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Universities » Georgia College & State Universi.. » MGMT - Management » 3141 - Principles of Management » Flash Cards

MGMT 3141 Exam 2 - Flashcards

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Class:MGMT 3141 - Principles of Management
Subject:Management
University:Georgia College & State University
Term:Fall 2010
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Grand Strategy A broad corporate-level strategic plan used to achieve strategic goals
Grand Strategy three general categories Growth Stability Retrenchment
Internal Growth Investing in expansion in the development of new or changed products
Expansion of current products into new markets (e.g. Avon-Mall Kiosks)
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External Growth Aquiring additional business divisions related to current product lines (e.g. At&T and Cingular)
Define External Aquisitions of businesses thattake the corporation into new areas (e.g. Proctor and Gamble and the Iams Company)
Another term for the grand strategy stability is: Pause Strategy
A Pause Strategy means that the organization wants to: Remain the same size or grow slowly in a controlled fashion
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Explain the Growth Strategy Retrenchment: Shrinking current business units Selling off or liquidating the entire business Divestiture Selling off businesses that no longer seem central to the corporation (eg JCPenney sold its Eckerd chain of drugstores)
Porter's Five Forces Affecting Industry Competition: Rivalry among competitors (Central Force Everything Around) Potential New Entrants- Internet blurs differences among competitors in an industry Threats of Substitute Products-Internet increases competition threats and decrease the barriers by allowing consumers and suppliers more access to products Bargaining Power of Suppliers-Internet tends to increase the bargaining power of suppliers Bargaining Power of Buyers- Internet shifts greater power to consumers
Competitive Edge through three Competitive Strategies: Differentiation Cost Leadership Focus
Differentiation distinguish products or services from others in the industry
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Cost Leadership Seek effiicient facilities, pursue cost reductions, and use tight cost controls
Focus Concentrate on a specific regional market or buyer group Ex) Southwest
SWOT Analysis SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business.
The Strength and Weakness exist: Inside the company (Internal)
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The Opportunities and Threats exist: outside of the company in the Task environment (External)
Portfolio Strategy A corporate-level strategy that minimizes risk by diversifying investment among various businesses or product lines (Corporate Example-General Electric)
BCG Matrix four categories: High; High- Stars High; Low (across top Market Share)- Question Marks Low; High (down Business Growth Rate)- Cash Cows Low; Low- Dogs
Define and give an example of: Stars -Rapid Growth and Expansion -Security Healthcare- very large market share and positive cash flow
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Define and give and example of: Question Marks New Ventures. Risky--a few become stars others disappear
Define and give am example of Cash Cow: Milk to finance question marks and stars Appliance lighting-2 business units exist in a slow growing environment, but GE benefits from profits
Define Dogs No investment. Keep if some profit consider divestment
Purpose of Strategy: -Dealing with the environment -Helping the organization achieve their goals -Achieving a competitive advantage
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Define Competitive Advantage: Providing greater value for customers than competitors can
Three Strategies to remain competitive: Core Competence Developing Synergy Creating Values for Customers
Define Core Competence: Something the organization does ecspecially well in comparison to its competitors
Define Developing Synergy: 1+1>2
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Define Creating Values for Customers: At the heart of strategy
Organizational Change Which is a difference in the forms, quality, or conditions of a organization over time
Organization Development A philosposhy and collection of planned change interventions that can improve an organization's long term health and performance
Three strategies to organizational development: Team Building Survey Feedback Large Group Intervention
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Forces to Change Forces that produce differences in the form, quality, or condition of an organization over time
Resistance to Change -Self-interest -Lack of understanding and trust -Uncertainty -Different assessments and goals
Tatics for overcoming resistance to change: Communication Participation Negotiation Coercion Top Managemnet Support
When to use tatic Communication: Change is technical; users need accurate information
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When to use tatic Participation: Users need to feel involved; design requires information from others; have power to resist
Group has power over implementation; will lose out in the change
When to use the tatic Coercion: Crisis exist; initiators clearly have power; other techniques have failed
When to use the Top Management Support Tatic Involves multiple departments or reallocation of resources; users doubt legitimacy of change
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Strategies for Entering International Markets Low to High: -Exporting -Global Outsourcing -Licensing -Franchising -Joint Venture -Acquistition -Greenfield Venture
Define Outsourcing: (offshoring) -Engaging in the international division of labor (eg Netgear) -Take advantage of efficiencies
Exporting Transferring products for sale in foreign countries (eg Gerber Scientific Inc)
Licensing A company (licensor) in one country makes certain resources available to companies (licensee) in another country (eg a toy maker Hasbro)
