UIowa management Exam 2

Forces for Internationalization

Globalization - tendency of firms to expand sales, manufacturing, and ownership to new markets in other countries

-modern communication technology

-air travel

-corporate globalism

Pros and Cons of gobalization

Pros:

-productivity grows

-living standards increase

-inflation is less likely (cheap)

-innovation (new ideas)

-access to new markets and new customers

-export jobs pay more

Cons:

-Americans lose jobs

-fear losing jobs

-competition for american companies

-pay cut

-service and white collar job in danger

Internationalization Process - 5 big options

Stage 1: Exporting - selling domestically produced products to customers in foreign countries

Stage 2: Cooperative contracts - an agreement in which a foreign business owner pays a company a fee for the right to conduct that business in his or her country

Stage 3: Strategic alliances - an agreement in which companies combine key resources, costs, risks, technology, and people

Stage 4: Wholly owned affiliates - foreign offices, facilities, and manufacturing plants that are 100% owned by the parent company

New Global Ventures - new companies that are founded with an active global strategy and have sales, employees, and financing in different countries

2 types of cooperative contracts

Licensing - an agreement in which a domestic company, the licencor, receives royalty payments for allowing another company, the licensee to produce the licencor's product, sell its service, or use its brand name in a specified foreign market

Franchising - a collection of networked firms in which the manufacturer or marketer of a product or service, the franchiser, licenses the entire business to another person or organization, the franchisee

Problem at Mustang Jeans

deals with international business, does business the "american way", which turns off foreign business leaders

-the cultural imperative

-culture barriers and norms prevented american man and Japanese man from doing business together

High context cultures

Cultures in which nonverbal and situational messages convey meaning

-relationship more important than terms

Low context cultures

Cultures in which words convey primary meaning

-nonverbal messages are secondary

-the terms of the deal are more important than building a business relationship

Hofstede's dimensions

-long-term vs. short-term orientation

-uncertainty avoidance

-masculinity vs. femininity

-individualism vs. collectivism

-power distance

long-term vs. short-term orientation

addresses whether cultures are oriented to the present and seek immediate gratification or to the future and defer gratification

uncertainty avoidance

the degree to which people in a country are uncomfortable with unstructured, ambiguous, unpredictable situations

masculinity vs. femininity

the difference between highly assertive and highly nurturing cultures

individualism vs. collectivism

the degree to which societies believe that individuals should be self-sufficient

power distance

the extent to which people in a country accept that power is unequally distributed in organizations and society

indulgence vs. restraint

addresses the degree to which a society allows relatively free gratification of basic drives related to enjoying life and having fun vs. struct social norms that regulate and suppress gratification of needs and wants

Tariff

a direct tax on imported goods; increase cost of imported goods relative to that of domestic goods

Non-tariff trade barriers

non tax methods of increasing the cost or reducing volume of imported goods; 5 types:

1. quotas - a limit on the number or volume of imported products

2. voluntary export restraints - imposed limits on number or volume of products exported to a particular country; exporting country imposes

3. government import standard - a standard ostensibly established to protect the health and safety of citizens but in reality is often used to restraint imports

4. subsidies - government loans, grants and tax deferments given to domestic companies to protect them from foreign competition

5. customs classification - assigned to imported products by government officials that affects the size of the tariff and the imposition of import quotas

why do managers need to know about tariffs and trade?

free trade agreements create new business opportunities, they also intensify competition and addressing that competition is the managers job

Characteristics of attractive

""me bitch"- nikole george"- anna clough

Characteristics of attractive foreign business climate

access to a growing market; 2 factors:

-purchasing power (high is favorable) - relative cost of a standard set of goods and services in different countries

-foreign competitors (determined by the number and quality of companies that already compete in foreign market)

preparing for an international assignment

language and cross-cultural training; 3 methods:

1. documentary training - focuses on identifying specific critical differences between cultures

2. cultural simulations - practice adapting to cultural differences

3. field experiences - places trainees in ethnic neighborhood for 3-4 hours to talk to residents about cultural differences

what is a mongrel and why is it a good thing (zachary article)

a person confident in multiple cultures

effective missions

Briefly define the organization's purpose for stakeholders in a way that is enduring, inspirational, clear, and consistent with company values

getting into business

•Family-owned

•Starting new

•Buy existing

•Buy franchise

getting funding

•Equity - investors give funds in exchange for shares

•Debt - go to bank and take out loan - repay with interest

•Awards from competitions

types of ownership (and their differences)

•Proprietorship/Partnership

•Corporation

•Subchapter S-Corporation

•Limited Liability Company (LLC)

Main Differences: how/when earnings are taxed; liability for debts

key ideas behind "burn your business plan"

