Koofers

Exam 1 - Flashcards

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Class:MGT 3304 - Mgt Th & Lead Pract
Subject:Management
University:Virginia Polytechnic Institute And State University
Term:Spring 2012
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Organization a group of people who work together to achieve some specific purpose
Management the pursuit of organizational goals efficiently and effectively by integrating the work of people through planning, organizing, leading, and controlling the organization's resources
Efficient

Means to use resources - people, money, raw materials, and the like- wisely and cost-effectively

Means of attaining the organization's goals

Effective means to achieve results, to make the right decisions and to successfully carry them out so that they achieve the organization's goals
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Competitive Advantage the ability of an organization to produce goods or services more effectively than competitors do, thereby outperforming them
Innovation Finding ways to deliver new or better goods or services
Internet the global network of independently operating but interconnected computers, linking hundreds or thousands of smaller networks around the world
e-commerce electronic commerce, the buying and selling of goods or services over computer networks
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e-business using the Internet to facilitate every aspect of running a business
e-mail text messages and documents transmitted over a computer network
Project management software programs for planning and scheduling the people, costs, and resources to complete a project on time
Databases computerized collections of interrelated files
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Telecommute work from home or remote locations using a variety of information technologies
Videoconferencing using video and audio links along with computers to let people in different locations see, hear, and talk with one another
Collaborative Computing using state-of-the-art computer software and hardware, will help people work better together
Knowledge Management the implementing of systems and practices to increase the sharing of knowledge and information throughout an organization
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Sustainability economic development that meets the needs of the present without compromising the ability of future generations to meet their own needs
Management Process

Also called the four management functions

 

Planning, organizing, leading, and controlling

Planning setting goals and deciding how to achieve them
Organizing arranging tasks, people, and other resources to accomplish the work
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Leading motivating, directing, and otherwise influencing people to work hard to achieve the organization's goals
Controlling monitoring performance, comparing it with goals, and taking corrective action as needed
Top managers they make long-term decisions about the overall direction of the organization and establish the objectives, policies, and strategies for it
Middle Managers They implement the policies and plans of the top managers above them and supervise and coordinate the activities of the first-line managers below them
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First-line Managers They make short-term operating decisions, directing the daily tasks of nonmanagerial personnel
Functional Manager They are responsible for just one organizational activity
General Manager They are responsible for several organizational activities
Interpersonal Roles Managers interact with people inside and outside their work units
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Informational Roles Managers receive and communicate information as monitor, disseminator, and spokesperson
Decisional Roles

managers use information to make decisions to solve problems or take advantage of opportunities

 

entrepreneur, disturbbance, handler, resource allocator, and negotiator

Entrepreneurship the process of taking risks to try to create a new enterprise
Entrepreneur someone who sees a new opportunity for a product or service and launches a business to try to realize it
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Intrapreneur someone who works inside an existing organization who sees an opportunity for a product or service and mobilizes the organization's resources to try to realize it
Internal Locus of Control The belief that you control your own destiny
Technical Skills consist of the job-specific knowledge needed to perform well in a specialized field
Conceptual Skills consist of the ability to think analytically, to visualize an organization as a whole and understand how the parts work together
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Human skills consist of the ability to work well in cooperation with other people to get things done
Evidence-based management means translating principles based on best evidence into organizational practice, bringing rationality to the decision-making process
Historical perspective includes three viewpoints- classical, behavioral, and quantitative
Contemporary Perspective includes three viewpoints- systems, contingency, and quality management
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Classical viewpoint

emphasizes finding ways to manage work more efficiently

has two branches- scientific and administrative

Scientific Management emphasized the scientific study of work methods to improve the productivity of individual workers
Administrative Management concerned with managing the total organization
Behavioral Viewpoint emphasized the importance of understanding human behavior and of movtivating employees toward achievement
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Human relations movement proposed that better human relations coulld increase worker productivity
Behavioral Science relies on scientific research for developing theories about human behavior that can be used to provide practical tools for managers
Quantitative Management

the application to management of quantitative techniques, such as statistics and computer simulations

 

branches:

