbols that foster patterned behavior
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culture
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Straightforward, bold, wanted to get straight to business is the characteristics of what culture
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American
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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?
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power distance, individualism, masculinity, uncertainty avoidance, short term versus long term orientation, and indulgence vs restraint
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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
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power distance
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an example of a low power distance country is
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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
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an example of a high power distance country is
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china, they wait for authority
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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
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Individualism
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What is an example of a country that is very individualistic
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us
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What is an example of a country that is collectivistic
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china, indonesia
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What capture the differences between highly assertive and highly nurturing cultures
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masculinity vs femininity
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What cultures emphasize assertivness, competition, material success, and achievement
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masculine
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What cultures emphasize the importance of relationship, modesty, caring for the weak, and quality of life
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feminine
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What is an example of a masculine culture
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china and japan
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What is an example of a feminine culture
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netherlands
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What is the degree to which people in a country are uncomfortable with unstructured, ambitious, unpredictable situations
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uncertainty avoidance
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Is a characteristic of us a uncertainty avoidance
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no
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What addresses whether cultures are oriented to the present and seek immediate gratification or to the future and defer gratification
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short term/long term orientation
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Countries that are short term are more
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consumer driven
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Countries that are long term are more
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savings driven
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An example of a short term and a long term culture is
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short term- us , long term- china
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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
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indulgence vs restraint
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What is an example of a indulgence country and restraint country
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indulgence- us, restraint- china
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What is a direct tax on imported goods
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tarrif
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What are non tax methods of increasing the cost or reducing the volume of imported goods
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non tariff
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What are examples of non tariff barriers
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quotas, voluntary export restraints, government important standards, subsidies, customs classification
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What is specific limits on the number or volume of imported products
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quota
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What limit the amount of product that can be imported annually, who normally impose these
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voluntary export restraints, exporting country rather than the importing country imposes restraints
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What are established to protect the health and safety of all citizens, are often used to restrict or ban imported goods
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government import standards
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What are long term long interest loans, cash grants, and tax deferments to develop and protect companies in a specific industry
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subsidies
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What are a classification assigned to imported products by government officials that affects the size of the tariff and the imposition of import quotas
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customs classifications
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What do trade barriers and trade matter to managers?
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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
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What are the three characteristics of finding the best business climate
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Growing markets, choosing and office/manufacturing location, and minimizing political risk
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The most important factor in an attractive business climate is
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access to a growing market
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what are two factors that help companies determine the growth potential of foreign markets
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purchasing power and foreign competitors
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Countries with high and growing levels of purchasing power are
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good choices for companies looking for attractive global markets
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What is determined by the number and quality of of companies that already compete in a foreign market
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foreign competitors
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Some foreign offices are established through global mergers and acquisitions, and some are established because of a
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commitment to grow in a new market
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companies do not have to
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establish an office or manufacturing location in each country they enter, they can license, franchise, or export to foreign markets
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other companies choose locations by seeking a
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tax haven or as part of creating a global brand
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Rather than focusing on cost alone, companies should also consider
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qualitative and quantitative factors
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what are the two components of qualitative
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workforce quality and company strategy
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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
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workforce quality
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A company pursuing a low cost strategy might need plentiful raw materials, low cost transportation, and low cost labor an example of
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company strategy
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What is the kind of facility being built, tariff and non tariff barriers, exchange rates, and transportation/ labor costs an example of
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quantitative factors
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When companies conduct global business, they should attempt to identify two kinds of political risk
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political uncertainty and policy uncertainty
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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
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political uncertainty
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What refers to the risk associated with changes in laws and government policies that directly affect the way foreign companies conduct business
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policy uncertainty
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Several strategies can be used to minimize or adapt to the
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political risk inherent in global business
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what is used when the political risk associated with a foreign country or region are viewed as too great
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avoidance strategy
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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
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control
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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
