Intro to Management Final Review -Hamilton Rutgers

Performance Management

The ongoing assessment and improvement of key business processes in order to drive superior results

goal is to improve faster and better than competition

focus on capabilities/ processes

Performance Management 3 Core Elements

process management, business assessment, business improvement

Measure Process Management

create outcome measures and predictive measures that allow complete understanding of process performance

Analyze Process Management

use the measures and process maps to understand the performance of the process vs. goals and benchmarks

Process Mapping

used to describe the process visually; clarifies what each step does and who does it

Process Management

use flow charts to identify customers, suppliers, and those who perform key steps in the process

DMAI^2C

Key Elements (DMAI2C):

Define - Use flow charts to identify customers, suppliers, and those who perform key steps in the process (SIPOC Model)

Measure - Create outcome measures and predictive measures that allow complete understanding of process performance

Analyze - Use the measures and process maps to understand the performance of the process vs. goals and benchmarks

Improve/Innovate - Make improvement a routine activity using basic/advanced tools & methods

Control - Make sure the process and improvements continue to provide consistent, predictable performance.

6 Key components of the Value Chain (business assessment)

1. Leadership

2. Products Development

3. Demand Generation

4. Supply Chain

5. Organization and People

6. Compliance

Business Assessment

Comprehensive evaluation of business performance and business process management against a core set of fundamental business excellence criteria

Business excellence criteria categories

1. Key Role of Leadership

2. Customer Focus

3. Process Management/ High Performance Management

4. Fact-Based Management

5. Improvement and Innovation

6. Continuous Assessment and Renewal

Key Role of Leadership

Create and communicate a clear vision and direction for the business and fully align the organization in support. Build capabilities for future success while delivering current results by effectively balancing long term and short term priorities

Customer Focus

Design, develop, and deliver products and services based on an accurate understanding of and a commitment to, creating true value for the customer that is superior to competitive options

Process Management/ High Performance Environment

Use process-based view of work that integrates multiple functions working in collaboration to create a high performance environment

Fact-Based Management and Evaluation

Use a system of balanced measures that are aligned with the business goals and strategy; include outcome and driver metrics that are both leading and lagging indicators of performance; benchmark against standards of excellences as well as competitors

Improvement and Innovation

Use proven improvement methodologies to address strategic needs and performance gaps; use highly competent improvement experts; seek to find ways to create value for customers and the organization

Continuous Assessment and Renewal

Use comprehensive criteria to routinely assess the business and validate findings through an independent review; develop clear strategies to sustain and enhance business results in the future; align plans, policies, and practices to support these strategies

Well-Dressed Measure

Graph/chart used to clearly describe and show company's strategic objectives

Business Improvement

The creation of an improvement oriented culture and management process that utilizes improvement experts and proven methodologies/tools to achieve superior levels of performance

3 Core elements of Business Improvement

Role of Leadership (senior leadership), Experts and Training, Proven Methodologies/Tools

Role of Experts

-Business improvement Leader: Expert and experienced in improvement tools but also experience in training and coaching black and green belts

- Master Black Belt: Expert and experienced in improvement tools but also experience in training and coaching black and green belts

-Black belt: demonstrated expertise in managing multiple successful improvement projects

-Green belt: only one successful project completion

Business Improvement Methodologies/Tools

PDCA

Six Sigma

Lean

Design for Six Sigma (DFSS)

Business Process Reengineering (BPR)

PDCA

Plan, Do, Check, Act

an interactive four-step management method used for the control and continuous improvement of processes and products

Six Sigma

utilize advanced statistical methods to improve quality by reducing defects and variability in the performance of business processes by using DMAIIC methodology

(3.4 million defects/million opportunities)

Lean

specify value from the customer end and eliminate process that do not help obtain that value by eliminating waste

Define Value, Map Value Stream, Create Flow, Establish Pull, Pursuit Perfection

DFSS

used to design new processes and seeks to avoid manufacturing/service process problems by using advanced Voice of Customers (VOC) techniques and proper systems engineering techniques to avoid process problems at the outset

-DMADV

(Define, Measure, Analyze, Design, Verify)

