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Social Values, Law & Politics, Demographics, Technology

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Components of the Macro Environment

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Social values

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Managers keeping track of societal changes. Example: McDonald's has a fruit and yogurt parfait because society wants healthy options.

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Law & Politics

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You must comply with the law or you change the law if you're an executive. Example: If you owned a bank, the branch offices of that bank must only be located near the head bank. Now, banks are widely spread because of lobbyists changing it.

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Demographics

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Data levels and how to use that data. Example: How many 13 year olds are there in Mexico, and what is their disposable income for candy.

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Technology

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You planning ahead in reference to the public's willingness to accept technology. Example: Giving electric to homes in the 1940's.

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Rivals, Substitutes, Suppliers, New Entrants, Buyers

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Components of Managing the Competitive Environment

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Stakeholders

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Groups & individuals who affect & are affected by the organization and its output.

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Stakeholder's Analysis

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Makes contribution because of an inducement.

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Cooperative Action, Independent Action, Moving to a Different Environment

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Strategies for you managing the environment.

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Contracting, Cooptation, and Coalition

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Three subdivisions of Cooperative Action

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Contracting

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Legal Agreement between two parties. Example: Penn State and Pepsi signed a deal to have Pepsi as the main supplier.

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Cooptation

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Absorbing new elements into the organization to avoid a threat. Example: Organization have student reps to have input in order to avoid conflict.

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Coalition

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Joining forces for a common purpose. Example: Smith & Wesson for NRA

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Competitive Aggression, Competitive Pacification, Public Relations, Voluntary action, Legal Action, Political Action

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Six subdivisions of Independent Action

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Competitive Aggression

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Exploiting a distinctive threat.

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Competitive Pacification

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Decide to work with someone because you know you can't beat them.

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Public Relations

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Establishing and maintaining a public image

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Voluntary action

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Engage in public service. Example: PSU and THON

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Legal Action

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Protecting your rights. Example: Can't put the Nike symbol on clothing without their permission.

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Political Action

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Lobbying is an example of this.

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Domain Selection, Diversification, Mergers & Acquisitions, Divestiture

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Four subdivisions of Moving to a Different Environment

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Domain Selection

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Entering industries where you have an advantage, "you choose where you play"

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Diversification

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Investing in different types of products and services, branching out.

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Mergers & Acquisitions

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Merging and joining forces. Example: Barnes and Noble should have bought Amazon when they had the chance.

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Divestiture

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Sell off; if something is not doing well, close it.

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Competitors, Substitutes, Barriers to Entry, and Branch Loyalty

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Four things that influence Environmental Attractiveness

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SWOT Analysis

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Structured method for analyzing the organization's internal environment in order to identify strengths and weaknesses AND analyzing the organization's external environment in order to identify opportunities and threats.

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Strengths, Weaknesses, Opportunities, and Threats

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Components of SWOT

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Star, Question Mark, Cash Cow, Dog

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Going for Left to Right, Top to Bottom, name the four components of the BCG Matrix.

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Concentration, Vertical Integration, Concentric Diversification, Conglomerate Diversification

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Four types of Corporate Strategy Alternatives

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Concentration

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an organization operates a single business and competes in a single industry (laser dot). Example: CVS, Rite Aid

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Vertical Integration

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an organization enters one or more businesses that are necessary for manufacturing or distributing its own products (upward arrows) Example: Exxon Mobil

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Concentric Diversification

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an organization adds new businesses that produce related products or are involved in related markets and activities, distinctive confidence (ripples). Example: Proctor & Gamble

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Conglomerate Diversification

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an organization adds new businesses that produce unrelated products or are involved in unrelated markets and activities. Example: GE

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Lobbying, PAC's, Strategic Retreat, Coalition Building, Stonewalling

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Five strategies for managing the Political Environment

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Lobbying

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Paying resources to influence legislation (local an international)

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PAC's

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Political Action Committee

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Strategic Retreat

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Backing off when you know you can't win

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Coalition Building

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Combining Resources

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Stonewalling

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Being obstructive

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NAFTA, EU, APEC

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Three spheres of economic influence under the World Trade Organization (125 countries)

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NAFTA

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Includes US, Mexico, Canada. Has the largest amount of $ that crosses the boarders.

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EU

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European countries that dish out upscale goods

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APEC

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Asia Pacific Economic Compact that accounts for more than 60% of the world's manufacturing.

