Business Management: Chapter 9 Key Terms and Definitions

A nonprofit literacy organization holds a fundraiser to provide resources for 1,000 children per year. What are those who donate to this organization to support the literacy in their community called?

stakeholders

3 multiple choice options

A firm has the following sentence posted on its website: "This company exists to serve those who do not currently have a voice in the community to ensure that they can be part of the ongoing dialogue about social justice." What is this an example of?

mission statement

3 multiple choice options

A rental car firm wants to be considered the best value in the metro Los Angeles area. It has a plan to offer a loyalty program to its customers who have rented at least once in the last six months. What type of plan does this represent?

operational

3 multiple choice options

A U.S. firm started two years ago and has grown its market share as a result of its intense focus on improving the quality of its existing client work. The firm has been challenged by new competitors from abroad, but no new firms have been able to make inroads into the firm's client base because of its ongoing service initiatives at home. What Miles and Snow category does the firm fall into?

defenders

3 multiple choice options

A firm has embarked on a process of understanding how it should develop its overall goals with respect to stakeholders. What process is the firm participating in?

strategy formulation

3 multiple choice options

A firm wants to establish itself as a market leader within two to three years by becoming known as an innovator in the consumer products industry. What type of plan does this represent?

tactical

3 multiple choice options

A U.S. firm has formulated its strategy in consideration of global business and social change, shareholders, consumers and customers, and other factors. What is the next decision the firm will need to make?

what typology the firm will adopt

3 multiple choice options

The CEO of a firm recently learned that there is no consistent system that captures knowledge about various aspects of the business. Employees have been passing along information without formally codifying that data into training materials because the context is critically important to instructions and is frequently difficult to describe. What type of information has the firm been relying on?

tacit

3 multiple choice options

A firm's marketing team is engaged in recognizing market indicators that can signal profitable opportunities. Once the team identifies these indicators, they report back to employees about these insights and collaborate on how the information can be applied to develop new products. What does this example represent?

absorptive capacity

3 multiple choice options

A nonprofit organization has strict policies about fundraising and how the money is recorded and used for projects. These policies are part of a larger system of rules and regulations promoted by an international fundraising association. Which type of controls does this organization use?

bureaucratic

3 multiple choice options

A U.S. manufacturer recently adopted a new quality system to compete with a new market entrant from Asia. The manufacturer's quality system requires that it consistently limit defects to 3.4 per million. What type of output control is the firm using?

six sigma

3 multiple choice options

A U.S. firm has recently expanded into a foreign market. To promote the firm's culture in the new market, executives are mentoring subordinates to prepare them to establish the subsidiary. What type of control are the executives using?

interpersonal

3 multiple choice options

A firm's CEO provides quarterly investor updates on profits. What type of control is the CEO reporting on?

output

3 multiple choice options

A firm has operated for over 100 years. During that time, the values of the founding family have guided all aspects of the business, including the importance placed on employees being members of the family. What does this describe?

culture

3 multiple choice options

A start-up firm is experiencing intense competition from new market entrants. To maintain its market share, the firm will need to change the way its designs and delivers its products to customers. Who should initiate this change to effectively redirect the firm's strategy?

top management

3 multiple choice options

A firm's strategy formulation is based on the principle that its purpose is to maximize financial returns for its owners. All decisions are made to increase profits and overall financial value. Which model of strategy formulation does this firm use?

shareholder

3 multiple choice options

An energy firm has achieved the highest market share in three of its five markets in Europe, Asia, and Africa. To do this, the firm has focused on continued exploration of natural energy sources and uses for postconsumer use plastics. What type of strategy implementation does this firm represent?

prospectors

3 multiple choice options

A firm's business model is defined by its ability to make consumer products and sell them to distributors. Each step of the business, from manufacturing to delivery, has been identified in training manuals and is available electronically, accessible by any mobile device. What is this an example of?

explicit knowledge

3 multiple choice options

A family-owned business has three separate divisions, managed by three individuals from the family. All other employees are non-family hires. The three divisions operate individually, without the use of a standardized method of measuring output. What is the business in need of?

an effective organizational control system

3 multiple choice options

In the banking industry, an efficiency ratio (i.e., how little expense or overhead is needed to produce a given amount of income) is a closely monitored metric. What type of output control does this refer to?

d. productivity

3 multiple choice options

Most global businesses have a concept of their general purpose that they express in a mission statement Berkshire Hathaway Inc. famously does not have a published mission statement. Which of the following are we unable to determine about Berkshire Hathaway because of this exception?

