MGMT:2100 University of Iowa Midterm 2 — Fall 2026

175 simple study cards for Midterm 2: term on the front, concise definition or required list on the back. Chapter labels and extra explanations removed. Eligible review-sheet scope retained, including Chapter 8 and the supplied Zachary definition; crossed-out topics excluded. Based on current course slides and textbook notes. Quizlet used as a style reference. Mustang Jeans summarizes the cultural lesson identified in the lecture slides.

Forces for internationalization

Modern communication technology, air travel, and corporate globalism.

Internationalization process

Steps: 1. Exporting: make at home, sell abroad. 2. Cooperative contracts: license or franchise abroad. 3. Strategic alliances: share resources and risks with partners. 4. Wholly owned affiliates: fully own a foreign business. Alternative: global new ventures operate internationally from the start.

Hofstede's six cultural dimensions

Power distance: acceptance of unequal power. Individualism/collectivism: self versus group. Masculinity/femininity: competition versus care. Uncertainty avoidance: discomfort with ambiguity. Long-/short-term orientation: future versus immediate rewards. Indulgence/restraint: freedom versus restriction of enjoyment.

Globalization

Expanding business sales, production, and ownership into other countries.

High-context culture

Meaning comes largely from context and nonverbal cues; relationships matter more than deal terms.

Low-context culture

Meaning comes mainly from explicit words; deal terms receive more emphasis than relationships.

Mongrel (Zachary)

Someone combining different cultures, backgrounds, experiences, and perspectives. This mixture promotes divergent thinking, creativity, innovation, and adaptability.

Cooperative contracts

Licensing: allow another business to use your product, service, or brand for royalties. Franchising: license the entire business system for fees and royalties. Both limit investment but reduce control.

Tariff

A direct tax on imported goods that raises their cost.

Nontariff trade barriers

Nontax restrictions that raise import costs or limit imports: quotas, voluntary export restraints, import standards, subsidies, and customs classification.

Why trade matters to managers

Free trade creates business opportunities and increases competition; managers must respond to both.

Attractive foreign business climate

Access to growing markets; an effective, cost-efficient business location; and low political risk. Consider purchasing power, competitors, workforce skills, strategy, trade barriers, and operating costs.

Political uncertainty vs. policy uncertainty

Political uncertainty: risk of major changes in government or regime. Policy uncertainty: risk of changes in laws or government policies affecting business.

Minimizing political risk

Avoidance: postpone entry or leave. Control: lobby to change harmful policies. Cooperation: work with local partners through joint ventures or contracts.

Preparing for an international assignment

Use language and cultural training, screen adaptability, and prepare the family. Training: documentary = learn cultural differences; simulations = practice adapting; field experience = interact with a local cultural community. Family adjustment is the most important success factor.

Expatriate

Someone who lives and works outside their native country.

Mustang Jeans

Lecture-slide lesson: misunderstanding high-context communication and long-term relationship-building can undermine an international business deal.

Ways to enter business

Join a family business, start a new business, buy an existing business, or buy a franchise.

Business funding

Equity: exchange ownership for investment. Debt: borrow and repay money. Competition awards: obtain funding by winning entrepreneurship competitions.

Types of ownership

Sole proprietorship: one owner, personal liability. General partnership: shared ownership and personal liability. C corporation: limited liability, possible double taxation. S corporation and LLC: limited liability and generally pass-through taxation. Main differences: taxes and debt liability.

Burn Your Business Plan

Focus on a strong oral presentation, a compelling written story, an effective website, and convincing financial projections.

Making a plan that works

Steps: 1. Set goals. 2. Build commitment. 3. Create action plans. 4. Track progress. 5. Stay flexible.

Management by objectives (MBO)

Managers and employees discuss goals, choose them together, develop tactical plans, and regularly review progress.

Rational decision-making

Steps: 1. Define the problem. 2. Identify criteria. 3. Weight criteria. 4. Generate alternatives. 5. Evaluate alternatives. 6. Choose the highest-scoring option.