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12 Ways of How to Assess International Market Attractiveness

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12 Stats of where to put business: Population, total GNP, Per capita GNP, Economic Stability, Legal system, Geographic Proximity, Trade Barriers, Transportation, Consumer Behavior, Competition, Political stability, cultural access

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Multinational, International, Transnational, Global

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4 Worldwide Strategy Organization Models

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Multinational Model

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Several subsidiaries operate as stand-alone units in multiple countries (autonomy) Example: Shell

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International Model

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Use existing capabilities to expand into foreign markets (strong technology) Example: Xerox

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Transnational Model

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Specialized facilities permit local responsiveness, complex coordination mechanisms provide global integration. Transcend, will tailor to what the customer wants. Example: Caterpillar

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Global Model

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Views the world as a single market, operations are centrally controlled. Example: McDonalds

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Exporting, Licensing & Franchising, Joint Venture, Wholly Owned Subsidiary

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Four Modes of Entry

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Exporting

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"Build it here, ship it there." Advantages: economies of scale, control of money, consistent with Global strategy (one product). Disadvantages: Tariff barriers (taxes) and transportation costs, some products cannot be exported

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Licensing & Franchising

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Build a product or provide a service. Advantages: Lower operating costs, lower political risk. Disadvantages: Loss of control, threats to quality, lower margins.

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Joint Venture

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Have partners there (not 50/50). Advantages: Local knowledge, shared cost and risk, may be the only option. Disadvantages: Potential conflict between parties, political risk, shared profits.

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Wholly Owned Subsidiary

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You build 100%. Advantages: All control, all profits. Disadvantages: Highest cost, highest risk.

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Host Country nationals, Expatriates, Third Country nationals

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Three types of Worldwide Managers

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Host country nationals

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Natives of the subsidiary where an overseas subsidiary is located. Example: Siemens in the U.S.

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Expatriates

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Parent-company nationals who are sent to work at a foreign subsidiary. Example: Owner from Germany

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Third-country nationals

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Natives of a country other than the home or host country. Example: Siemens sends a Brit to the U.S.

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Power Distance, Uncertainty Avoidance, Collectivism vs. Individualism, Masculinity and femininity.

answer

Four areas of Hofstede

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Power Distance

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Distance between the top and bottom

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Uncertainty Avoidance

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Knowing something vs. being ambiguous

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Collectivism vs. Individualism

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To work in a group or not

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Masculinity vs. Femininity

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Material things, deadlines vs. Relationships, harmony

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Horizontal Differentiation (Differentiation)

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The way tasks are broken up. Example: Undergrad experience includes entrance to major, language, general educations, etc.

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Vertical Differentiation (Integration)

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Putting everything together so that it makes sense. Example: Need a certain amount of entrance to major, language, and general educations to graduate; you can't just randomly pick.

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Tall Triangle

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Triangle that has many levels. Example: PSU

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Flat Triangle

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Triangle that has few levels. Example: Car Wash

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Strategic

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Top management (executive), worries five years ahead. Example: dean or president

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Tatical

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Middle Management, worries about a year in advance. Example: Director, department head.

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Operational

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Line management, worry about daily, weekly, monthly. Examples: Supervisors, employees

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Functional, Product, Geographic, Matrix, Project Team, Collegial

answer

Four Types of Organizational Structure

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Functional

answer

Grouping organizational units according to technical/professional specialty. Most common in terms of number of organizations.

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Product

answer

Grouping organizational units according to product or service.

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Geographic

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Grouping organizational units by geographic location

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Matrix

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An organization characterized by dual reporting relationships, in which some persons report to two supervisors. Ex. Have 2, 3, or 4 bosses

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Project Team

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Interdisciplinary specialists assigned to long-term project.

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Collegial

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Non-pyramidal form, co-equal partners (ONLY ONE NOT IN PYRAMID FORM)

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Labor Intensive, Capital Intensive, Continuous Process

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Three Forms of Basic Technology

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Labor Intensive Technology

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Needs alot of humans. The triangle is completely shaded.

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Capital Intensive Technology

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Needs equipment and is all about mass production. The triangle is a house because the equipment has replaced the people

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Continuous Process

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"the thing itself". The triangle is diamond shaped because the equipment and the process itself has replaced the people.

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Mechanistic Work Style

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Highly formal, limited participation, dependent on supervisor, talk about "boss", centralization. Status comes from how much power you have.

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Organic Work Style

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Informal, High Participation, Less dependent on supervisor, talk about "teams", decentralization. Status comes from knowledge, what you contribute.

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Original Definition of Entrepreneurship

answer

Formally defined as the buying, selling, and bringing together of the factors of production.

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Modern Definition of Entrepreneurship

answer

Entrepreneurship is a propensity to identify business opportunities and to take action to exploit those opportunities.

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Property

answer

Traits and personality characteristics of the Entrepreneurial Personality

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Process

answer

A series of steps and procedures, an action approach.

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External Locus of Control

answer

Attribute outcomes to factors outside themselves

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Internal Locus of Control

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Attribute outcomes to factors within themselves

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Bad idea, Mortality, Delegation, Funding, Planning&Control,

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Entrepreneurial Hazards

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Intrapreuneurship

answer

The concept of using entrepreneurial thinking within the complexity and bureaucracy of a large organization.

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