-Great oral presentation

-Compelling written story

-Effective web site

-Hard-hitting financial projections

how to make a plan that works

1. set goals

2. develop commitment

3. develop an effective plan

4. track progress toward goal achievement

5. maintain flexibility

Strategic plans

overall company plans that clarify how the company will serve customers and position itself against competitors over the next 2-5 years

-purpose statement - statement of company's purpose or reason for existing

-strategic objective - a more specific goal that unifies company-wide efforts, stretches and challenges the organization, and possesses a finish line and time frame

Tactical plans

plans created and implemented by middle managers that directs behavior, efforts and attention over the next six months to 2 years

-management by objectives - 4 step process in which managers and employees discuss and select goals, develop tactical plans and meet regularly to review progress toward goal accomplishment

Organizational plans

day-to-day plans, developed and implemented by lower-level managers, for producing or delivering the organization's products and services over a 30 day to 6 month period

Single use plans

plans that cover unique, one-time-only events

Standing plans

plans used repeatedly to handle frequently recurring events

policies and procedures

policies - standing plans that indicate the general course of action that should be taken in response to a particular event or situation

procedures - standing plans that indicate the specific steps that should be taken in response to a particular event

Rules and regulations

standing plans that describe how a particular action should be performed or what must happen or not happen in response to a particular event

steps in rational decision making

systematic process of defining problems, evaluating alternatives & choosing optimal solutions

1. define the problem

2. identify decision criteria

3. weigh the criteria

4. generate alternative courses of action

5. evaluate each alternative

6. compute the optimal decision

nominal group technique

a decision making method that begins and ends by having group members quietly write down and evaluate ideas to be shared with the group

delphi techniques

a decision making method in which members of a panel of experts respond to questions and to each other until reaching agreement on an issue

creating a sustainable competitive advantage

what you do must be

-valuable

-rare

-imperfectly imitated

-non substitutable

SWOT analysis

situational analysis: strengths, weaknesses, (internal), opportunities, threats (external)

-an assessment of the strengths & weaknesses in an organization's internal environment & the opportunities and threats in its external environment

corporate strategies

the overall organizational strategy that addresses the question "what business or businesses ar wein or should we be in?" - 2 approaches

1. portfolio strategy

2. grand strategy

Portfolio strategy

a corporate level strategy that minimizes risk by diversifying investment among various businesses or product lines (diversifying)

BCG matrix

a portfolio strategy developed by the Boston Consulting Group that categorizes a corporation's business by growth rate & relative market share & helps managers decide how to invest corporate funds

grand strategy

a broad corporate level strategic plan used to achieve strategic goals and guide the strategic alternatives that managers of individual businesses or subunits may use; 3 kinds:

-growth - focuses on increasing profits, revenues, market share, or the number of places in which he company does business

-Stability - focuses on improving the way in which the company sells the same products or services to the same customers

-retrenchment - focuses on turning around very poor company performance by shrinking the size or scope of the business

Industry strategies

-cost leadership - lower cost, broad target

-cost focus - lower cost, narrow target

-differentiation - differentiation, broad target

-focused differentiation - differentiation, narrow target

firm-level strategies (attack/response and blue ocean)

-strategic moves in direct competition, goal is to attack (a competitive move designed to reduce a rival's market share or profits)

-entrepreneurship, find a place where nobody is competing, niche market

-starting your business in afield without competition

value curves

-brainstorm factors of competition

-identify competitors

control process

Set standards --> Measure performance --> compare with standards --> identify deviations --> analyze deviations --> take corrective action

characteristics of service provision

1.Customers participate

2.Services are consumed immediately

3.Services are provided where and when the customer desires

4.Services tend to be labor intensive

5.Services are intangible

quality in service provision (RATER)

1.Reliability (most important)

2.Assurance

3.Tangibles

4.Empathy

5.Responsiveness

PERT

-if prior data is available then use it

-for new tasks, use expert judgement and this formula

Te = (To + 4Tm + Tp)/ (6)

Te= estimated time

To= optimistic time

Tm= most likely time

Tp= pestimistic time

Gnatt chart

balanced scorecard (4 main)

measurement of organizational performance in 4 equally important areas: finances, customers, internal operations, & innovation and learning

-focuses managers at each level of the company to set specific goals & measure performance in each of the 4 areas

-minimizes sub optimization

economic value added

the amount by which company profits (rev - exp) exceed the cost of capital in a given year