  1. management science
  2. operations management
Management science focuses on using mathematics to aid in problem solving and decision making
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Operations Management focuses on managing the production and delivery of an organization's products or services more effectively
System a set of interrelated parts that operate together to achieve a common purpose
Systems viewpoint regards the organization as a system of interrelated parts
Subsystems parts making up the whole system
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Inputs the people, money, information, equipment, and materials required to produce an organization's goods or services
Outputs the products, services, profits, losses, employee satisfaction or discontent, and the like that are produced by the organization
Transformation Processes the organization's capabilities in management and technology that are applied to converting inputs into outputs
Feedback information about the reaction of the environment to the outputs that affects the inputs
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Open System continually interacts with its environment
Closed system has little interaction with its environment
Contingency Viewpoint emphasizes that a manager's approach should vary according to the individual and the environmental situation
Quality-management viewpoint includes quality control, quality assurance, and total quality management
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Quality refers to the total ability of a product or service to meet customer needs
Quality control the strategy for minimizing errors by managing each stage of production
Quality assurance focuses on the performance of workers, urging employees to strive for "zero defects"
Total Quality Management (TQM) a comprehensive approach- led by top management and supported throughout the organiation - dedicated to continuous quality improvement, training, and customer satisfaction
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Learning Organization an organization that actively creates, acquires, and transfers knowledge within itself and is able to modify its behavior to reflect new knowledge
Virtual Organization an organization whose members are geographically apart, usually working with e-mail, collaborative computing, and other computer connections
Boundaryless Organization a fluid, highly adaptive organization whose members, linked by information technology, come together to collaborate on common tasks; the collaborators may include competitors, suppliers, and customers
Knowledge worker someone whose occupation is principally concerned with generating or interpreting information, as opposed to manual labor
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Human capital the economic or productive potential of employee knowledge, experience, and actions
Social capital the economic or productive potential of storng, trusting, and cooperative relationships
Stakeholders the people whose interests are affected by an organization's activities
Internal stakeholders consist of employees, owners, and the board of directors, if any
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Owners consist of all those who can claim it as their legal property
External Stakeholders people or groups in the organization's external environment that are affected by it
Task environment consists of 11 groups that present you with daily tasks to handle: customers, competitors, suppliers, distributors, strategic allies, employee organizations, local communities, financial institutions, government regulators, special-interest groups, and mass media
Customers those who pay to use an organization's goods or services
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Competitors people or organizations that compete for customers or resources
Supplier a person or an organization that provides supplies- that is, raw materials, services, equipment, labor, or energy - to other organizations
Distributor a person or an organization that helps another organization sell its goods and services to customers
Strategic allies describes the relationship of two organizations who join forces to achieve advantages neither can perform as well alone
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Clawbacks rescinding the tax breaks when firms don't deliver promised jobs
Government regulators regulatory agencies that establish ground rules under which organizations may operate
Special-interest groups groups whose members try to influence specific issues
General environment/ Macroenvironment

includes six forces:

  • economic
  • technological
  • sociocultural
  • demographic
  • political-legal
  • international
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Economic forces consist of the general economic conditions and trends- unemployment, inflation, interest rates, economic growth - that may affect an organization's performance
Technological forces new developments in methods for transforming resources into goods or services
Sociocultural forces influences and trends originating in a country's, a society's, or a culture's human relationships and values that may affect an organization
Demographic forces influences on an organization arising from changes in the characteristics of a population, such as age, gender, or ethnic origin
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Political-legal forces changes in the way politics shape laws and laws shape the opportunities for and threats to an organization
International Forces changes in the economic, political, legal, and technological global system that may affect an organization
Ethical dilemma a situation in which you have to decide whether to pursue a course of action that may benefit you or your organization but that is unethical or even illegal
Ethics the standards of right and wrong that influence behavior
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Ethical behavior behavior that is accepted as "right" as opposed to "wrong" according to those standards
Value system the pattern of values within an organization
Values the relatively permanent and deeply held underlying beliefs and attitudes that help determine a person's behavior
Utilitarian Approach guided by what will result in the greatest good for the greatest number of people
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Individual approach guided by what will result in the individual's best long-term interests, which ultimately are in everyone's self-interest
Moral-rights approach guided by respect for the fundamental rights of human beings
Justice approach guided by respect for impartial standards of fairness and equity
Insider trading the illegal trading of a company's stock by people using confidential company information
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Ponzi scheme using cash from newer investors to pay off older ones
Sarbanes-Oxley Act of 2002 (SarbOx or SOX) established requirements for proper financial record keeping for public companies and penalties of as much as 25 years in prison for noncompliance
Ethical climate represents employees' perceptions about the extent to which work environments support ethical behavior
Code of ethics consists of a formal written set of ethical standards guiding an organization's actions
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Whistle-blower an employee who reports organizational misconduct to the public
social responsibility a manager's duty to take actions that will benefit the interests of society as well as of the organization
Corporate Social Responsibility (CSR)  the notion that corporations are expected to go above and beyond following the law and making a profit
Philanthropy making charitable donations to benefit humankind
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Diversity represents all the ways people are unlike and alike- the differences and similarities in age, gender, race, religion, ethnicity, sexual orientation, capabilities, and socioeconomic background
Personality the stable physical and mental characteristics responsible for a person's identity
Internal dimensions of diversity those human differences that exert a powerful, sustained effect throughout every stage of our lives
External dimensions of diversity include an element of choice; they consist of the personal characteristics that people acquire, discard, or modify throughout their lives
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Glass ceiling the metaphor for an invisible barrier preventing women and minorities from being promoted to top executive jobs
Americans with Disabilities Act prohibits discrimination against the disabled
underemployed working at jobst that require less education than they have
Ethnocentrism the belief that one's native country, culture, language, abilities, or behavior is superior to that of another culture
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Globalization the trend of the world economy toward becoming a more interdependent system
Global village refers to the "shrinking" of time and space as air travel and the electronic media have made it easier for the people of the globe to communicate with one another
Global economy refers to the increasing tendency of the economies of the world to interact with one another as one market instead of many national markets
Multinational Corporation

A business firm with operations in several countries

 