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Cooperation
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What are the two parts of preparing for an international assignment
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language and cross cultural training and spouse, family, and dual career issues
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who is someone who lives and works outside her or his native country
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expatriate
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what is the primary failure of expatriates
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adjusting to language, culture, and social differences
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What is the percentage of people who leave their company after an international assignment
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8-25%
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What is the percentage of americans that go on an international assignment and return before it is finished
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5-20%
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What is the amount of people who were judged by their company to be no better than marginally effective after finishing
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1/3
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predepature language and cross culture training can reduce
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the uncertainty about the way they feel, misunderstandings with natives, and the inappropriate behaviors that they unknowingly committee when they travel
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Expatriates who receive pre departure training
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adjust quicker to foreign cultures and perform better
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How many people are offered training and how many people take it
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1/3 , 1/2
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what focuses on identifying specific critical differences between cultures
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documentary training
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What is the training in which employees practice adapting to cultural differences, using video clips and audio to present real world situations
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cultural simulations
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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
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field stimulation training
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What is the most important factor in determining the success or failure of an international assignment
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spouse and family adjustment to the foreign culture
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what is used to assess how well managers and their families are likely to adjust to foreign cultures
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adaptability
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what percent of families receive training
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40%
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What is a person comfortable in multiple cultures
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mongrel- zachary article
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Why is being a mongrel important
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we need to emerge ourself in other cultures to understand it, we need to have an appreciation for our culture and other cultures
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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
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effective Mission
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What are the four ways to get into business
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family owned, starting new, buying existing, buying a franchise
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What is a great idea for a product/service that doesn't not exist and you are wanting to star on your own
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starting new
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what is when you see a business that you want to get into, lots of accountants do this
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buy existing
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What is the easiest way to get into a business, buying into something with a known representation
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franchise
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What are three ways to get funding for your business
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equity, debt, and awards from competitions
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What is very common, investors give funds in exchange for shares, no expectation of future payback, you dont technically own 100% of your company
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equity
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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
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debt
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What are the four basic types of legal ownership
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proprietorship/partnership, corporation ( c corp), subchapter (s corp), Limited liability company (llc)
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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
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proprietorship/ partnership
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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
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Corportation
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what is a corporation for liability, profits are passed through owners, taxed once, lots of laws and regulations
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subchapter s corp
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What is not a corporation, much cheaper, still protects you from liability, profits passed through owners, taxed as personal income
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limited liability corp (llc)
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What is the main differences between the types of businesses
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how/when earnings are taxed, and liability for debts
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The main disadvantage of organizing as a corporation is
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corporate earnings are taxed twice
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What were the key ideas behind burn your business plan
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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
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What are the five steps to making a plan that works
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setting goals, developing commitment to goals, developing effective action plans, tracking process, and maintaining flexibility
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what lists the specific steps, people, resources, and time period for accomplishing a goal
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action plan
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what are short term goals or subgoals
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proximal goals
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what are long term or primary goals
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distal goals
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what is maintaining flexibility by making small, simultaneous investments in many alternative plans
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options based planning
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What are a cushion of extra resources that can be used with options based planning to adapt to unanticipated changes, problems, or opportunities
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slack resources
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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
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strategic goals, top management
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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
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strategic objective, top
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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?
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tactical plans, middle
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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
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management by objectives
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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
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operational plans
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what deal with unique one time events, who is responsible for it
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single use plan, lower level mangers
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What indicate the general course of action that company managers should take in response to a particular event or situation
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policies
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What are more specific than policies because they indicate a series of steps that should be taken in response to a particular event
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procedures
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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
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rules and regulations
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what is quantitative planning because it forces managers to decide how to allocate available money to best accomplish company goals
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budgeting
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What are the steps in rational decision making?
