Management, Organizational Culture & Global Business: Key Concepts and Strategies

Management

The process of planning, organizing, leading, and controlling resources to achieve organizational goals.

Efficiency

Using the least amount of resources to accomplish something.

Effectiveness

Actually achieving the desired goal.

Planning

Deciding what needs to be done.

Organizing

Deciding how resources and people will be arranged.

Leading

Motivating and directing employees.

Controlling

Checking performance and correcting problems.

Interpersonal role

Working with and communicating with people.

Informational role

Gathering and sharing information.

Decisional role

Making decisions and solving problems.

Top managers

Make major decisions and set the organization's direction.

Middle managers

Turn top management's plans into actions.

First-line managers

Direct employees who perform the organization's daily work.

Arrivers

Managers who successfully move up and perform well.

Derailers

Managers who fail or stop progressing because of problems such as poor relationships, inability to adapt, or poor leadership.

Technical skills

Knowing how to perform specific tasks.

Human skills

Working effectively with people.

Conceptual skills

Understanding the organization as a whole.

Major management mistakes

Poor communication, failure to build relationships, inability to adapt, poor leadership, and failing to understand employees.

Expectations vs. experiences for new managers

New managers often expect management to mean having more freedom and authority, but it can involve more responsibility, stress, meetings, and dealing with employee problems.

Organizational culture

The shared values, beliefs, and behaviors that determine how people in an organization act.

Artifacts

Things you can see, such as dress, office design, symbols, stories, and ceremonies.

Invisible aspects

Values, beliefs, assumptions, and attitudes.

Clan culture

Friendly, teamwork-oriented, family-like.

Adhocracy culture

Creative, innovative, flexible.

Market culture

Competitive and focused on results.

Hierarchy culture

Structured, formal, and focused on rules.

Environmental change

How quickly an organization's external environment changes.

Stable environment

Changes slowly and predictably.

Dynamic environment

Changes quickly and unpredictably.

Punctuated equilibrium

Long periods of stability followed by short periods of major change.

Resource scarcity

When an organization does not have enough resources available.

Uncertainty

When managers cannot accurately predict what will happen in the environment.

Purpose statement

Explains why an organization exists and what it does.

Strategic objective

A specific goal that helps accomplish the organization's strategy.

BHAG

A Big Hairy Audacious Goal—a very large, challenging, long-term goal.

Tactical plan

Explains how a department will help achieve the strategic plan.

Management by objectives (MBO)

A system where managers and employees work together to establish goals and evaluate performance based on those goals.

Operational plan

Detailed short-term plans for daily activities.

Single-use vs. standing plans

Single-use: Used for one specific situation. Standing: Used repeatedly.

Policy vs. procedure vs. rule

Policy: General guideline for decision-making. Procedure: Steps for handling a situation. Rule: Specific requirement about what must or must not be done.

Budget

A plan showing how money and other financial resources will be used.

Programmed vs. nonprogrammed decisions

Programmed: Routine decisions with established solutions. Nonprogrammed: New or unusual decisions requiring judgment.

Rational vs. intuitive decision-making

Rational: Uses a logical process and information. Intuitive: Relies on experience, instincts, and feelings.

Satisficing

Choosing a solution that is good enough instead of searching for the absolute best solution.

Group decision-making advantages

More ideas, more information, and different perspectives.

Group decision-making disadvantages

Takes longer and can lead to conflict or groupthink.

Groupthink

The group prioritizes agreement over making the best decision.

Equality bias

Giving everyone's opinion equal weight even when some people have more relevant knowledge.

Minority domination

One person or a small group controls the decision.

Cognitive vs. affective conflict

Cognitive: Disagreement about ideas or information. Affective: Personal or emotional disagreement.

Competitive inertia

A company's unwillingness or inability to change its competitive actions.

Strategic dissonance

The difference between what a company says it is doing strategically and what it actually does.

SWOT

Strengths: Internal advantages. Weaknesses: Internal disadvantages. Opportunities: External possibilities. Threats: External dangers.