Why the company exists and what it strives to accomplish

3 multiple choice options

According to Raymond E. Miles and Charles C. Snow in their book Organizational Strategy, Structure and Process, businesses engage in strategy implementation on a longer-term basis in one of four ways. Historically, Berkshire Hathaway's business model has been one of buying insurance companies such as Geico. But recently, Berkshire Hathaway has been moving away from buying insurance companies with great "floats" and instead buying major industrial-type businesses. Based on this, how would Miles and Snow characterize the firm of Berkshire Hathaway?

Prospector

Coordinating strategy formulation and implementation may sound relatively easy in theory, but in practice it is usually not very easy at all. In the real world, impediments to coordination of strategic implementation abound, even for successful firms such as Berkshire Hathaway. One area where coordination challenges can exist is that of knowledge management. Which concept describes the ability of an organization such as Berkshire Hathaway to recognize, assimilate, and apply new knowledge?

Absorptive capacity

3 multiple choice options

Berkshire Hathaway Inc. has historically revolved around one man and his investing prowess: Warren Buffett, the "Oracle of Omaha." Which concept best describes this "personality cult"?

Organizational culture

3 multiple choice options

Which model of strategy formulation believes businesses exist to benefit not just their shareholders but also the various groups that have a meaningful stake in their operations?

stakeholder

3 multiple choice options

Global businesses typically define their overall goals in what item?

mission statement

3 multiple choice options

Very short-term plans formulated for implementing strategic goals are defined as what type of plans?

operational

3 multiple choice options

Organizations that implement basic market strategies of concentrating upon existing operations and maintaining their home turf are called by what name?

defenders

3 multiple choice options

Miles and Snow developed a typology describing how global (and other) businesses engage in what practice on a longer-term basis?

strategy implementation

3 multiple choice options

One- to three-year plans formulated for implementing strategic goals are defined as what type of plans?

tactical

3 multiple choice options

All of the following are included in a typology of firms described by Miles and Snow except for which example?

coordinators

3 multiple choice options

Knowledge that is informal in nature and difficult to communicate is referred to as what type of knowledge?

tacit

3 multiple choice options

What is the term for the ability of organizations to recognize, assimilate, and apply new knowledge?

absorptive capacity

3 multiple choice options

Systems of rules and regulations promoted within a global business are defined as what type of controls?

bureaucratic

3 multiple choice options

Six sigma initiatives seek to limit defects or problems to what level?

3.4 per million

3 multiple choice options

Which type of controls involve executives engaging in personal contact with subordinates as a way of managing an organization?

interpersonal

3 multiple choice options

Financial profits represent which type of control and measurement used by global businesses?

output

3 multiple choice options

The personality of a given organization and its shared norms and values refer to which element?

culture

3 multiple choice options

Many times, organizational change in a business is most effective when pushed from which level of management?

top management

3 multiple choice options

Which model of strategy formulation operates from the basic premise that the key strategic purpose of a business is to maximize financial returns for its owners?

shareholder

3 multiple choice options

According to Miles and Snow, which type of organizations use a basic strategic implementation that involves extending their success through global expansion and finding new market opportunities?

prospectors

3 multiple choice options

Toyota Motor Company has frequently sent hundreds of workers hired at a plant it is opening in a new country to Japan for months of training in the special "Toyota way" of auto manufacturing. Today, though, "Zoom" and other Internet-based training tools make such an expensive approach to knowledge transfer less necessary. What is this an example of?

absorptive capacity

3 multiple choice options

Where there are clashes within a given organization's culture, or even if there are threats to this culture in the future, such a culture will generally not work in what way?

to have an effective organizational control system

3 multiple choice options

Which type of control refers to the percentage of the business in a certain market that is captured by a product or service the organization provides?

market share

3 multiple choice options