Also called a multinational enterprise

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Multinational Organization a nonprofit organization with operations in several countries
Ethnocentric Managers believe that their native country, culture, language, and behavior are superior to all others
Parochialism a narrow view in which people see things solely through their own perspective
Polycentric Managers take the view that native managers in the foreign offices best understand native personnel and practices, so the home office should leave them alone
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Geocentric Managers

accept that there are differences and similarities between home and foreign personnel and practices and that and that they should use whatever techniques are most effective

 

Maquiladoras manufacturing plants allowed to operate in Mexico with special privileges in return for employing Mexican citizens
Outsourcing using suppliers outside the company to provide goods and services
Global Outsourcing using suppliers outside the United States to provide labor, goods, or services
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Importing a company buys goods outside the country and resells them domestically
Exporting a company produces goods domestically and sells them outside the country
Countertrading bartering goods for goods
Licensing a company allows a foreign company to pay it a fee to make or distribute the first company's product or service
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Franchising a form of licensing in which a company allows a foreign company to pay it a fee and a share of the profit in return for using the first company's brand name and a package of materials and services
Joint Venture/Strategic Alliance share the risks and rewards of starting a new enterprise together with a foreign company in a foreign country
Wholly-owned subsidiary a foreign subsidiary that is totally owned and controlled by an organization
Greenfield Venture a foreign subsidiary that the owning organization has built from scratch
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Free trade the movement of goods and services among nations without political or economic obstruction
Trade Protectionism the use of government regulations to limit the import of goods and services
Tariff a trade barrier in the form of a customs duty, or tax, levied mainly on imports
Import Quota a trade barrier in the form of a limit on the numbers of a product that can be imported
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Dumping the practice of a foreign company's exporting products abroad at a lower price than the price in the home market - or even below the costs of production- in order to drive down the price of the domestic product
Embargo a complete ban on the import or export of certain products
World Trade Organization (WTO) designed to monitor and enforce trade agreements
World Bank its purpose is to provide low-interest loans to developing nations for improving transportation, education, health, and telecommunications
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International Monetary Fund (IMF) designed to assist in smoothing the flow of money between nations
Exchange rate the rate at which one country's currency can be exchanged for another country's currency
Trading Bloc/Economic Community a group of nations within a geographical region that have agreed to  remove trade barriers with one another
North American Free Trade Agreement (NAFTA) a trading bloc consisting of the United States, Canada, and Mexico
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European Union (EU) consists of 27 trading partners in Europe
Asia-Pacific Economic Cooperation (APEC) a group of 21 Pacific Rim countries whose purpose is to improve economic and political ties
Association of Southeast nations (ASEAN) a trading bloc consisting of 11 countries in Asia
Mercosur the largest trade bloc in Latin American and has four core members --Argentina, Brazil, Paraguay, and Uruguay, with Venezuela scheduled to become a full member upon ratification by other countries-- and five associate  members: Bolivia, Chile, Colombia, Ecuador, and Peru 
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Central America Free Trade Agreement (CAFTA-DR) involves the United States and Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua- is intended to reduce tariffs and other barriers to free trade
Most favored nation trading status describes a condition in which a country grants other countries favorable trading treatment such as the reduction of import duties
Culture the shared set of beliefs, values, knowledge, and patterns of behavior common to a group of people
Low-context culture shared meanings are primarily derived from written and spoken words
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High-context culture people rely heavily on situational cues for meaning when communicating with others
Hofstede model of four cultural dimensions

identified four dimensions along which national cultures can be placed

  1. individualism/collectivism
  2. power distance
  3. uncertainty avoidance
  4. masculinity/femininity
GLOBE project a massive and ongoing cross-cultural investigation of nine cultural dimensions involved in leadership and organizational processes
Monochronic Time a preference for doing one thing at a time
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Polychronic time a preference for doing more than one thing at a time
Expatriates people living or working in a foreign country
Planning coping with uncertainty by formulating future courses of action to achieve specified results
Defenders expert at producing and selling narrowly defined products or services
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Prospectors focus on developing new products or services and in seeking out new markets, rather than waiting for things to happen
Analyzers let other organizations take the risks of product development and marketing and then imitate (or perhaps slightly improve on) what seems to work best
Reactors make adjustments only when finally forced to by environmental pressures
Mission An organization's purpose or reason for being
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Mission Statement expresses the purpose of the organization
Vision