-forces managers to set specific goals & measure performance

-reduces sub optimization

3 types of control

Feedforward Control

-monitoring inputs

-anticipating and preventing problems

-inputs

Concurrent Control

-monitoring processes

-adjusting ongoing activities

-productive processes and activities

Feedback Control

-monitoring products

-learning from past mistakes

-outputs

methods of control

1. bureaucratic control

2. objective control

3. normative control

4. concertive control

5. self-control (self management)

bureaucratic control

the use of hierarchical authority to influence employee behavior by rewarding or punishing employees for compliance or noncompliance w/ organizational policies, rules & procedures

objective control

the use of observable measures of worker behavior or outputs to assess performance & influence behavior

-behavior control - the regulation of the behaviors and actions that workers perform on the job

-output control - the regulation of workers results or outputs through rewards and incentives

normative control

the regulation of workers' behavior & decisions through widely shared organizational values and beliefs

-very careful about who to hire

-learn what they should do and not do by observing experienced employees & listening to their stories (driven by organizational culture)

concertive control

the regulation of workers' behavior & decisions through work group values & beliefs

-shaped & negotiated by work groups

-groups are autonomous

self-control (self-management)

a control system in which managers & workers control their own behavior by setting their own goals, monitoring their own progress & rewarding themselves for goal achievement

budgets

quantitative planning through which managers decide how to allocate available money to best accomplish company goals

variance analysis

the comparison of planned project results with actual project results.

technology cycles

a cycle that begins with the birth of a new technology & ends when that technology reaches its limits & is replaced by a newer, substantially better technology

experiential approach to innovation

an approach to innovation that assumes a highly uncertain environment & uses intuition, flexible options & hands-on experience to reduce uncertainty & accelerate learning & understanding

-goal: new product/service

-can be planned through deliberate creation of creative work environments, & testing

-5 aspects: design iterations, product prototype, testing, milestones, multifunctional teams

compression approach to innovation

an approach to innovation that assumes that incremental innovation can be planned using a series of steps & that compressing those steps can speed innovation

-certain environments

-series of steps

-Goal: faster & cheaper

-managed primarily through tradional planning & control processes

-based on idea of gernerational change

-5 aspects: planning, supplier involvement, shortening the time of individual steps, overlapping steps, multifunctional teams

creative work environment components

workplace cultures in which workers perceive that new ideas are welcomed, valued and encouraged; 6 components:

1. challenging work

2. organizational encouragemetn

3. freedom

4. lack of organizational impediments

5. expertise and positive moods

resistance to change

opposition to change resulting from self-interest, misunderstanding & distrust & a general intolerance for change

Lewin's change model

unfreeze--> (driving forces overpower restraining forces) --> change --> (new restraining forces created to establish new status quo) --> freeze

unfreeze--> (share reasons, empathize, communicate) --> change --> (explain, champion, opp for feedback, offer security, educate, dont rush) --> freeze

errors managers make (what not to do when leading change)

-not establishing a great enough urgency

-not creating a powerful enough coalition

-lacking a vision

-undercommunicating the vision by a factor of 10 (managers just old 1 meeting about it)

-not removing obstacles to the new vision

-not systematically planning for & creating short term wins

-declaring victory too soon

-not anchoring changes in the corporations culture

3 Organization development interventions (and examples)

a philosophy & collection of planned change interventions designed to improve an organization's long term health & performance ; 3 types:

-large system interventions - to change the character and performance of an organization, business unit or department

-small group interventions - focuses on assessing how a group functions and helping it work more effectively to accomplish its goals

-person focused intervention - intended to increase interpersonal effectiveness by helping people become aware of their attitudes and behaviors and to acquire new skills and knowledge

basic departmentalization structures

subdividing work & workers into separate organizational units responsible for completing particular tasks

1. functional departmentalization

2. product departmentalization

3. customer departmentalization

4. geographic departmentalization

5. mixed departmentalization

functional departmentalization

organizing work & workers into separate units responsible for particular business functions or areas of expertise (accounting, sales, marketing, HR)

-Advantages: work is done by highly qualified specialists, lowers cost by reducing duplication, good communication & coordination

-Disadvantages: cross department coordination can be hard, slow decision making

product departmentalization

organizing work & workers into separate units responsible for producing particular products or services

-Advantages: allows manager & workers to specialize in 1 area, easier access to work-unit performance, faster decision making

-Disadvantages: duplication, challenge of coordinating across the different product departments

customer departmentalization

organizing work & workers into separate units responsible for particular kinds of customers

-Advantages: focuses the organization on customer needs rather than on products or business functions

-Disadvantages: leads to duplication of resources, lead workers to make decisions that please customers but hurt the businesses

geographic departmentalization

organizing work & workers into separate units responsible for doing business in particular geographic areas

-Advantage: helps companies respond to demands of different markets, reduce cost by locating unique organizational resources closer to customers