BPR

-involves radically redesigning and streamlining how an activity is performed

Business Improvement tools

-process maps: describe process

-control charts: measure if a performance is a control (allows modest variation)

-defect rate: used to determine # of deviations from a performance

-sigma level: deviations per opportunity (should perform less than 3.4/million then it is at six sigma quality)

-house of quality: links customer requirements to service design using matrix format

6 types of risk

-operational (technology, process)

-financial (profitability, funding)

-strategic (general, supply chain)

-market (macroeconomic)

-geopolitical (legal)

-catastrophic (environmental, violence)

Innovation

The act of introducing novel and useful ideas into value-creating new products, new services, or new processes

Sources of innovation

sources of creativity -> creativity -> innovation

Invention or Creativity

the generation of a novel AND useful idea

Sources of creativity

can lead to either individual or organized creativity; inventors; users

Roger's Five Factors in Innovation

1. Relative Advantage

2. Compatibility

3. Complexity

4. Trialibilaity

5. Observability

Innovation Management

innovation strategy

organizing for innovation

managing day-to-day innovation processes

NPD

New Products Development

Why is NPD important?

over 50% of sales come from new products; 95% of new products fail to achieve economic return due to poor management

Strategies for Overcoming NPD Impediments

Development Strategies

Timing Strategies

"Level of Focus" Strategies

Development Strategies for NPD

1. maximize fit with customers- offer compelling features, greater quality, etc. ; one problem firms have is customer driven vs. technology driven designs

2. minimize cycle time- reduce development cycle time

achieve first to market advantages while staying controlled and not rushed (partly parallel development ex. starting next task when finishing one)

3. control development costs- high return on investment costs optimizing speed/cost, benefit/cost, and prioritization to retain the most money through developing a new product (use stage-gate process and cycle time reduction methods)

-Partly parallel is better than sequential bc shortens overall development time and enables closer coordination between stages

Stage-Gate Process for NPD

Stage = deliverables, criteria, outputs

Gate= Go, Kill, Hold, Recycle

Timing Strategies for NPD

1. First to market- innovation culture; able to create and then dominate the market against fast followers

2. Fast follower- Firm must be very good with innovation and have strong R&D, and be good at figuring out why the first mover failed to exploit the market so they can leapfrog fast and grab the market

3. Niche- Focus on specific niche market, requires a close connection to customers on what they want as far as product differentiation

4. Reactive- Firms that are followers and have a focus on operations, have a wait and see approach and look for low risk opportunities, will copy proven innovation

"Level of Focus" Strategies NPD

(from most time to least time)

advanced R&D- new products for new users

breakthrough- iPad

platform- new generation

derivative- using what you have and reworking it

NPD organization design

-designing motivating jobs

-structure

-integrating

-rewards and monitoring

Corporate Entrepreneurship

The intention to engage in the creation of new products or processes and/or enter into new markets

-thinking structurally

Rate of Investment Capital (ROIC) in innovation

assess the ratio of the firm's total profits from new products to its total investments & expenditures for new products

Corporate Entrepreneurship Challenges

-corporate sponsored ventures perform worse than independents

-independents became profitable twice as fast

-this is due to difficulty committing, constrained environment, lack of freedom, and consequences of failure in corporate setting

Entrepreneurial Intentions

motivational factors that influence individuals to pursue entrepreneurial outcomes

Entrepreneurial self-efficacy

conviction that one can successfully pursue entrepreneurial outcomes

Entrepreneurial thinking

an individual's mental process of overcoming ignorance

Perceived Desirability

degree to which a potential entrepreneurial outcome is evaluated as favorable or unfavorable

Corporate Entrepreneurial Activities

1. New Business Venturing

2. Innovation

3. Proactive-ness

4. Self-Renewal

Process for Establishing Corporate Entrepreneurship in the Organization

(9 steps)

1. commitment/culture (secure commitment from all management levels and train)

2. plan and organize (identifies ideas and how resources will be used to tackle them)

3. technology (use of technology to ensure organizational flexibility)

4. training (identify interested managers to train employees)

5. customer focus (develop ways to get closer to customers)

6. resource management (be productive with fewer resources)

7. support structure (establish support)

8. rewards (tie rewards into performance)

9. evaluation (system where successful thrive and unsuccessful are eliminated)

"Time to Think" Model

3M encourages their employees to spend 15% of their working time on their own projects.