Nominal Group Technique (NGT)

Members silently generate ideas, share them in turns, discuss them, then independently rank them and combine rankings.

Delphi technique

Experts answer questionnaires and review summarized feedback in repeated rounds until they reach agreement.

Effective mission statement

A brief, clear, enduring, inspiring statement of the organization's purpose that matches its values.

Proximal goals

Short-term goals or subgoals leading toward a larger goal.

Distal goals

Long-term or primary goals.

Options-based planning

Make small investments in several plans, then invest more in the most promising ones.

Slack resources

Extra time, people, money, or capacity available for unexpected needs.

Purpose statement

A statement of why an organization exists. Mission explains why; vision describes the desired future.

Strategic plans

Top management's plans for serving customers and competing over the next two to five years.

Strategic objective

A specific, challenging, time-bound goal that directs company-wide effort.

Tactical plans

Middle management's plans for implementing strategy, usually over six months to two years.

Operational plans

Day-to-day plans for producing and delivering goods or services, usually covering 30 days to six months.

Single-use plans

Plans for unique, one-time events.

Standing plans

Plans used repeatedly for recurring situations.

Policies

General guidelines for responding to situations.

Procedures

Specific steps for handling recurring situations.

Rules and regulations

Precise requirements stating what must or must not be done.

Budget

A numerical plan for allocating resources over a period.

Absolute comparison

Judge each decision criterion against a standard or on its own merits.

Relative comparison

Compare decision criteria directly with one another.

Sustainable competitive advantage

A lasting advantage competitors cannot easily copy or replace. Resources must be valuable, rare, imperfectly imitable, and nonsubstitutable.

SWOT analysis

Strengths and weaknesses are internal; opportunities and threats are external. Use all four to assess the organization's situation.

BCG matrix

Classifies businesses by market growth and relative market share: stars = high/high; question marks = high growth/low share; cash cows = low growth/high share; dogs = low/low. Cash cows fund promising stars and question marks.

Corporate grand strategies

Growth: expand the business. Stability: improve existing business with the same customers. Retrenchment: shrink the business to reverse poor performance.

Industry positioning strategies

Cost leadership: low cost, broad market. Differentiation: unique value, broad market. Cost focus: low cost, narrow market. Focused differentiation: unique value, narrow market.

Portfolio strategy

Manage a collection of businesses to allocate investment and reduce risk; unrelated diversification can increase risk.

Competitive attack

A move intended to reduce a rival's market share or profits.

Competitive response

A countermove to defend or improve market share or profits after a rival's attack.

Market commonality

How much competitors' products, services, and customers overlap across markets.

Resource similarity

How similar competitors are in the types and amounts of resources they possess.

Red ocean strategy

Compete directly with rivals in an existing market.

Blue ocean strategy

Create new market space and demand through a different value offering.

Strategy canvas

A chart comparing competitors' offerings across the factors customers value.

Control process

Set standards → measure performance → compare with standards → identify deviations → analyze causes → take corrective action.

Three types of control

Feedforward: prevent problems before work begins. Concurrent: correct problems during work. Feedback: use results to correct problems after work.

Objective control

Use observable measures to assess performance. Behavior control measures actions; output control measures results.

Types of budgets

Sales budget: expected revenue. Operating budget: expected expenses. Budgets compare planned and actual financial activity.

Variance analysis

Compare actual results with the budget and investigate differences. Higher revenue or lower expenses are generally favorable; lower revenue or higher expenses are unfavorable.

Service characteristics

Customers participate; services are consumed immediately, provided where and when needed, labor-intensive, and intangible.

RATER

Reliability: dependable, accurate service. Assurance: trust and confidence. Tangibles: physical appearance. Empathy: individual attention. Responsiveness: prompt help. Reliability is most important.

PERT and critical path

PERT maps project tasks and dependencies. The critical path is the longest sequence and determines minimum project time. Expected task time = (optimistic + 4 × most likely + pessimistic) ÷ 6.