-Disadvantage: can lead to duplication of resources, difficult to coordinate departments b/c they are so far from each other, redundancy

mixed departmentalization

a hybrid organizaional structure in which 2 or more forms of departmentalization (most often product & functional) are used together

-Advantages: allows companies to manage in an efficient manner, large complex tasks such as R&D & marketing or carrying out complex global businesses

-Disadvantage: high level of coordination needed, confusion & conflict, disagreements, misunderstandings

span of control

the number of people who report to a manager

-narrow: create tall organizations, only managing a few people, oversight is high, low autonomy and freedom, low workload for manager

-wide spans of control: create flat organizations, managing many people, very responsive to company needs and trends, cut out layers of managements, high autonomy and freedom, high workload for manager

logic of contingency design

-there is no single best design for all companies & situations

-mechanistic vs organic

-burns & stalker: must determine the degree of environmental uncertainty & adapt the organization & its subunits to that situation

mechanistic organization

an organization characterized by specialized jobs and responsibilities; precisely defined, unchanging roles; & a rigid chain of command based on centralized authority & vertical communication

-very clear chain of command

-vertical communication

-centralized authority

-low delegation

-high specialization

organic organization

an organization characterized by broadly defined jobs & responsibilities; loosely defined, frequently changing roles; decentralized authority & horizontal communication based on task knowledge

-think broadly about who you report to

-lateral communication

-decentralized authority

-high delegation

-high generalization

chain of command

the vertical line of authority that clarifies who reports to whom throughout the organization

line/staff authority

line - the right to command immediate subordinates in the chain of command

staff - the right to advise, but not command, others who are not subordinates in the change of command

delegation, how to do well (3 transfers)

the assignment of direct authority & responsibility to a subordinate to complete tasks for which the manager is normally responsible

-3 transfers

1. manager transfers full responsibility for the assignment to the subordinate

2. manager gives subordinate full authority over the budget, resources, & personnel needed to do the job

3. transfer of accountability, delegate their managerial authority & responsibility to subordinates in exchange for results

decentralization

the location of a significant amount of authority in the lower levels of the organization

centralization

the location of most authority at the upper levels of the organization

Correlation between missed classes and final points

Negative (r=-.41)

management

Getting work done through others

How do I get help

1. Do Your Homework= Search For Your Answer First

2. Think Strategically about Who to Ask

3. Prepare a Good Question

4. Be Patient, Kind, and Professional

"Life Lessons"

1. The most effective and most respected people show initiative and look for answers before relying on other people

2. Sometimes the person sitting next to you is the best source of information

3. Even if your boss really likes you, do not bother him or her with questions that you should be able to answer yourself

4. Do your homework, and let people know you've done your homework, otherwise they just might ask you, "Did you do your homework"?

5. Make other people feel that their work is important, even if you are not sure whether it is

6. Gratitude gains you a great deal of good will from others; adopting an attitude of entitlement and being a jerk irritates others and may mean you don't get the answers you need

7. Sometimes a short face-to-face meeting is the best way to get questions answered, and to get to know someone

8. Your time is valuable. So is theirs. People who schedule ahead of time will get attention. People who don't may be ignored

9. Asking the right person, the right way, is the best way to get the right answer and gain respect in the process

Types of managers

-top managers

-middle management

-first line management

-non-supervisory employees

Models

Useful simplification of reality

Four Functions

Planning

Organizing

Leading

Controlling

Managerial Skills

-Conceptual: more important as you go up management

-Human: needed (50%) for all levels of management

-Technical: less important as you go up management

Gaining management skills

-Sources of learning: reading, reflection, relationships, real experience

-Skills gained though: combining multiple sources, self management

Team leader role and responsibilities

Responsible for facilitating team activities toward goal accomplishment

Motivation to manage

An assessment of how enthusiastic employees are about managing the work of others

Top 3 mistakes managers make

1. insensitive

2. cold, aloof, arrogant

3. betrays trust

Transition to management

-Initial expectations: be the boss, formal authority, manage tasks, job is not managing people

-After 6 months: wrong initial expectations, fast pace, heavy workload, job is to problem solve

-After 1 year: communication, listening, positive reinforcement, learning to adapt, people development

Each stage of self-management process, including tips & mistakes

1. self-assessment and planning

2. goal setting

3. self and environmental control

4. evaluating and rewarding progress

1. self-assessment and planning

Tips:

- who am I now and who do I want to be?

-what are my strengths and what do I want them to be?

-what am I doing now and what do I want to be doing?

-where am I now and where do I want to go?

Common mistakes:

-no standards

-ignoring important parts of our identities