-Employees use 3M resources

-Employees are allowed to build teams

-Employees follow their own insights in pursuit of problem-solving with limited managerial direction

Integration Strategies

1. backward integration- a step back in the value-added chain

2. forward integration- a step down in the value added-chain

3. horizontal integration- buying a competitor

Growth Strategies

1. product development- developing and selling new products to current customers

2. diversification- selling new products to new market

3. market development- selling the firm's existing products to new groups of customers

4. penetration - encourage existing customers to buy more of firm's current products

Growth Challenges

1. Human Resources

2. Management of Employees

3. Entrepreneur's Time

4. Financial Resources

5. Opportunity Overload

6. Abundance of Capital

7. Cash Flow Management

8. Design making

9. Facilities/ space limitations

Globalization

The shift towards a more integrated and interdependent world economy

Reasons for Globalization

1. Overcome distance and communication challenges

-technological advancement

-cultural advancement

2. Evolving Political Economies

-Political Economy

3. Recognition of the Mutual Benefits

-Free-Trade Doctrine

4. Declining Barriers to Trade

-reduction of tariffs

-GATT

5. The Development of MNE's

Mousetrap Myopia

starting a firm around an idea rather than an oppurtuinty then struggling to find a market where good can be sold

What are "Wonder, Blunder, Thunder, Plunder, and Asunder"?

(stages experienced as firms grow big)

-wonder: start off with an idea (slope up)

-blunder: work hard and you will eventually succeed (also where people fail and quit)

-thunder: create success

-plunder: either teach method or destroy accomplishments

-asunder: after death of entrepreneur the company either dies off and liquidates or carries on predecessor's hard work

Political Economy

Refers to the interdependent nature of the economic, political, and legal systems within a country

Free-Trade Doctrine

the idea that if each country specializes in the production of the foods and services that it can produce most efficiently, this will make the best use global resources and will result in lower prices

MNE's

Multi-national Enterprise

any business that has productive activities in two or more countries

Globalization Process

the set of specific and general forces that work together to integrate and connect economics, political, and social systems across countries, cultures, or geographical regions so that nations become increasingly interdependent and similar

Barriers to entry

factors that make it difficult and costly for the organization to enter a particular task or industry

Barriers to entry

-economics of scale: cost advantages associated with large operations

-brand loyalty

-government regulations

The Globalization of Production

firms source goods and services from locations around the globe to capitalize on national differences in the cost and quality of factors of production like land, labor, capital, and energy

Global outsourcing

the purchase or production of inputs or final products from overseas suppliers to lower costs and improve product quality or design

Global Environment

Set of forces and conditions in the world outside the organization's boundaries that affect the way it operates and shapes its behavior

Global Environment Forces

1. Task Environment- set of forces and conditions that originate with suppliers, distributors, customers, & competitors and affect an organization's ability to obtain inputs and dispose of its outputs

2. General Environment- the wide-ranging global, economic, technological, sociocultural, demographic, political, and legal forces that affect an organization and its task environment.

Global Environment General Environment Forces

1. Sociocultural Forces: pressures emanating from the social structure of a country or society or from the national culture.

2. Political and Legal Forces: outcomes of changes in laws and regulations, such as deregulation of industries, privatization of organizations, and increased emphasis on environmental protection.

3. Economic Forces: interest rates, inflation, unemployment, economic growth, and other factors that affect the general health and well-being of a nation or the regional economy of an organization.

4. Technological Forces: outcomes of changes in the technology that managers use to design, produce, or distribute goods and services.

5. Demographic Forces: outcomes of change in, or changing attitudes toward, the characteristics of a population, such as age, gender, ethnic origin, race, sexual orientation, and social class.

Global Environment -Task Environment -Forces

1. Competitors- rivalry between competitors is potentially the most threatening force that managers deal with.

2. Suppliers- access to raw materials, component parts, and labor (employees) can be critical in foreign markets.

3. Distributors- powerful distributors can limit access to markets through its control of customers in those markets.

4. Customers- identifying an organization's main customers and producing the goods & services they want is crucial to organizational and managerial success.