a long-term goal describing what an organization wants to become

a clear sense of the futre and the actions needed to get there

Vision Statement expresses what the organization should become, where it wants to go strategically
Strategic Planning top managers determine what the organization's long-term goals should be for the next 1-5 years with the resources they expect to have available
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Tactical Planning Middle Managers determine what contributions their deparments or similar work units can make with their given resources during the next 6-24 months
Operational Planning First-line managers determine how to accomplish specific tasks with available resources within the next 1-52 weeks
Goal/Objective a specific commitment to achieve a measurable result within a stated period of time
Means-end chain Goals are arranged in a hierarchy because in the cain of management (operational, tactical, strategic) the accomplishment of low-level goals is the means leading to the accomplishment of high-level goals or ends
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Strategic goals set by and for top management and focus on objectives for the organization as a whole
Tactical goals set by and for middle managers and focus on the actions needed to achieve strategic goals
Operational Goals set by and for first-line managers and are concerned with short-term matters associated with realizing tactical goals
SMART goal a goal this is specific, measurable, attainable, results-oriented, and has target dates
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Action plan defines the course of action needed to achieve the stated goal
Operating plan typically designed for a 1-year period, it defines how you will conduct your business based on the actoion plan; it identifies clear targets such as revenues, cash flow, and market share
Standing plan plans developed for activities that occur repeatedly over a period of time
Policy a standing plan that outlines the general response to a designated problem or situation
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Procedure/ Standard Operating Procedure a standing plan that outlines the response to particular problems or circumstances
Rule  a standing plan that designates specific required action
Single-use plans plans developed for activities that are not likely to be repeated in the future
Program a single-use plan encompassing a range of projects or activities
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Project a single-use plan of less scope and complexity than a program
Management by Objectives (MBO)

a four-step process in which

  1. managers and employees jointly set objectives for the employees
  2. managers develop action plans
  3. managers and employees periodically review the employee's performance
  4. the manager makes a performance appraisal and rewards the employee according to the results
Cascading objectives are structured in a unified hierarchy, becoming more specific at lower levels of the organization
Planning/Control Cycle

has two planning steps:

  1. make the plan
  2. carry out the plan

and two control steps:

      3. control the direction by comparing results with the plan

      4. control the direction in two ways:

  • by correcting deviations in the plan being carried out
  • by improving future plans
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Business Plan a document that outlines a proposed firm's goals, the strategy for achieving them, and the standards for measuring success
Strategy a large-scale action plan that sets the direction for an organization
Strategic Management a process that involves managers from all parts of the organization in the formulation and the implementation of strategies and strategic goals
Strategic positioning attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company
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Grand Strategy

after an assessment of current organizational performance, then explains how the organization's mission is to be accomplished

 

three common types are growth, stability, and defensive

Growth Strategy a grand strategy that involves expansion- as in sales revenues, market shares, number of employees, or number of customers or (for nonprofits) clients served
Stability Strategy a grand strategy that involves little or no significant change
Defensive Strategy

Also called a retrenchment strategy

a grand strategy that involves reduction in the organization's efforts

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Strategy formulation the process of choosing among different strategies and altering them to best fit the organization's needs
Strategy implementation putting strategic plans into effect
Strategic Control consists of monitoring the execution of strategy and making adjustments, if necessary
Competitive Intelligence menas gaining information about one's competitors' activities so that you can anticipate their moves and react appropriately
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Environmental Scanning Careful monitoring of an organization's internal and external environments to detect early signs of opportunities and threats that may influence the firm's plans
SWOT/Situational Analysis a search for the strengths, weaknesses, opportunities, and threats affecting the organization
Organizational Strengths the skills and capabilities that give the organization special competencies and competitive advantages in executing strategies in pursuit of its mission
Organizational Weaknesses the drawbacks that hinder an organization in executing strategies in pursuit of its mission
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Organizational Opportunities environmental factors that the organization may exploit for competitive advantage
Organizational Threats environmental factors that hinder an organization's achieving a competitive advantage
Forecast a vision or projection of the future
Trend analysis a hypothetical extension of a past series of events into the future
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Contingency Planning/ Scenario Planning/ Scenario Analysis the creation of alternative hypothetical but equally likely future conditions
Porter's model for industry analysis

business-level strategies originate in five primary competitive forces in the firm's environment

  1. threats of new entrants
  2. bargaining power of suppliers
  3. bargaining power of buyers
  4. threats of substitute products or services
  5. rivalry among competitors
Porter's Four competitive strategies (four generic strategies)
  1. cost-leadership
  2. differentiation
  3. cost-focus
  4. focused-differentiation
Cost-leadership strategy keep the costs, and hence prices, of a product or service below those of competitors and to target a wide market
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Differentiation strategy to offer products or services that are of unique and superior value compared with those of competitors but to target a wide market
Cost-focus strategy keep the costs, and hence prices, of a product or service below those of competitors and to target a narrow market
Focused-differentiation strategy offer products or services that are of unique and superior value compared to those of competitors and to target a narrow market
Single-Product Strategy a company makes and sells only one product within its market
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Diversification operating several businesses in order to spread the risk
Unrelated diversification operating several businesses under one ownership that are not related to one another
Related diversification an organization under one ownership operates separate businesses that are related to one another
Synergy the economic value of separate, related businesses under one ownership and management is greater together than the businesses are worth separately
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BCG Matrix

a means of evaluating strategic business units on the basis of

  • their business growth rates
  • their share of the market
Execution not simply tactics, it is a central part of any company's strategy.  It consists of using questioning, analysis, and follow-through to mesh strategy with reality, align people with goals, and achieve results promised
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 Organizationa group of people who work together to achieve some specific purpose
 Managementthe pursuit of organizational goals efficiently and effectively by integrating the work of people through planning, organizing, leading, and controlling the organization's resources
 Efficient

Means to use resources - people, money, raw materials, and the like- wisely and cost-effectively

