Management Lecture Review: Global Management, Strategy, Leadership, and Ethics

Comprehensive practice flashcards formatted as Question and Answer covering all key lecture notes on global strategy, planning, organizational design, control systems, team dynamics, ethics, and external environments.

Which Stage 2 cooperative contract involves licensing an entire business system, including brand, recipes, and training, in return for an upfront fee plus royalties?

Franchising. The franchisor licenses the entire business and provides training, marketing help, and an exclusive territory for a fee plus royalties.

How does licensing differ from franchising when a firm allows a foreign company to produce its product or use its brand?

In licensing, the licensor receives royalties for letting a licensee produce its product, sell its service, or use its brand in a foreign market, but does not provide a full operating business system.

What are the four traditional stages of internationalization described in the lecture?

Stage 1: Exporting (make the product at home and ship abroad); Stage 2: Cooperative contracts (licensing and franchising); Stage 3: Strategic alliance (combining key resources, costs, risks, technology, and people); Stage 4: Wholly owned affiliate (buying another company outright).

What is a global new venture, and how does its path differ from traditional internationalization?

A global new venture is a company founded with sales, employees, and financing in multiple countries from its first day, skipping the traditional four sequential stages to pursue an active global strategy from the start.

According to the lecture video, what was the core problem that caused Mustang Jeans to struggle in a foreign market?

An inability to understand cross-cultural differences in communication patterns.

How do high-context and low-context cultures differ in how messages are communicated and negotiations are conducted?

In high-context cultures (common in South America, Asia, and the Middle East), the real message is carried by tone, silence, relationships, and shared background, and the relationship matters more than written contract terms. In low-context cultures (common in North America and Western Europe), people expect direct speech and value written contract terms over relationship-building.

What are the five Hofstede cultural dimensions identified in the lecture?

1. Power distance (degree of accepting unequal power distribution and status differences); 2. Individualism (putting personal goals ahead of group goals); 3. Masculinity (prizing assertiveness, achievement, power, control, and materialism); 4. Uncertainty avoidance (feeling threatened by ambiguity and avoiding uncertain situations through rules); 5. Long-term vs. short-term orientation (delaying gratification for long-term success vs. wanting instant gratification).

What is the difference between a tariff and a non-tariff barrier, and what are the five types of non-tariff barriers?

A tariff is a tax placed on imported goods (such as a $25\%$ tax on imported cars). Non-tariff barriers restrict imports through non-tax mechanisms, comprising five types: quotas, voluntary export restraints, government import standards, government subsidies, and customs valuation/classification.

Why must a manager still pay close attention when a new free-trade agreement opens up foreign markets?

Free-trade agreements create new business opportunities but also intensify competition, and addressing that competition is the manager's job.

What three main characteristics define an attractive foreign business climate?

1. Easy access to growing markets (rising purchasing power, few established competitors); 2. An effective but cost-efficient place to build (low-cost sites for factories); 3. Minimal political risk.

How does political risk differ from policy uncertainty in international business?

Political risk refers to political uncertainty resulting from war, revolution, death of leaders, or social unrest (such as an overseas factory threatened by a coup). Policy uncertainty refers to the risk from sudden changes in laws and government policies that directly affect how foreign companies do business.

What two critical components should expatriate preparation include before sending an employee abroad?

Language and cross-cultural training, plus consideration of spouse, family, and dual-career issues.

According to the Zachary article, what is a "mongrel" employee and why are they valuable to an organization?

A "mongrel" is an employee hired from a diverse background who is encouraged to retain their differences, allowing the company to make the most of their uniqueness and the creative tension those differences produce.

What characteristics make an organizational mission statement effective?

An effective mission briefly defines the organization's purpose for stakeholders and is enduring, inspirational, clear, and consistent with company values.

How do proprietorships/partnerships, corporations, and Subchapter-S corporations/LLCs differ regarding personal liability and taxation?