Values

ideas about what society believes to be good, right, desirable, and beautiful

Norms

-unwritten, informal codes of conduct that prescribe how people should act in a particular situation and are considered important by most members of a group or organization

Hofstede's Dimensions of National Culture

• Individualism vs Collectivism

• Low/High Power Distance

• Achievement vs Nurturing Orientation

• Low/High Uncertainty Avoidance

• Short-Term/Long-Term Orientation

Hoftede's Dimensions of National Culture

Collectivism- worldview that values subordination of the individual to the goals of the group and adherence to the principle that people should be judged by their contribution to the group.

Individualism- worldview that values individual freedom and self-expression and adherence to the principle that people should be judged by their individual achievements rather than their social background.

Power Distance- degree to which societies accept the idea that inequalities in the power and well-being of their citizens are due to differences in individuals' physical and intellectual capabilities and heritage.

Nurturing- worldview that values the quality of life, warm personal friendships, and services and care for the weak.

Achievement- worldview that values assertiveness, performance, success, and competition.

Uncertainty Avoidance- degree to which societies are willing to tolerate uncertainty and risk

• high uncertainty avoidance: societies are more rigid and expect high conformity in their citizens' beliefs and norms of behavior

• low uncertainty avoidance: cultures are easygoing, value diversity, and tolerate differences in personal beliefs and actions

Long Term Orientation- worldview that values thrift and persistence in achieving goals.

Short Term Orientation- worldview that values personal stability or happiness and living for the present.

Power Distance

degree to which societies accept the idea that inequalities in the power and well-being of their citizens are due to differences in individuals' physical and intellectual capabilities and heritage.

International Business Risks

1. Political Risks- instability or weaknesses in national governments and hostility to foreign business.

2. Economic Risks- the stability of a country's monetary system, economic and regulatory policies, reliability of infrastructure, and the lack of property rights protections.

Strategies for Competing Internationally

global

transnational

multi domestic

Global Strategy

think and act global

Transnational Strategy

think global

act local

Multi domestic Strategy

think and act local

Entering International Markets

export (goods from a domestic base)

license (production/ distribution/ marketing)

franchise (to foreign entities)

acquisition (wholly- owned subsidiary and greenfield (wholly-owned start-up subsidiary-- better than acquisition)

strategic alliances/ joint ventures (with foreign firms)

Resource-Based Competitive Market

-use powerful brand names

-coordinate activities for sharing and transferring resources across countries

Dumping

selling foods in foreign markets at prices that are below normal home market prices or below the full costs per unit

NOT fair-trade

Emerging Market

is an economy with low to middle per capita income

Diversity

dissimilarities/differences among people in age, gender, race, ethnicity, religion, sexual orientation, socioeconomic background, and capabilities/ disabilities

Managing Diversity Effectively 2 Perspectives

Distributive Justice

Procedural Justice

Distributive Justice

a moral principle calling for fair distribution of pay

Procedural Justice

a moral principle calling for the use of fair procedures to determine how to distribute outcomes to members

4 Challenges in managing multicultural teams

direct vs indirect communication

accents/ fluency

differing attitudes towards hierarchy

conflicting decision-making norms

Intervention Options

1. Adaptation- working with or around differences

2. Structural Intervention- reorganizing to reduce friction

3. Managerial Intervention (rare)- making final decisions without team involvement

4. Exit

Glass Ceiling

The invisible barriers that prevents minorities and women from being promoted to top corporate positions

Title VII of the Civil Rights Act of 1964

prohibit discrimination based on race and ethnicity in employment decisions

Age Discrimination in Employment Act of 1967

prohibiting discrimination against workers over age 40 and restricts mandatory retirement

Civil Rights Act of 1991

monetary damages for discrimination

American with Disabilities Act of 1990

prohibits discrimination against people with disabilities

New Jersey Law Against Discrimination

prohibits discrimination based on sexual or affectional orientation

Sources of Discrimination

1. Perception

2. Stereotypes and Biases

3. Overt Discrimination

Census Bureau

-distinguishes between races

-categorizes ethnicity as whether a person identifies as Hispanic or not Hispanic

Socioeconomic Background

-refers to a combo of social class and income-related factors