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Franchising Franchise buys a complete package of materials and services (Special form of licensing)
How do licensing and franchising differ Licensors all have different names than the company. Franchisers all have the same name as the franchise
Joint Venture (two companies sponsor to build a company) Build a manufacturing facility, develop new products , or set up a sales and distribution network (eg Auburn Farms +Beacon Sweets+Chocolates)
Greenfield Venture The most costly and risky direct investment. A company builds a subsidiary from scratch in a foreign country
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Three International Environment Factors: Economic Legal Political Sociocultural
Economic Development Countries categorized as "developing" or "developed"
Per Capita Income: Income of an entire population of a country
Per Capita Income Income Formula: Total Income/ Total Population
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Examples of developing countries: Asia, Africa, and South America
Examples of developed countries: North America, Europe, and Japan
Economic Infrastructure: A country's physical facilities that support economic activities
Three physical activities that help support economic activities Transportation Facilities, Energy-produce facilities, and communication facilities
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When operating in another country what must managers do Due to the resource and product Markets Managers must evaluate market demand and also, develop plants, resource markets for provideing needed raw materials and labor must be available. Product Markets = Market demands Resource Market=Develop Plants
Exchange Rates Rate at which one country's currency is exchanged for another country's
1 US dollar=7 Yuan 1 US dollar=8 Yuan Explain: Decrease due to higher exchange rates
1 US dollar=7 Yuan 1US dollar=6 Yuan Increase due to lower exchange rates
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Political Risk of the Legal-Political Environment: the risk of loss of assets, eating power, or managerial control due to politically based events or actions by host governments
Three examples of Legal-Political Environment: Government takeovers of property and acts of violence Political Instability Government laws and regulations
Sociocultural Differences: Power distance Individualism Masculinity and feminitity Uncertainty Avoidance Short term/ long-term orientation
Organizing: the deployment of resources to achieve strategic goals
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Organization is reflected in: Vertical Structure-Division of labor into specific deoartments and jobs and Forma lines of authority Horizontal Structure-Mechanism for coordinating diverse organizational tasks
Organizational Structure: The vertical and horizontal configuration of departments, authority, and jobs within a company
Organizational Chart: Formal tasks Formal reporting relationships Framework for vertical control
Work Specialization (division of labor concept) organizational tasks are subdivided into individual jobs, employees perform only the tasks relevant to their specialized function, and jobs tend to be small , but they can be performed efficiently
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 Grand StrategyA broad corporate-level strategic plan used to achieve strategic goals
 Grand Strategy three general categoriesGrowth
Stability
Retrenchment
 Internal GrowthInvesting in expansion in the development of new or changed products
  Expansion of current products into new markets (e.g. Avon-Mall Kiosks)
 External GrowthAquiring additional business divisions related to current product lines (e.g. At&T and Cingular)
 Define ExternalAquisitions of businesses thattake the corporation into new areas (e.g. Proctor and Gamble and the Iams Company)
 Another term for the grand strategy stability is:Pause Strategy
 A Pause Strategy means that the organization wants to:Remain the same size or grow slowly in a controlled fashion
 Explain the Growth Strategy Retrenchment:Shrinking current business units
Selling off or liquidating the entire business
Divestiture
Selling off businesses that no longer seem central to the corporation (eg JCPenney sold its Eckerd chain of drugstores)
 Porter's Five Forces Affecting Industry Competition:Rivalry among competitors (Central Force Everything Around)
Potential New Entrants- Internet blurs differences among competitors in an industry
Threats of Substitute Products-Internet increases competition threats and decrease the barriers by allowing consumers and suppliers more access to products
Bargaining Power of Suppliers-Internet tends to increase the bargaining power of suppliers
Bargaining Power of Buyers- Internet shifts greater power to consumers
 Competitive Edge through three Competitive Strategies:Differentiation
Cost Leadership
Focus
 Differentiationdistinguish products or services from others in the industry
 Cost LeadershipSeek effiicient facilities, pursue cost reductions, and use tight cost controls
 FocusConcentrate on a specific regional market or buyer group Ex) Southwest
 SWOT AnalysisSWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business.
 The Strength and Weakness exist:Inside the company (Internal)
 The Opportunities and Threats exist:outside of the company in the Task environment (External)
 Portfolio StrategyA corporate-level strategy that minimizes risk by diversifying investment among various businesses or product lines (Corporate Example-General Electric)
 BCG Matrix four categories:High; High- Stars
High; Low (across top Market Share)- Question Marks
Low; High (down Business Growth Rate)- Cash Cows
Low; Low- Dogs
 Define and give an example of: Stars-Rapid Growth and Expansion

-Security Healthcare- very large market share and positive cash flow
 Define and give and example of: Question MarksNew Ventures. Risky--a few become stars others disappear
 Define and give am example of Cash Cow:Milk to finance question marks and stars