Proprietorship/partnership: Oldest and simplest, not a distinct legal entity, profits reported on personal tax returns, high personal liability for debts. Corporation: Distinct legal entity owned by stockholders with no personal responsibility for debts, can sign binding contracts, pays corporate tax. Subchapter-S corporation / LLC: Separates personal from business assets so only the business is liable, and profits pass through to owners' tax returns without corporate taxation.

What alternative approach does "burn your business plan" advise for new entrepreneurs?

Act, don't plan: build a website that communicates the business model, get publicity, keep finances under control, and make sales before worrying about a formal business plan.

What is the primary difference between equity funding and debt funding?

Equity funding involves selling partial ownership to investors for cash that never has to be repaid. Debt funding involves borrowing from creditors where no ownership is given up, but the loan must be repaid. (Awards from competitions serve as another funding source.)

What are the four ways someone can enter into business?

1. Family-owned; 2. Start new; 3. Buy an existing business; 4. Buy a franchise.

What are the differences among strategic, operational, single-use, and standing plans?

Strategic plans cover $2$ to $5\text{ years}$ and position the firm against competitors (starting with a purpose statement and strategic objectives). Operational plans are developed by lower-level managers to cover $30\text{ days}$ to $6\text{ months}$. Single-use plans cover unique, one-time events. Standing plans cover frequently recurring events.

What are the three types of standing plans, and what does each do?

1. Policy: A general course of action; 2. Procedure: A specific series of steps; 3. Rule/regulation: Specifies exactly what must or must not happen.

What are the six steps in the rational decision-making process?

1. Define the problem; 2. Identify decision criteria; 3. Weigh the criteria; 4. Generate alternatives; 5. Evaluate each alternative; 6. Compute the optimal decision.

If an apartment is scored on rent (weight $0.5$), distance to campus (weight $0.3$), and amenities (weight $0.2$) with scores of $8$, $6$, and $4$ respectively, what is the optimal-decision score and method?

The score is $6.6$. Method: Multiply each rating by its weight and sum them: $(8 \times 0.5) + (6 \times 0.3) + (4 \times 0.2) = 4 + 1.8 + 0.8 = 6.6$. This is calculated for each alternative to pick the highest score.

What is the Nominal Group Technique, and what specific problem does it help avoid?

A decision-making technique that begins with quiet time where each member writes down ideas individually before sharing. It avoids production blocking (waiting to share because someone else is talking) and increases good conflict.

How does the Delphi Technique function in organizational decision making?

A company surveys a panel of anonymous outside experts using questionnaires, compiles and shares the summary, and repeats the process until consensus is reached, without the experts ever meeting in person.

What four characteristics must a key organizational resource possess to create a sustainable competitive advantage?

It must be valuable, rare, imperfectly imitated (extremely costly to imitate), and non-substitutable.

What are the four components of a SWOT (situational) analysis, and which are internal versus external?

Strengths and Weaknesses are internal factors; Opportunities and Threats are external environmental factors.

What are the four product categories of the BCG matrix based on market growth and market share?

1. Star: Dominant market share in a fast-growing market; 2. Cash cow: Dominant market share in a low-growth market; 3. Question mark: Low market share in a rapidly growing market (requires heavy investment); 4. Dog: Small market share in a slow-growing market.

What are the three grand strategies available to corporate-level planning?

Stability (keep doing what the company is doing), retrenchment/recovery (cut back the scale or scope of operations), and growth (expand into new products or markets).

What are Porter's four positioning strategies based on target scope and source of advantage?

1. Cost leadership: Broad target, lower cost; 2. Differentiation: Broad target, differentiated product; 3. Cost focus: Narrow niche target, lower cost; 4. Focused differentiation: Narrow niche target, differentiated product.

How do red ocean and blue ocean business strategies differ?

A red ocean strategy involves direct head-to-head competition, price cuts, and route attacks in crowded existing markets. A blue ocean strategy creates uncontested market space in "deep blue waters" with no direct rivals through entrepreneurial innovation.