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define the problem, identify decision criteria, weigh the criteria, generate alternative courses of action, evaluate each alternative, compute the optimal decision
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what is a systematic process in which managers define problems, evaluate alternatives, and choose optimal solutions that provide maximum benefits to their organizations
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rational decision making
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what are the standards used to guide judgments and decisions
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decision criteria
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what are which each criterion is compared with a standard or is ranked on its own merit
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absolute comparison
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what is when each criterion is compared directly with every other criterion
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relative comparison
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how do you compute the rating
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multiplying the rating for each by the weight for each category, and then summing them
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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
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nominal group technique
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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
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delphi technique
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What must you do to sustain a competitive advantage
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valuable, rare, imperfectly imitated, non substitutable
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a competitive advantage becomes what when other companies cannot duplicate the value a firm is providing to customers
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sustainable competitive advantage
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a competitive advantage is sustained if
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competitors have tried unsuccessfully to replicate it and stopped trying to replicate it for the moment
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what allow companies to improve their efficiency and effectiveness
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valuable
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what is a resource that is not controlled or posed by many competing firms
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rare
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what is a resource that is impossible or extremely costly or difficult for other firms to duplicate
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imperfectly imitable
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what is a resource that produces value or competitive advantage and has no equivalent
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non substitutable resources
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What can also help managers determine the need for strategic change
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situational analysis
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what is a corporate level strategy that minimizes the risk by diversifying investment among various businesses or product lines
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portfolio strategy
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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
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bcg matrix
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what is creating or acquiring companies in completely unrelated businesses
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unrelated diversification
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what are the four categories in the bcg matrix
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stars, question marks, cash cows, dogs
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What are companies that have a large share in a fast growing market
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stars
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What are companies that have a smalls share in a large growing market
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question marks
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What are companies that have a large share in a slow moving market
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cash cows
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what are companies that have a small share of a small growing market
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dogs
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What are the three grand strategies
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growth, stability, retrenchment
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What focuses on increasing profits, revenues, market share, or number of places to do business
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growth strategy
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What focuses on improving the way the company sells the same product or services to the same customer
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stability
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What focuses on turning around very poor company performance by shrinking the size or scope of the business
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retrenchment strategy
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What are the three industry positioning strategies
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cost leadership, differentiation, cost focus, focused differentiation
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What strategy is where all you care about is being the low cost provider
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cost leadership
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What making your product or service different so that customers are willing to pay extra for the service or goods, they're unique
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differentiation
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What produces a unique service, for a limited market, that competitors have overlooked
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focus strategy
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What is where you are worried about cost, but also have a narrow target market
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cost focus
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What is where your focused on having a unique product, but have a narrow target market
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focused differentiation
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What are attacks and responses in red ocean
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strategic moves in direct competition
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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
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entrepreneurship
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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
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value curve
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What is the purpose of control
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ensure that activities are providing desired results, get the job done despite obstacles and uncertainties
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What is the process control
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set standards, measure performance, compare with standards, identify deviations, analyze deviations, take corrective action. Repeat if needed
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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
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characteristics of service provision
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What are the four provisions of quality in service provisions
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reliability (most important), assurance, tangibles, empathy, responsiveness
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What is delivering the services as promised, right and on time
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reliability
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what is making them feel safe in the transaction
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assurance
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what are the things they see when they show up, old ratty equipment and uniforms
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tangibles
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what is the fact that they care about my problem
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empathy
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what is that the show that they will go out of their way to make their customers happy
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responsiveness
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What are the three types of control
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feedforward, concurrent, and feedback
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what is monitoring inputs and anticipating and preventing problems
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feedforward
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what is monitoring progress adjusting ongoing activities
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concurrent
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what is monitoring products and learning from past mistakes
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feedback
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What are the 5 methods of control
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bureaucratic, objective, normative, concertive, and self
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What is control that specify large amounts of rules between acceptable and unacceptable, top down control, rewards and punishments whether people follow rules
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bureaucratic
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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
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Objective
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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
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normative
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What is control where groups set standards that will guide the behavior for themselves
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concertive
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What is control where you set standards for yourself that will guide your own behavior
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self
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what are used to project costs and revenues, prioritize and control spending, indenture that expense dont exceed available funds and revenues
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budgets
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what is the report of your actual performance
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performance report
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When you miss the budget it is
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important that you analyze
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What encourages managers to look beyond such traditional financial measures to four different perspectives on company performance
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balanced scorecard
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What questions are asked on the balance score card?
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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)?
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What is the amount by which company profits exceed the cost of capital in a given year
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economic value added
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What are the components of EVA
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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
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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
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technology cycle
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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
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s curve
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a technology cycle occurs whenever there are major advances or changes in
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knowledge, tools, and techniques of a field or discipline
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planning and controlling should be
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connected
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What do you use if you're estimating the time needed to complete a project and you've never used it before
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pert network
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A PERT chart is a
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project management tool used to schedule, organize, and coordinate tasks within a project
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PERT stands for
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Program Evaluation Review Technique,
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The formula for pert is
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(time optimistic + 4(time most likely) + time pessimistic)/6
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Gantt chart provides a
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graphical illustration of a schedule that helps to plan, coordinate, and track specific tasks in a project.