Means of attaining the organization's goals

 Effectivemeans to achieve results, to make the right decisions and to successfully carry them out so that they achieve the organization's goals
 Competitive Advantagethe ability of an organization to produce goods or services more effectively than competitors do, thereby outperforming them
 InnovationFinding ways to deliver new or better goods or services
 Internetthe global network of independently operating but interconnected computers, linking hundreds or thousands of smaller networks around the world
 e-commerceelectronic commerce, the buying and selling of goods or services over computer networks
 e-businessusing the Internet to facilitate every aspect of running a business
 e-mailtext messages and documents transmitted over a computer network
 Project management softwareprograms for planning and scheduling the people, costs, and resources to complete a project on time
 Databasescomputerized collections of interrelated files
 Telecommutework from home or remote locations using a variety of information technologies
 Videoconferencingusing video and audio links along with computers to let people in different locations see, hear, and talk with one another
 Collaborative Computingusing state-of-the-art computer software and hardware, will help people work better together
 Knowledge Managementthe implementing of systems and practices to increase the sharing of knowledge and information throughout an organization
 Sustainabilityeconomic development that meets the needs of the present without compromising the ability of future generations to meet their own needs
 Management Process

Also called the four management functions

 

Planning, organizing, leading, and controlling

 Planningsetting goals and deciding how to achieve them
 Organizingarranging tasks, people, and other resources to accomplish the work
 Leadingmotivating, directing, and otherwise influencing people to work hard to achieve the organization's goals
 Controllingmonitoring performance, comparing it with goals, and taking corrective action as needed
 Top managersthey make long-term decisions about the overall direction of the organization and establish the objectives, policies, and strategies for it
 Middle ManagersThey implement the policies and plans of the top managers above them and supervise and coordinate the activities of the first-line managers below them
 First-line ManagersThey make short-term operating decisions, directing the daily tasks of nonmanagerial personnel
 Functional ManagerThey are responsible for just one organizational activity
 General ManagerThey are responsible for several organizational activities
 Interpersonal RolesManagers interact with people inside and outside their work units
 Informational RolesManagers receive and communicate information as monitor, disseminator, and spokesperson
 Decisional Roles

managers use information to make decisions to solve problems or take advantage of opportunities

 

entrepreneur, disturbbance, handler, resource allocator, and negotiator

 Entrepreneurshipthe process of taking risks to try to create a new enterprise
 Entrepreneursomeone who sees a new opportunity for a product or service and launches a business to try to realize it
 Intrapreneursomeone who works inside an existing organization who sees an opportunity for a product or service and mobilizes the organization's resources to try to realize it
 Internal Locus of ControlThe belief that you control your own destiny
 Technical Skillsconsist of the job-specific knowledge needed to perform well in a specialized field
 Conceptual Skillsconsist of the ability to think analytically, to visualize an organization as a whole and understand how the parts work together
 Human skillsconsist of the ability to work well in cooperation with other people to get things done
 Evidence-based managementmeans translating principles based on best evidence into organizational practice, bringing rationality to the decision-making process
 Historical perspectiveincludes three viewpoints- classical, behavioral, and quantitative
 Contemporary Perspectiveincludes three viewpoints- systems, contingency, and quality management
 Classical viewpoint

emphasizes finding ways to manage work more efficiently

has two branches- scientific and administrative

 Scientific Managementemphasized the scientific study of work methods to improve the productivity of individual workers
 Administrative Managementconcerned with managing the total organization
 Behavioral Viewpointemphasized the importance of understanding human behavior and of movtivating employees toward achievement
 Human relations movementproposed that better human relations coulld increase worker productivity
 Behavioral Sciencerelies on scientific research for developing theories about human behavior that can be used to provide practical tools for managers
 Quantitative Management

the application to management of quantitative techniques, such as statistics and computer simulations

 

branches:

