Business MGMT Exam 1 - Smartt

BCG matrix

Boston Consulting Group

Evaluates businesses relative to the growth rate of their markets and their individual market shares

Classifies the types of business of a diversified organization's portfolio

Dogs - having small market shares and no growth prospects Cash

Cows - having large shares of mature markets

Question marks - have only a small market share in quickly growing markets

Stars - having large shares of rapidly growing markets

Strategic Choices BCG Matrix

Dogs - Retrenchment (down size products/people) Divesture, liquidation

Cash Cows - Product development, diversification, divesture, retrenchment

Question Marks - Market penetration, market development, product development, divesture

Stars- Vertical integration, horizontal integration, market penetration, market development, product development

Business level strategies

The strategic alternatives from which an organization chooses as it conducts business in an industry or a particular market.

Controls for International Business

Tariff
Quota
Export restraint agreement (voluntary limit)

Corporate level strategies

The strategic alternatives from which organization chooses as it manages its operations simultaneously across several industries and several markets.

Diversification

The number of different businesses that an organization is engaged in and the extent to which these businesses are related to one another

Related Diversification

multiple products or businesses that correlate and can be mutually beneficial

Unrelated Diversification

Multiple products or businesses that have to relation or synergy

ex Quaker oats selling oats and clothes

Distinctive Competence

something an organization does exceptionally well

Ex - making superior quality goods

Key Components of Strategy

Distinctive Competence
Scope
Resource Deployment

Resource Deployment

how an organization will distribute its resources in areas in which it competes.

Scope

range of markets in which an organization will compete

Effective strategy

Promote a superior alignment between the organization and its environment and the achievement of its goals.

Internal environment

conditions and forces within an organization

External Environment

General and Task environment

What does the Economic dimension tell us?
Economic dimension is the health of the economic system in which the organization operates
Some key indictions for managers: Unemployment rate GDP Inflation
Unemployment - when it's high \= economic recession, easy to find workers
- when it's low \= economic prosperity, hard to find workers

General Environment

is a set of broad dimensions and forces in an organization's surroundings that determine its overall context

Economic Dimension
Technological Dimension
Sociocultural Dimension
Political-Legal Dimension
International Dimension

Task Environment

is composed of specific groups and organizations that affect the firm

Competition
Customers
Suppliers
Regulators (agencies and interest groups)
Strategic Partners (allies)

Ethical standards of behavior

typically conforms to generally accepted moral, social norms.

Globalization

the worldwide movement towards economic, financial, trade, and communication integration

Actions or processes that involve the entire world and result in making something worldwide in scope.

the increase in the flow of goods, services, capital, people, and ideas across international boundaries

Purposes of Goals

Guidance and unified directions
Promotion of good planing
Source of motivation
Evaluation and control

Organizational Goals by Level

Mission statement
Strategic goals
Tactical goals
Operational goals

Organizational Goals by Area

Operations
Marketing
Finance
Production

Organizational Goals by Time Frame

Long-term goals (strategic)
Intermediate goals (tactical)
Short-term goals (operational) Explicit goals Open-ended goals

Growth of international business (globalization)

advantages and levels

International business advantages

market access
demand
profitability
competitive advantage
risk mitigation
global competition

Levels of international business

Exporting
Importing
Licensing
Strategic Alliance & Joint Ventures
Direct Investment

Kinds and levels of managers

Top Managers
- executives, manage overall goals

Middle Managers
- Largest group, implement top managers goals, supervise low lvl managers

First-Line Managers
- supervise and coordinate the activities of operations employees

Levels of international business activity

Exporting
Importing
Licensing
Strategic Alliance & Joint Ventures
Direct Investment

Management activities

Planning/Decision Making
Organizing
Leading
Controlling

Efficency & Effectiveness

Management functional areas

planning and decision making (setting & achieving goals)

organizing (how to group activities & resources)

leading (motivating others)

controlling (monitoring & correcting activities)