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What is a new idea, method, or device
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innovation
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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
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change
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What type of innovation is good for uncertain environments, intuition, flexibility, the goal is a new product/service
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experiential (discontinuous)
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What is good for certain environments, a series of steps, its goal is faster/cheaper
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compression (incremental)
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example of experiential
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vcr to dvd connector
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example of compression
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new iphone
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compression can be managed primarily through
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traditional planning and control processes
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experiential can be planned through
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deliberate creation of creative work environments and testing
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What are the 4 components of creative environments
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encouragement, challenge, lack of impediments, freedom
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What are two other factors that help create creative environments
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expertise and postive moods
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why is change so hard?
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self interest, misunderstanding and distrust, general intolerance
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What are the three components of change from Levin's change model
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unfreeze, change, freeze
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from the change or die article, what percent of people actually change their lifestyle two years after heart bypass surgery
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10 percent
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What stage of the change model do you educate people and make them aware that change is needed
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unfreeze
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what stage is where you do a change intervention, it is a period of frustration and confusion
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change
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What is were people have a new mindset, can't let them slide back to the old way
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refreeze
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What do you do when employees resist change
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connect to postive emotions, sympathize with them, have to have mild posts along the way, have short term wins
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What errors do managers make
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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
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What are three types of organizational development interventions
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large system, small group, person focused
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what organizational development has the purpose to change the character and performance of an organization, business unit, or department
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large system
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What organizational develop has the purpose of assessing how a group functions and helping it work more effectively to accomplish its goals
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small group
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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
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personal focused interventions
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two examples of large system interventions are
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sociotechnical systems and survey feedback
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two examples of small group are
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team building, unit goal setting
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two examples of person focused
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counseling and training
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What is the grouping of related activities or processes into major units
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departmentalization
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What organizes work and workers into separate units responsible for particular business functions or areas of expertise
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functional departmentalization
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What are the benefits of functional
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each of these are specialized, know what they do, and are great at it
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What are the disadvantages of functional
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coordination across departments, decision making is slower
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what is organizing work and workers into separate units responsible for producing particular products or services
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product departmentalization
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What is the advantages of product
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experts at understanding products, can see how well they are doing, faster decisions
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What is the disadvantages of product
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redundancy, costs, can't standardize policies, difficult to coordinate against products
question
What organizes work and workers into separate units responsible for particular kids of customers
answer
customer
question
What is the benefits of customer
answer
focuses on serving customers, flexible to their needs
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What is the disadvantages of customers
answer
redundancy, difficult to coordinate
question
what is organizing work and workers into separate units responsible for doing business in particular geographic areas
answer
geographic
question
what is the advantage of geographic
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they respond to the demands of different markets, know how to serve those customers, located closer to the customers
question
what is the disadvantages of geographic
answer
redundancy, move overhead, more salary costs, difficult to coordinate different departments
question
What is a combination of departments
answer
matrix
question
What is the advantages of matrix
answer
can complete large tasks, lots of interactions
question
What is the disadvantage of matrix
answer
notorious for confusion, which boss to listen to
question
What would be a benefit of organizing by function?
answer
work is done by specialist
question
what would be a drawback of organizing by function?
answer
slow decision making
question
what is the number of people who report to a manager
answer
span of control
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narrow spans of control create
answer
tall organizations
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wider spans of control create
answer
flat organizations
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What is only managing two or three people, oversight is high, autonomy is low, overhead higher, mangers workload is fairly low
answer
narrow
question
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
answer
wider
question
What would be a drawback of wide spans of control
answer
high managerial workload, more people to follow up on, more questions to answer
question
What is contingency design
answer
there is no single best design for all companies and situations
question
What are two types of organizations
answer
mechanistic and organic
question
What are organizations that are slow to change, tall/vertical, better suited for slow fixed industries, change is incremental, use compression innovation
answer
mechanistic
question
What are organizations that are wide span, better suited for high innovation, operate in discontinuous change
answer
organic
question
What is the vertical line of authority that clarifies who reports to whom throughout the organization
answer
chain of command
question
what is a management principle that workers should report to just one boss
answer
unity of command
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What is the right to command immediate subordinates in the chain of command
answer
line authority
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What is the right to advise, but not command, others who are not subordinates in the chain of command
answer
staff authority
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what is the assignment of direct authority and responsibly to a subordinate to complete tasks for which the manger is normally responsible
answer
delegation of authority
question
What are the three transfers that occur in delegation
answer
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.
question
What is the location of most authority at the upper levels of organization. Managers make most decisions
answer
centralization of authority
question
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.
answer
decentralization