  1. management science
  2. operations management
 Management sciencefocuses on using mathematics to aid in problem solving and decision making
 Operations Managementfocuses on managing the production and delivery of an organization's products or services more effectively
 Systema set of interrelated parts that operate together to achieve a common purpose
 Systems viewpointregards the organization as a system of interrelated parts
 Subsystemsparts making up the whole system
 Inputsthe people, money, information, equipment, and materials required to produce an organization's goods or services
 Outputsthe products, services, profits, losses, employee satisfaction or discontent, and the like that are produced by the organization
 Transformation Processesthe organization's capabilities in management and technology that are applied to converting inputs into outputs
 Feedbackinformation about the reaction of the environment to the outputs that affects the inputs
 Open Systemcontinually interacts with its environment
 Closed systemhas little interaction with its environment
 Contingency Viewpointemphasizes that a manager's approach should vary according to the individual and the environmental situation
 Quality-management viewpointincludes quality control, quality assurance, and total quality management
 Qualityrefers to the total ability of a product or service to meet customer needs
 Quality controlthe strategy for minimizing errors by managing each stage of production
 Quality assurancefocuses on the performance of workers, urging employees to strive for "zero defects"
 Total Quality Management (TQM)a comprehensive approach- led by top management and supported throughout the organiation - dedicated to continuous quality improvement, training, and customer satisfaction
 Learning Organizationan organization that actively creates, acquires, and transfers knowledge within itself and is able to modify its behavior to reflect new knowledge
 Virtual Organizationan organization whose members are geographically apart, usually working with e-mail, collaborative computing, and other computer connections
 Boundaryless Organizationa fluid, highly adaptive organization whose members, linked by information technology, come together to collaborate on common tasks; the collaborators may include competitors, suppliers, and customers
 Knowledge workersomeone whose occupation is principally concerned with generating or interpreting information, as opposed to manual labor
 Human capitalthe economic or productive potential of employee knowledge, experience, and actions
 Social capitalthe economic or productive potential of storng, trusting, and cooperative relationships
 Stakeholdersthe people whose interests are affected by an organization's activities
 Internal stakeholdersconsist of employees, owners, and the board of directors, if any
 Ownersconsist of all those who can claim it as their legal property
 External Stakeholderspeople or groups in the organization's external environment that are affected by it
 Task environmentconsists of 11 groups that present you with daily tasks to handle: customers, competitors, suppliers, distributors, strategic allies, employee organizations, local communities, financial institutions, government regulators, special-interest groups, and mass media
 Customersthose who pay to use an organization's goods or services
 Competitorspeople or organizations that compete for customers or resources
 Suppliera person or an organization that provides supplies- that is, raw materials, services, equipment, labor, or energy - to other organizations
 Distributora person or an organization that helps another organization sell its goods and services to customers
 Strategic alliesdescribes the relationship of two organizations who join forces to achieve advantages neither can perform as well alone
 Clawbacksrescinding the tax breaks when firms don't deliver promised jobs
 Government regulatorsregulatory agencies that establish ground rules under which organizations may operate
 Special-interest groupsgroups whose members try to influence specific issues
 General environment/ Macroenvironment

includes six forces:

  • economic
  • technological
  • sociocultural
  • demographic
  • political-legal
  • international
 Economic forcesconsist of the general economic conditions and trends- unemployment, inflation, interest rates, economic growth - that may affect an organization's performance
 Technological forcesnew developments in methods for transforming resources into goods or services
 Sociocultural forcesinfluences and trends originating in a country's, a society's, or a culture's human relationships and values that may affect an organization
 Demographic forcesinfluences on an organization arising from changes in the characteristics of a population, such as age, gender, or ethnic origin
 Political-legal forceschanges in the way politics shape laws and laws shape the opportunities for and threats to an organization
 International Forceschanges in the economic, political, legal, and technological global system that may affect an organization
 Ethical dilemmaa situation in which you have to decide whether to pursue a course of action that may benefit you or your organization but that is unethical or even illegal
 Ethicsthe standards of right and wrong that influence behavior
 Ethical behaviorbehavior that is accepted as "right" as opposed to "wrong" according to those standards
 Value systemthe pattern of values within an organization
 Valuesthe relatively permanent and deeply held underlying beliefs and attitudes that help determine a person's behavior
 Utilitarian Approachguided by what will result in the greatest good for the greatest number of people
 Individual approachguided by what will result in the individual's best long-term interests, which ultimately are in everyone's self-interest
 Moral-rights approachguided by respect for the fundamental rights of human beings
 Justice approachguided by respect for impartial standards of fairness and equity
 Insider tradingthe illegal trading of a company's stock by people using confidential company information
 Ponzi schemeusing cash from newer investors to pay off older ones
 Sarbanes-Oxley Act of 2002 (SarbOx or SOX)established requirements for proper financial record keeping for public companies and penalties of as much as 25 years in prison for noncompliance
 Ethical climaterepresents employees' perceptions about the extent to which work environments support ethical behavior
 Code of ethicsconsists of a formal written set of ethical standards guiding an organization's actions
 Whistle-bloweran employee who reports organizational misconduct to the public
 social responsibilitya manager's duty to take actions that will benefit the interests of society as well as of the organization
 Corporate Social Responsibility (CSR) the notion that corporations are expected to go above and beyond following the law and making a profit
 Philanthropymaking charitable donations to benefit humankind
 Diversityrepresents all the ways people are unlike and alike- the differences and similarities in age, gender, race, religion, ethnicity, sexual orientation, capabilities, and socioeconomic background
 Personalitythe stable physical and mental characteristics responsible for a person's identity
 Internal dimensions of diversitythose human differences that exert a powerful, sustained effect throughout every stage of our lives
 External dimensions of diversityinclude an element of choice; they consist of the personal characteristics that people acquire, discard, or modify throughout their lives
 Glass ceilingthe metaphor for an invisible barrier preventing women and minorities from being promoted to top executive jobs
 Americans with Disabilities Actprohibits discrimination against the disabled
 underemployedworking at jobst that require less education than they have
 Ethnocentrismthe belief that one's native country, culture, language, abilities, or behavior is superior to that of another culture
 Globalizationthe trend of the world economy toward becoming a more interdependent system
 Global villagerefers to the "shrinking" of time and space as air travel and the electronic media have made it easier for the people of the globe to communicate with one another
 Global economyrefers to the increasing tendency of the economies of the world to interact with one another as one market instead of many national markets
 Multinational Corporation

A business firm with operations in several countries

 