What is a strategy canvas, and what is its purpose?

A strategy canvas is a graphical chart showing how a firm and its competitors score on key competing factors (such as price, service, and convenience), used to guide blue ocean thinking.

What are the five dimensions of the RATER service quality framework, and which is most important?

Reliability (the most important), Assurance, Tangibles, Empathy, and Responsiveness.

What are the five defining characteristics of service provision?

1. Customers participate; 2. Services are consumed immediately as they are produced; 3. Provided where and when the customer desires; 4. Labor intensive; 5. Intangible.

How do feedforward, concurrent, and feedback control differ?

Feedforward control occurs before operations begin, monitoring inputs to anticipate and prevent problems. Concurrent control occurs during operations, monitoring processes and adjusting activities in real time. Feedback control occurs after operations, monitoring products or results to learn from past mistakes.

What are the five organizational control methods described in the lecture?

1. Bureaucratic (top-down rules and procedures); 2. Objective (measurable output targets); 3. Normative (shared values and beliefs); 4. Concertive (shaped by autonomous work groups); 5. Self-control.

What is variance analysis in managerial control, and what types of budgets does it evaluate?

Variance analysis is the process of comparing actual performance against budgeted figures and investigating differences. Common budgets include sales (revenue), operating (expenses), income statements, and balance sheets.

What four equally important perspectives are tracked in the Balanced Scorecard?

Finances, customers, internal operations, and innovation and learning.

What is Economic Value Added (EVA), and how is it calculated if a firm generates $\$10\text{M}$ in profit with a capital cost of $\$8\text{M}$?

Economic Value Added (EVA) is the amount by which profits exceed the cost of capital in a given year. In this case: \text{EVA} = \10\text{M} - \$8\text{M} = \$2\text{M}$.

What is the formula for PERT expected task time ($T_e$), and what is the expected time for optimistic $2\text{ days}$, most likely $5\text{ days}$, and pessimistic $14\text{ days}$?

The formula is $T_e = \frac{T_o + 4T_m + T_p}{6}$. Calculation: $T_e = \frac{2 + (4 \times 5) + 14}{6} = \frac{2 + 20 + 14}{6} = \frac{36}{6} = 6\text{ days}$.

What is a Gantt chart?

A graphical bar chart showing which project tasks must be completed at which specific times.

What are the six sequential steps of the organizational control process?

1. Set standard; 2. Measure actual performance; 3. Compare with standard; 4. Identify deviations; 5. Analyze deviations; 6. Take corrective action.

What defines the beginning and the end of a technology cycle?

A technology cycle begins with the birth of a new technology and ends when it reaches its limits and is replaced by a newer, substantially better one.

How do experiential (discontinuous) innovation and compression (incremental) innovation differ?

Experiential (discontinuous) innovation operates in uncertain environments to create brand-new products relying on intuition and testing. Compression (incremental) innovation focuses on making existing products faster and cheaper using systematic, step-by-step planning.

What are the six components required to create a creative work environment?

Encouragement, challenge, lack of impediments (conflicts, politics, hierarchy), freedom, expertise, and positive moods.

What are the three primary sources of employee resistance to change?

Self-interest, misunderstanding and distrust, and a general intolerance for change.

What are the three stages of Kurt Lewin's model of organizational change?

1. Unfreezing (driving forces overpower restraining forces); 2. Changing (new behaviors and restraining forces create a new status quo); 3. Refreezing (stabilizing the new state).

What specific actions should a manager take during the unfreezing and changing stages to manage resistance?

Unfreeze: share reasons, empathize, and communicate. Change: explain, champion, provide feedback opportunities, offer security, educate, and avoid rushing.

What are the two major managerial errors in Lewin's unfreezing stage, and which is the most serious?

1. Not establishing a great enough sense of urgency (the most serious error); 2. Not creating a powerful enough guiding coalition of supporters.

What are the three categories of Organization Development (OD) interventions and their examples?