Four types of resources

Financial, Physical, Human, Organizational.

Distinctive competence vs. core capability

Distinctive competence: Something the company does especially well compared with competitors. Core capability: A valuable ability that helps the company compete.

Strategic group

Companies in the same industry that use similar strategies.

Core vs. secondary firms

Core firms are central members of the strategic group and usually compete directly with one another. Secondary firms are less directly involved.

Porter's Five Forces

Threat of new entrants, Bargaining power of suppliers, Bargaining power of buyers, Threat of substitutes, Rivalry among competitors.

Barriers to entry

Things that make it difficult or expensive for new companies to enter an industry.

Corporate-level strategy

Determines which businesses or industries a company should compete in.

Industry-level strategy

Determines how a company will compete within an industry.

Firm-level strategy

Focuses on how a particular company will compete.

BCG Matrix

⭐ Stars: High growth, high market share → invest/grow. 🐄 Cash cows: Low growth, high market share → maintain and use profits. ❓ Question marks: High growth, low market share → decide whether to invest or leave. 🐕 Dogs: Low growth, low market share → usually reduce or eliminate.

Grand strategy

A broad overall strategy designed to achieve major organizational goals.

Stability strategy

Maintains the organization's current situation.

Growth strategy

Expands the organization.

Retrenchment/recovery strategy

Reduces operations or makes major changes to recover from problems.

Adaptive strategies

Defender: Focuses on protecting an existing market. Prospector: Searches for new opportunities. Analyzer: Combines defender and prospector strategies. Reactor: Responds to changes only when forced to.

Positioning strategies

Cost leadership: Compete through low costs. Differentiation: Compete by being unique. Focus: Target a specific market segment.

Focused cost leadership

Offer low prices/costs to a specific market segment.

Focused differentiation

Offer something unique to a specific market segment.

Attack vs. response

Attack: A competitive move intended to gain an advantage. Response: A move made in reaction to a competitor.

Technological lockout

When a company becomes stuck using an existing technology and cannot easily switch to a newer one.

Organizational decline

A decrease in an organization's resources, performance, or ability to survive.

Technological discontinuity

A major technological breakthrough that replaces an existing technology.

Discontinuous change

Large, sudden changes.

Dominant design

A product or technology design that becomes the standard in an industry.

Incremental change

Small improvements made gradually.

Design competition

Companies compete to determine which new technology/design becomes dominant.

Technological substitution

A new technology replaces an older technology.

Proactive vs. reactive change

Proactive: Change before a problem occurs. Reactive: Change after a problem occurs.

Unfreezing

Preparing employees and the organization to accept change.

Change intervention

Actually introducing and implementing the change.

Refreezing

Making the new behavior or system permanent.

Creative work environment

A workplace that encourages employees to develop and use new ideas.

Resistance to change

Employees may resist because of fear, uncertainty, habit, lack of trust, or concern about losing something.

Ways to overcome resistance

Communication, employee participation, training, support, negotiation, and showing employees the benefits of change.

MNC vs. direct foreign investment

MNC: A company that operates in multiple countries. Direct foreign investment: When a company invests directly in business operations in another country.

Trade barrier

A restriction that makes international trade more difficult.

Two types of trade barriers

Tariffs: Taxes placed on imported goods. Nontariff barriers: Restrictions such as quotas or regulations.

Protectionism

Government actions designed to protect domestic businesses from foreign competition.

Trade agreement

An agreement between countries that establishes rules for international trade.

Trade zone

A group of countries that agree to reduce or eliminate trade barriers between them.

Consistency vs. adaptation

Consistency: Using the same products/strategies across countries. Adaptation: Changing products or strategies to fit local markets.

Exporting

Selling products produced in one country to customers in another country.

Cooperative contracts

Agreements where companies work together without necessarily creating a separate company.

Strategic alliance

Two or more companies cooperate to accomplish a specific business goal.

Wholly owned affiliate

A foreign operation completely owned by the parent company.

Global new venture

A company created with international markets in mind from the beginning.