Also called a multinational enterprise

 Multinational Organizationa nonprofit organization with operations in several countries
 Ethnocentric Managersbelieve that their native country, culture, language, and behavior are superior to all others
 Parochialisma narrow view in which people see things solely through their own perspective
 Polycentric Managerstake the view that native managers in the foreign offices best understand native personnel and practices, so the home office should leave them alone
 Geocentric Managers

accept that there are differences and similarities between home and foreign personnel and practices and that and that they should use whatever techniques are most effective

 

 Maquiladorasmanufacturing plants allowed to operate in Mexico with special privileges in return for employing Mexican citizens
 Outsourcingusing suppliers outside the company to provide goods and services
 Global Outsourcingusing suppliers outside the United States to provide labor, goods, or services
 Importinga company buys goods outside the country and resells them domestically
 Exportinga company produces goods domestically and sells them outside the country
 Countertradingbartering goods for goods
 Licensinga company allows a foreign company to pay it a fee to make or distribute the first company's product or service
 Franchisinga form of licensing in which a company allows a foreign company to pay it a fee and a share of the profit in return for using the first company's brand name and a package of materials and services
 Joint Venture/Strategic Allianceshare the risks and rewards of starting a new enterprise together with a foreign company in a foreign country
 Wholly-owned subsidiarya foreign subsidiary that is totally owned and controlled by an organization
 Greenfield Venturea foreign subsidiary that the owning organization has built from scratch
 Free tradethe movement of goods and services among nations without political or economic obstruction
 Trade Protectionismthe use of government regulations to limit the import of goods and services
 Tariffa trade barrier in the form of a customs duty, or tax, levied mainly on imports
 Import Quotaa trade barrier in the form of a limit on the numbers of a product that can be imported
 Dumpingthe practice of a foreign company's exporting products abroad at a lower price than the price in the home market - or even below the costs of production- in order to drive down the price of the domestic product
 Embargoa complete ban on the import or export of certain products
 World Trade Organization (WTO)designed to monitor and enforce trade agreements
 World Bankits purpose is to provide low-interest loans to developing nations for improving transportation, education, health, and telecommunications
 International Monetary Fund (IMF)designed to assist in smoothing the flow of money between nations
 Exchange ratethe rate at which one country's currency can be exchanged for another country's currency
 Trading Bloc/Economic Communitya group of nations within a geographical region that have agreed to  remove trade barriers with one another
 North American Free Trade Agreement (NAFTA)a trading bloc consisting of the United States, Canada, and Mexico
 European Union (EU)consists of 27 trading partners in Europe
 Asia-Pacific Economic Cooperation (APEC)a group of 21 Pacific Rim countries whose purpose is to improve economic and political ties
 Association of Southeast nations (ASEAN)a trading bloc consisting of 11 countries in Asia
 Mercosurthe largest trade bloc in Latin American and has four core members --Argentina, Brazil, Paraguay, and Uruguay, with Venezuela scheduled to become a full member upon ratification by other countries-- and five associate  members: Bolivia, Chile, Colombia, Ecuador, and Peru 
 Central America Free Trade Agreement (CAFTA-DR)involves the United States and Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua- is intended to reduce tariffs and other barriers to free trade
 Most favored nationtrading status describes a condition in which a country grants other countries favorable trading treatment such as the reduction of import duties
 Culturethe shared set of beliefs, values, knowledge, and patterns of behavior common to a group of people
 Low-context cultureshared meanings are primarily derived from written and spoken words
 High-context culturepeople rely heavily on situational cues for meaning when communicating with others
 Hofstede model of four cultural dimensions

identified four dimensions along which national cultures can be placed

  1. individualism/collectivism
  2. power distance
  3. uncertainty avoidance
  4. masculinity/femininity
 GLOBE projecta massive and ongoing cross-cultural investigation of nine cultural dimensions involved in leadership and organizational processes
 Monochronic Timea preference for doing one thing at a time
 Polychronic timea preference for doing more than one thing at a time
 Expatriatespeople living or working in a foreign country
 Planningcoping with uncertainty by formulating future courses of action to achieve specified results
 Defendersexpert at producing and selling narrowly defined products or services
 Prospectorsfocus on developing new products or services and in seeking out new markets, rather than waiting for things to happen
 Analyzerslet other organizations take the risks of product development and marketing and then imitate (or perhaps slightly improve on) what seems to work best
 Reactorsmake adjustments only when finally forced to by environmental pressures
 MissionAn organization's purpose or reason for being
 Mission Statementexpresses the purpose of the organization
 Vision