1. Large-system interventions (survey feedback, sociotechnical systems); 2. Small-group interventions (team-building retreats, unit goal setting); 3. Person-focused interventions (one-on-one counseling/coaching, skill training).

What are the benefits and drawbacks of functional, product, customer, geographic, and matrix departmentalization?

Functional: qualified specialists and low cost, but slow cross-department coordination. Product: specialization and clear performance assessment, but costly duplication. Customer: sharp customer focus, but duplication and risk of hurting the business to please customers. Geographic: responds locally and reduces distance costs, but duplicates resources. Matrix: handles complex tasks efficiently across resource pools, but requires high coordination and dual reporting.

How does span of control influence whether an organization is tall or flat?

Span of control is the number of people reporting directly to a manager. A narrow span of control (e.g., $4$ subordinates) creates a tall organization with many layers; a wide span of control (e.g., $20$ subordinates) creates a flat organization.

How do mechanistic and organic organizational designs differ?

Mechanistic design suits stable environments and features rigid hierarchy, centralized authority, low delegation, and high specialization. Organic design suits changing environments and features lateral communication, decentralized authority, high delegation, and high generalization.

What is the core premise of contingency organizational design?

There is no single best organizational design for all companies and situations; the best design is the one that fits the external and situational context.

What is the distinction between line authority and staff authority?

Line authority gives managers the formal right to command immediate subordinates in the chain of command. Staff authority gives specialists the right to advise and assist managers in other departments without the power to command them.

What three transfers must occur to make managerial delegation effective?

1. Responsibility (assigning the task); 2. Authority (granting control over budget, resources, and personnel); 3. Accountability (holding the employee answerable for getting the job done).

Why is decentralization generally more beneficial than centralization?

Decentralization pushes decision making down to front-line managers, which develops employee capabilities, speeds up decisions, and tends to improve customer and employee satisfaction.

What are the core responsibilities and skill mixes of first-line, middle, and top managers?

First-line managers supervise non-managers, train entry-level staff, and do short-term planning. Middle managers allocate resources, link departments, and set objectives matching top goals. Top managers set overall strategic direction, build culture, and monitor the environment (requiring mostly conceptual and human skills, with minimal technical skills).

What are the four core functions of management performed in sequence?

1. Planning (setting goals and strategies); 2. Organizing (building departments, hiring, and delegating); 3. Leading (motivating employees and resolving conflict); 4. Controlling (comparing results to standards and correcting deviations).

How do a new manager's role perceptions typically evolve after six months and after one year on the job?

Initially expecting to just "be the boss," after six months they view their job as being a problem solver and troubleshooter for subordinates; after one year, they are no longer "doers," focusing instead on communication, listening, positive reinforcement, and people development.

What are the top three managerial mistakes that derail careers?

1. Insensitive to others: abrasive, intimidating, and bullying; 2. Cold, aloof, and arrogant; 3. Betraying trust.

What are Morgenstern's time management recommendations and the "4 Ds"?

Decide when to do tasks and give each to-do item a specific "home" in your schedule. When short on time, use the 4 Ds: Delete, Delay, Diminish, or Delegate.

According to Webber's rules of initiative, what types of initiatives advance careers and how do star performers use networking?

Social initiatives (like office picnics) do not advance careers; meaningful initiatives must directly relate to the company's critical path (after mastering one's core job). Star performers treat networking like bartering—building value to trade and helping many others before asking for help.

What is the team productivity equation, and what are its primary process gains and process losses?

$\text{Actual productivity} = \text{potential productivity} + \text{process gains} - \text{process losses}$. Process losses include social loafing, production blocking, and group maintenance. Process gains include information exchange, load balancing, and social facilitation.

What are groupthink and minority domination in team dynamics?

Groupthink occurs when high cohesion creates pressure not to disagree, leading to poor solutions and restricted alternatives. Minority domination occurs when one or two vocal members dominate discussions, causing other team members to lose their sense of accountability.

What is the difference between cognitive conflict and affective conflict in teams?