Balanced scorecard

Four performance perspectives: financial, customer, internal processes, and innovation/learning. Balances financial results with other measures of success.

Economic Value Added (EVA)

Profit remaining after paying the cost of capital. EVA = NOPAT − (invested capital × cost-of-capital rate). NOPAT = operating profit after taxes. Positive EVA creates value; negative EVA destroys value.

Purpose of control

Make sure activities produce the desired results.

Bureaucratic control

Use rules, policies, procedures, rewards, and penalties to guide behavior.

Normative control

Shared organizational values and beliefs guide behavior.

Concertive control

Work-group values and rules guide members' behavior.

Self-control

People set goals, monitor their own behavior, and reward their progress within organizational boundaries.

Income statement

A report of revenue, expenses, and net income over a period.

Balance sheet

A report of assets, liabilities, and owners' equity at a specific time.

Performance report

A comparison of actual performance with planned or budgeted performance.

Gantt chart

A bar chart showing project tasks, timing, and progress.

Experiential innovation

Use experimentation in uncertain environments to develop something new. Five elements: design iterations, testing, milestones, multifunctional teams, and powerful leaders.

Compression innovation

Speed up predictable development to improve an existing product. Five elements: planning, supplier involvement, shorter steps, overlapping steps, and multifunctional teams.

Creative work environment

Challenging work; organizational, supervisory, and work-group encouragement; freedom; and few organizational barriers. Expertise and positive moods also help.

Resistance to change

People resist because of self-interest, misunderstanding or distrust, and low tolerance for change.

Lewin's change model

Unfreeze: establish the need to change. Change: adopt new behaviors. Refreeze: reinforce the new behaviors so they last.

Responding to employee resistance

Explain reasons, empathize, communicate, champion the change, invite feedback, offer security, educate, and allow time.

Errors in leading change

Too little urgency; weak coalition; no clear vision; too little communication; obstacles left in place; no short-term wins; declaring victory early; failing to anchor change in culture.

Organizational development interventions

Planned changes to improve organizational health. Large-system: sociotechnical systems and survey feedback. Small-group: team building and unit goals. Person-focused: coaching, counseling, and training.

Technology cycle

The period from a technology's introduction until a substantially better technology replaces it.

S-curve

Technology improves slowly at first, rapidly next, then slowly again as it reaches its limits.

Technological discontinuity

A breakthrough or new combination of technologies that greatly improves performance.

Change forces

Pressures pushing an organization toward change.

Resistance forces

Pressures supporting the status quo.

Functional departmentalization

Group by business function. Benefits: specialization, lower duplication, good within-function coordination. Drawbacks: weak cross-function coordination, narrow experience, and slower decisions.

Product departmentalization

Group by product or service. Benefits: product expertise, clear performance accountability, faster decisions. Drawbacks: duplicated functions, higher costs, and difficult cross-product coordination.

Customer departmentalization

Group by customer type. Benefit: stronger attention to each group's needs. Drawbacks: duplicated resources and difficult coordination across groups.

Geographic departmentalization

Group by location. Benefits: local responsiveness and proximity to customers. Drawbacks: duplication and difficult coordination across regions.

Matrix departmentalization

Combine two or more structures; employees often have two bosses. Benefits: shared expertise and resources. Drawbacks: conflicting authority, priorities, and coordination demands.

Span of control

The number of direct reports per manager. Narrow spans create tall structures and closer supervision; wide spans create flat structures, more autonomy, and heavier manager workloads.

Line vs. staff authority

Line authority: command direct subordinates. Staff authority: advise outside the chain of command. Line functions directly create or sell products; staff functions support them.

Delegation

Assign a task to a subordinate by transferring responsibility, authority, and accountability for results. Match authority and resources to the task and avoid micromanaging.

Centralization vs. decentralization

Centralization puts decisions at the top; decentralization moves them to lower levels. Centralize for standardization; decentralize for local judgment and responsiveness.

Departmentalization

Grouping related work and workers into organizational units.

Contingency design

Choose organizational structure to fit the situation; no single design works best everywhere.