a long-term goal describing what an organization wants to become

a clear sense of the futre and the actions needed to get there

 Vision Statementexpresses what the organization should become, where it wants to go strategically
 Strategic Planningtop managers determine what the organization's long-term goals should be for the next 1-5 years with the resources they expect to have available
 Tactical PlanningMiddle Managers determine what contributions their deparments or similar work units can make with their given resources during the next 6-24 months
 Operational PlanningFirst-line managers determine how to accomplish specific tasks with available resources within the next 1-52 weeks
 Goal/Objectivea specific commitment to achieve a measurable result within a stated period of time
 Means-end chainGoals are arranged in a hierarchy because in the cain of management (operational, tactical, strategic) the accomplishment of low-level goals is the means leading to the accomplishment of high-level goals or ends
 Strategic goalsset by and for top management and focus on objectives for the organization as a whole
 Tactical goalsset by and for middle managers and focus on the actions needed to achieve strategic goals
 Operational Goalsset by and for first-line managers and are concerned with short-term matters associated with realizing tactical goals
 SMART goala goal this is specific, measurable, attainable, results-oriented, and has target dates
 Action plandefines the course of action needed to achieve the stated goal
 Operating plantypically designed for a 1-year period, it defines how you will conduct your business based on the actoion plan; it identifies clear targets such as revenues, cash flow, and market share
 Standing planplans developed for activities that occur repeatedly over a period of time
 Policya standing plan that outlines the general response to a designated problem or situation
 Procedure/ Standard Operating Procedurea standing plan that outlines the response to particular problems or circumstances
 Rule a standing plan that designates specific required action
 Single-use plansplans developed for activities that are not likely to be repeated in the future
 Programa single-use plan encompassing a range of projects or activities
 Projecta single-use plan of less scope and complexity than a program
 Management by Objectives (MBO)

a four-step process in which

  1. managers and employees jointly set objectives for the employees
  2. managers develop action plans
  3. managers and employees periodically review the employee's performance
  4. the manager makes a performance appraisal and rewards the employee according to the results
 Cascadingobjectives are structured in a unified hierarchy, becoming more specific at lower levels of the organization
 Planning/Control Cycle

has two planning steps:

  1. make the plan
  2. carry out the plan

and two control steps:

      3. control the direction by comparing results with the plan

      4. control the direction in two ways:

  • by correcting deviations in the plan being carried out
  • by improving future plans
 Business Plana document that outlines a proposed firm's goals, the strategy for achieving them, and the standards for measuring success
 Strategya large-scale action plan that sets the direction for an organization
 Strategic Managementa process that involves managers from all parts of the organization in the formulation and the implementation of strategies and strategic goals
 Strategic positioningattempts to achieve sustainable competitive advantage by preserving what is distinctive about a company
 Grand Strategy

after an assessment of current organizational performance, then explains how the organization's mission is to be accomplished

 

three common types are growth, stability, and defensive

 Growth Strategya grand strategy that involves expansion- as in sales revenues, market shares, number of employees, or number of customers or (for nonprofits) clients served
 Stability Strategya grand strategy that involves little or no significant change
 Defensive Strategy

Also called a retrenchment strategy

a grand strategy that involves reduction in the organization's efforts

 Strategy formulationthe process of choosing among different strategies and altering them to best fit the organization's needs
 Strategy implementationputting strategic plans into effect
 Strategic Controlconsists of monitoring the execution of strategy and making adjustments, if necessary
 Competitive Intelligencemenas gaining information about one's competitors' activities so that you can anticipate their moves and react appropriately
 Environmental ScanningCareful monitoring of an organization's internal and external environments to detect early signs of opportunities and threats that may influence the firm's plans
 SWOT/Situational Analysisa search for the strengths, weaknesses, opportunities, and threats affecting the organization
 Organizational Strengthsthe skills and capabilities that give the organization special competencies and competitive advantages in executing strategies in pursuit of its mission
 Organizational Weaknessesthe drawbacks that hinder an organization in executing strategies in pursuit of its mission
 Organizational Opportunitiesenvironmental factors that the organization may exploit for competitive advantage
 Organizational Threatsenvironmental factors that hinder an organization's achieving a competitive advantage
 Forecasta vision or projection of the future
 Trend analysisa hypothetical extension of a past series of events into the future
 Contingency Planning/ Scenario Planning/ Scenario Analysisthe creation of alternative hypothetical but equally likely future conditions
 Porter's model for industry analysis

business-level strategies originate in five primary competitive forces in the firm's environment

  1. threats of new entrants
  2. bargaining power of suppliers
  3. bargaining power of buyers
  4. threats of substitute products or services
  5. rivalry among competitors
 Porter's Four competitive strategies (four generic strategies)
  1. cost-leadership
  2. differentiation
  3. cost-focus
  4. focused-differentiation
 Cost-leadership strategykeep the costs, and hence prices, of a product or service below those of competitors and to target a wide market
 Differentiation strategyto offer products or services that are of unique and superior value compared with those of competitors but to target a wide market
 Cost-focus strategykeep the costs, and hence prices, of a product or service below those of competitors and to target a narrow market
 Focused-differentiation strategyoffer products or services that are of unique and superior value compared to those of competitors and to target a narrow market
 Single-Product Strategya company makes and sells only one product within its market
 Diversificationoperating several businesses in order to spread the risk
 Unrelated diversificationoperating several businesses under one ownership that are not related to one another
 Related diversificationan organization under one ownership operates separate businesses that are related to one another
 Synergythe economic value of separate, related businesses under one ownership and management is greater together than the businesses are worth separately
 BCG Matrix

a means of evaluating strategic business units on the basis of

  • their business growth rates
  • their share of the market
 Executionnot simply tactics, it is a central part of any company's strategy.  It consists of using questioning, analysis, and follow-through to mesh strategy with reality, align people with goals, and achieve results promised
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