Management perspectives Classical

consists of two distinct branches
- scientific management
- administrative management

growth of large businesses created interest on how best to operate them

Classical - scientific management

Frederick Taylor, Gilbreth

concerned with improving the performance of individual workers

Classical - Administrative management

Focuses on managing the total organization

Fayol, Urwick, Weber

Planning, organizing, leading, controlling

Management Perspectives Behavioral

Emphasizes individual attitudes, behaviors, and group processes

Focus on individuals as people and not treat them as tools or machines

Hawthorne Studies

Human relations Movement - argues that workers respond primarily to the social context of the workplace

theory x and y

Hawthorne Studies

aimed to see how workplace conditions such as lighting and an incentive pay scale influenced productivity

special attention attributes to better work (behavioral)

HR Movement

Proposed that workers respond primarily to the social context of work, including social conditioning, group norms, and interpersonal dynamics.

Assumed that the manager's concern for workers would lead to increased worker satisfaction and improved worker performance

Theory X

"A pessimistic and negative view of workers, consistent with the views of scientific management"

Theory Y

"A positive view of workers it represents the assumptions that human relations advocates make"

Organizational Behavior

Focuses on behavioral perspectives.

Draws on psychology, sociology, and anthropology, economics, and medicine

Management Perspectives Quantitative

emerged from WWII, used math to solve management problems

management science

Operations Management

practical application of management science to efficiently manage the production and distribution of products and services

concerned with equality

Management science perspective

focuses on mathematical systems and equations(quantitative)

Management Perspectives Contemporary

saw value in theories and attempts to integrate these to solve problems

systems perspective

Systems Perspective

focuses on an interrelated set of elements functioning as a whole (family)

- inputs -\> transformation process -\> outputs -\> feedback

if a business does not interact with it's environment (take in imports and exports) it will use it's own resources and effectively die

(Contemporary)

Management skills

technical
interpersonal
conceptual
diagnostic
communication
decision making
time management

Management theories (within each of the management perspectives) understand what the main idea is.

C
Scientific Management
Admin Management

B
Hawthorne Studies
HR Movement
McGregor- Theory X & Y
Organizational Behavior

Q
Management Science
Operations Management

Cont
Systems Perspective

Operational planning

made up of
-single-use plans
-standing plans
-contingency planning and crisis management

Single Use Plans

made up of:
programs-for a large set of activities
projects-less scope and complexity

- developed to carry out a course of action that is not likely to be repeated in the future

Standing Plans

Policies, standard operating procedures, and rules n regulations

Contingency Planning and Crisis Management

contingency planning- the determination of alternative courses of action if an intended course of action is not enough or not working

crisis management- set of procedures the organization uses in the event of a disaster or other unexpected calamity

Organization's culture

behavioral processes vary widely across cultural and national boundaries.

Product life cycle

Introduction - New hires, inventory, product out, lower sales, developing inventory

Growth - Quality, differentiate, new entrants

Maturity - Slow growth, costs, R&D, New product

Decline - Demand slows, sales drop, differentiate, replacement, low costs

Social responsibility.

Is a firms leadership's intention, beyond their legal and economic obligations, to do right things and act in ways that are good for society.

Strategic planning process

A process that helps an organization allocate its resources under different conditions to accomplish its objectives, deliver value, and be competitive in a market-driven economy

SWOT analysis

\
Strengths Weaknesses Opportunities Threats

intends to formulate strategies that support the mission

Business Level Strategies

differentiation - different/unique

cost leadership - cheapest or leads the cost in the market

focus- targets a buyer

Corporate Level Strategies

Single Product Strategy
- Only one Product is made (WD40)

Related Diversification
- Multiple products or business that correlate and can be mutually beneficial

Unrelated Diversification
- Multiple products or business that have no related or synergy

Matching questions will cover:
- Management Theories within each of the Perspectives we explored in Chapter 1.
- The General and Task environments
- Business and corporate level strategies