Appliance lighting-2 business units exist in a slow growing environment, but GE benefits from profits
 Define DogsNo investment. Keep if some profit consider divestment
 Purpose of Strategy:-Dealing with the environment
-Helping the organization achieve their goals
-Achieving a competitive advantage
 Define Competitive Advantage:Providing greater value for customers than competitors can
 Three Strategies to remain competitive:Core Competence
Developing Synergy
Creating Values for Customers

 Define Core Competence:Something the organization does ecspecially well in comparison to its competitors
 Define Developing Synergy:1+1>2
 Define Creating Values for Customers:At the heart of strategy
 Organizational ChangeWhich is a difference in the forms, quality, or conditions of a organization over time
 Organization DevelopmentA philosposhy and collection of planned change interventions that can improve an organization's long term health and performance
 Three strategies to organizational development:Team Building
Survey Feedback
Large Group Intervention
 Forces to ChangeForces that produce differences in the form, quality, or condition of an organization over time
 Resistance to Change-Self-interest
-Lack of understanding and trust
-Uncertainty
-Different assessments and goals
 Tatics for overcoming resistance to change:Communication
Participation
Negotiation
Coercion
Top Managemnet Support
 When to use tatic Communication:Change is technical; users need accurate information
 When to use tatic Participation:Users need to feel involved; design requires information from others; have power to resist
  Group has power over implementation; will lose out in the change
 When to use the tatic Coercion:Crisis exist; initiators clearly have power; other techniques have failed
 When to use the Top Management Support TaticInvolves multiple departments or reallocation of resources; users doubt legitimacy of change
 Strategies for Entering International Markets Low to High:-Exporting
-Global Outsourcing
-Licensing
-Franchising
-Joint Venture
-Acquistition
-Greenfield Venture
 Define Outsourcing:(offshoring)
-Engaging in the international division of labor (eg Netgear)
-Take advantage of efficiencies
 ExportingTransferring products for sale in foreign countries (eg Gerber Scientific Inc)
 LicensingA company (licensor) in one country makes certain resources available to companies (licensee) in another country (eg a toy maker Hasbro)
 FranchisingFranchise buys a complete package of materials and services (Special form of licensing)
 How do licensing and franchising differLicensors all have different names than the company. Franchisers all have the same name as the franchise
 Joint Venture(two companies sponsor to build a company) Build a manufacturing facility, develop new products , or set up a sales and distribution network (eg Auburn Farms +Beacon Sweets+Chocolates)
 Greenfield VentureThe most costly and risky direct investment. A company builds a subsidiary from scratch in a foreign country
 Three International Environment Factors:Economic
Legal Political
Sociocultural
 Economic DevelopmentCountries categorized as "developing" or "developed"
 Per Capita Income:Income of an entire population of a country
 Per Capita Income Income Formula:Total Income/ Total Population
 Examples of developing countries:Asia, Africa, and South America
 Examples of developed countries:North America, Europe, and Japan
 Economic Infrastructure:A country's physical facilities that support economic activities
 Three physical activities that help support economic activitiesTransportation Facilities, Energy-produce facilities, and communication facilities
 When operating in another country what must managers doDue to the resource and product Markets Managers must evaluate market demand and also, develop plants, resource markets for provideing needed raw materials and labor must be available.
Product Markets = Market demands
Resource Market=Develop Plants
 Exchange RatesRate at which one country's currency is exchanged for another country's
 1 US dollar=7 Yuan 1 US dollar=8 Yuan Explain:Decrease due to higher exchange rates
 1 US dollar=7 Yuan 1US dollar=6 YuanIncrease due to lower exchange rates
 Political Risk of the Legal-Political Environment:the risk of loss of assets, eating power, or managerial control due to politically based events or actions by host governments
 Three examples of Legal-Political Environment:Government takeovers of property and acts of violence
Political Instability
Government laws and regulations
 Sociocultural Differences:Power distance
Individualism
Masculinity and feminitity
Uncertainty Avoidance
Short term/ long-term orientation
 Organizing:the deployment of resources to achieve strategic goals
 Organization is reflected in:Vertical Structure-Division of labor into specific deoartments and jobs and Forma lines of authority

Horizontal Structure-Mechanism for coordinating diverse organizational tasks
 Organizational Structure:The vertical and horizontal configuration of departments, authority, and jobs within a company
 Organizational Chart:Formal tasks
Formal reporting relationships
Framework for vertical control
 Work Specialization(division of labor concept) organizational tasks are subdivided into individual jobs, employees perform only the tasks relevant to their specialized function, and jobs tend to be small , but they can be performed efficiently
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