Cognitive (task) conflict stems from differing professional expertise and opinions on project direction; it is healthy and associated with higher performance. Affective (relationship) conflict becomes personal and hostile, leading to anger, distrust, and poor performance.

What are the four sequential stages of team development?

Forming (getting acquainted), Storming (conflict over roles and authority), Norming (agreeing upon shared standards and positive norms), and Performing (executing tasks effectively).

What is the "marshmallow principle" in team problem solving?

The principle of building a rough prototype and iteratively refining it rather than searching for a single theoretical "best" answer.

What are the six factors of ethical intensity, and which two receive the most managerial attention?

Magnitude of consequences, social consensus, probability of effect, temporal immediacy, proximity of effect, and concentration of effect. Managers pay the most attention to magnitude of consequences and social consensus.

What are the seven ethical principles used in managerial decision making?

1. Long-term self-interest; 2. Personal virtue (acting openly and truthfully, passing the "front page" test); 3. Religious injunctions; 4. Government requirements (meeting minimum legal standards); 5. Utilitarian benefits (greatest good for greatest number); 6. Individual rights; 7. Distributive justice (protecting the least fortunate).

What are the four types of workplace deviance?

1. Production deviance (impacting work output/quality; e.g., leaving early, excessive breaks, working slowly); 2. Property deviance (harming company property; e.g., theft, kickbacks); 3. Political deviance (using influence to harm others; e.g., gossiping, blaming coworkers); 4. Personal aggression (interpersonal hostility; e.g., verbal abuse).

What are the six steps of the ethical decision-making model?

1. Identify the problem; 2. Identify constituents; 3. Diagnose the situation; 4. Analyze options; 5. Make a choice; 6. Act.

How do the shareholder model (Milton Friedman) and the stakeholder model (Terry Mollner) contrast?

The shareholder model (Milton Friedman) holds that the only social responsibility of business is to maximize profits for shareholders. The stakeholder model (Terry Mollner) asserts that long-term organizational survival requires satisfying multiple stakeholder groups (employees, customers, suppliers, communities, and shareholders).

What is the difference between primary and secondary stakeholders?

Primary stakeholders are critical to the firm's ongoing survival (shareholders, employees, customers, suppliers, governments, local communities). Secondary stakeholders influence or are affected by the company but do not engage in regular transactions (media, special interest groups).

What are the four corporate social responsibilities (CSR)?

Economic, legal, ethical, and discretionary responsibilities.

What are the four strategies of corporate social responsiveness from least to most responsive?

1. Reactive (denies or declines responsibility, doing less than expected); 2. Defensive (admits problem but does only the bare minimum required); 3. Accommodative (accepts responsibility and does everything reasonably expected); 4. Proactive (anticipates problems before they occur and leads industry responses).

Does corporate social responsibility hurt financial performance, and what was BP's historic CSR milestone?

No; there is no financial trade-off, and research shows a small positive relationship between social responsibility and economic performance. BP was notable for being the first oil company to publicly acknowledge the link between carbon dioxide emissions and climate change.

What components make up the general environment versus the specific environment of an organization?

The general environment includes economic, technological, sociocultural, and political/legal trends. The specific environment includes customers, competitors, industry-specific regulations, and advocacy groups.

What is environmental scanning, and under what conditions is environmental uncertainty lowest and highest?

Environmental scanning is the systematic search of the external environment to detect issues, reduce uncertainty, and counter confirmation bias. Environmental uncertainty is lowest when change and complexity are both low; it is highest when change and complexity are extensive and resource scarcity is high.

What are the three levels of organizational culture, and why do companies celebrate stories and heroes?

1. Surface level (seen: artifacts, dress code, behaviors); 2. Expressed values and beliefs (heard: explanations, mission statements); 3. Unconsciously held assumptions and beliefs (unseen, rarely discussed). Founders, stories, and heroes reinforce culturally consistent decisions, actions, and values throughout the firm.