Unit 3 Business Management

Mission Statement

Defines the organization's purpose

Vision Statement

Describes the desired future state

Values Statement

Outlines the core beliefs guiding decision-making

SWOT Analysis

Evaluation of internal strengths and weaknesses, as well as external opportunities and threats

Strategic Objectives

Setting SMART goals to guide the company's strategy

Levels of Strategy

Corporate-Level, Business-Level, and Functional-Level

Corporate-Level Strategy

Overall direction of the company (e.g., diversification, mergers, acquisitions)

Business-Level Strategy

How individual business units compete in the market (e.g., cost leadership, differentiation)

Functional-Level Strategy

How specific functions (e.g., marketing, finance, HR) contribute to achieving business objectives

Porter's Generic Strategies

Cost leadership, differentiation, and focus strategy

Sustainable Competitive Advantage

The ability to maintain an advantage over time (e.g., through innovation, brand loyalty)

Global Strategy

Approaches for organizations to enter and compete in international markets

SWOT Analysis

a planning tool used to analyze an organization's strengths, weaknesses, opportunities, and threats

Strategic Fit

A state in which an organization's strategy is consistent with its external opportunities and circumstances and its internal structure, resources, and capabilities.

Porter's Five Forces

threat of entry, threat of substitute, supplier power, buyer power, and competitive rivalry

Diversification

Spreading out investments to reduce risk

Core Competencies

those functions that the organization can do as well as or better than any other organization in the world

Leadership Styles

autocratic, democratic, laissez-faire

Autocratic Leadership

centralized decision making with leader making decisions and using power to command and control others

Democratic Leadership

Shared decision-making

Laissez-Faire Leadership

Hands-off leadership, allowing employees to make decisions

Trait Theory

Leadership is based on certain traits (e.g., confidence, decisiveness)

Behavioral Theory

Leadership is based on learned behaviors (e.g., task-oriented vs. people-oriented)

Contingency Theories

Leadership style must fit the situation (e.g., Fiedler's Contingency Theory)

Transformational Leadership

Leaders inspire and motivate followers to achieve extraordinary outcomes

Transactional Leadership

Leaders focus on supervision, organization, and performance; reward and punishment

Maslow's Hierarchy of Needs

Understanding human motivation from physiological needs to self-actualization

Herzberg's Two-Factor Theory

Motivation factors vs. hygiene factors

Expectancy Theory

Motivation depends on expected outcomes

Path-Goal Theory

Leaders help followers achieve their goals by providing necessary support

Types of Power

Coercive, reward, legitimate, expert, and referent power

Power and Influence Tactics

Understanding how leaders use influence to guide others (e.g., persuasion, coalition building)

Organizational Culture

The shared values, beliefs, and behaviors within an organization

Elements of Organizational Culture

Symbols, language, rituals, values

Cultural Dimensions (Hofstede's Dimensions)

Power distance, individualism vs. collectivism, uncertainty avoidance, masculinity vs. femininity, long-term vs. short-term orientation

Creating and Maintaining Culture

Leadership, recruitment, rituals, and stories

Types of Organizational Culture

clan, adhocracy, market, hierarchy

Clan Culture

Emphasizes flexibility, collaboration, and employee involvement

Adhocracy Culture

Focuses on innovation and risk-taking

Market Culture

Results-oriented, with a focus on competition and achieving goals

Hierarchy Culture

Structured and controlled, with a focus on efficiency and stability

Types of Diversity

Demographic, functional, cognitive diversity

Benefits of Diversity

Innovation, better decision-making, improved employee satisfaction

Challenges of Diversity

Communication barriers, cultural misunderstandings

Managing Diversity

Inclusive practices, training programs, leadership commitment

Power Distance

a value orientation that refers to the extent to which less powerful members of institutions and organizations within a culture expect and accept an unequal distribution of power

Forces Driving Change

Technological advances, market conditions, globalization, customer demands

Types of Change

Incremental vs. transformational change

Lewin's Change Model

Unfreeze, Change, Refreeze

Kotter's Eight-Step Change Model

Steps for successful organizational change (e.g., creating urgency, forming a guiding coalition, generating short-term wins)

Types of Innovation

Product innovation, process innovation, business model innovation

Sources of Innovation

Research and development, customer feedback, collaboration

Innovative Culture

Fostering creativity, tolerance for failure, and encouraging risk-taking

Sources of Resistance

Fear of the unknown, loss of control, lack of trust

Managing Resistance

Communication, participation, negotiation, coercion

Organizational Development (OD)

Systematic efforts to improve organizational effectiveness through planned change

Role of Leaders in Change

Visionary leadership, communication, and motivating others through change