Management Midterm 2

Growing critical mass of business people who are comfortable anywhere in the world

Corporate globalism

Tendency of firms to expand sales, manufacturing, and ownership to new markets in other countries

Globalization

What is a pro of globalization?

When countries specialize in competitive advantage:
-Living standards increase
-Spurs innovative activity
-Reduces poverty worldwide

What is a con of globalization?

-If the purchasing power is high, then employee wages go down
-When activity goes from the home country to another country, people can lose their jobs

What is considered the heart of global business?

Shipping containers

What are the 4 stages in the internationalization process?

Stage 1: Exporting
Stage 2: Cooperative contracts
Stage 3: Strategic alliances
Stage 4: Wholly owned affiliates

Which stage of the internationalization process is this:
Produce locally, and ship to another country

Exporting

Which stage of the internationalization process is this:
Partner with another company in forge in country using licensing or franchising

Cooperative contracts

Licensing or Franchise:
Paid to use your design/goods in their country

Licensing

Licensing or Franchise:
You pay a company a fee to operate their company in a foreign country

Franchise

Which stage of the internationalization process is this:
2 companies form equal partnership and combine assets, split costs, and share profits

Strategic alliance

Which stage of the internationalization process is this:
You see another company in another country and buy it

Wholly owned affiliates

True or False: Some don't follow phase model - new global ventures!

True

What are the 4 things to figure out when determine where to do business?

1. Economic
2. Legal/Political
3. Sociocultural
4. Technological

Which "where to do business" is this talking about:
Does the population have purchasing power?

Economic

Which "where to do business" is this talking about:
Are there legal protections that make doing business possible?

Legal/Political

Which "where to do business" is this talking about:
Demographics, beliefs of population. Does customer base align with what you are selling? Who will you hire to work with you based on their skills and education?

Sociocultural

Which "where to do business" is this talking about:
Does this country have the technology infrastructure to make selling my product possible?

Technological

Cultures in which nonverbal and situational messages convey meaning. *Relationship is more important than terms

High-Context Cultures

Cultures in which words convey primary meaning. *Nonverbal messages are secondary and the terms of the deal are more important than building a business relationship

Low-Context Cultures

Which countries have high-context cultures?

-Middle East
-Asia
-Africa
-South America

Which countries have low-context cultures?

-North America
-Europe

What are Hofstede's 5 Dimensions?

1. Long-term vs. Short-term orientation
2. Uncertainty avoidance
3. Masculinity vs Femininity
4. Individualism vs Collectivism
5. Power distance

Which one of Hofstede's Dimensions is this mentioning?:
They view a long-term future view of life and sacrifice the present

Long-term orientation

Which one of Hofstede's Dimensions is this mentioning?:
Focusing on the now rather than in the future

Short-term orientation

Which one of Hofstede's Dimensions is this mentioning?:
People are uncomfortable with no structure and this also measures how comfortable a country is with risk

Uncertainty avoidance

True or False: A country with a low uncertainty avoidance means they like risk

True

Which one of Hofstede's Dimensions is this mentioning?:
Traits associated

Masculinity vs Femininity

If you have a high masculinity, you are...

-Assertive
-Achievement

If you have a high femininity, you are...

-Modest
-Quality of life

Which one of Hofstede's Dimensions is this mentioning?:
Society expects individuals to be self-sufficient or to defer to a group

Individualism

Which one of Hofstede's Dimensions is this mentioning?:
Individuals work for interest of larger group

Collectivism

Which one of Hofstede's Dimensions is this mentioning?:
People in a country are tolerant to wealth... but to what extent?

Power distance

If you have a high power distance...

-You are comfortable with elite, dominant people with wealth

If you have a low power distance...

-You are not comfortable with elite domination

What are 2 characteristics of attractive foreign business climate?

1. Positions company for easy access to growing markets
2. Effective, but cost-efficient place to build an office/manufacturing facility

This type of political risk results from war, revolution, or social unrest

Political Uncertainty

This type of political risk is from changes in laws/government policies that affect how foreign companies conduct business

Policy Uncertainty

What are 2 things you should do when preparing for an international assignment?

1. Language and cross-cultural training
2. Consideration of spouse, family, and dual-career issues

Someone who lives and works outside their native country

Expatriate

What are 4 ways you could get into business?

1. Family-owned
2. Starting new
3. Buy existing
4. Buy franchise

What are 4 ways to get funding for a business?

1. Equity
2. Debt
3. Awards from competitions
4. People give you money and don't expect to be paid back

Funding from investors and they do not expect to be repaid, but you have to give them ownership share in company

Equity

Get a loan from a creditor and they do expect to be paid back with interest. They do not become owners though

Debt

What are the 4 basic types of legal ownership?

1. Proprietorship/Partnership
2. Corporation
3. Subchapter S-Corporation
4. Limited Liability Company (LLC)

Which type of legal ownership is this?:
1 person owns company

Proprietorship

Which type of legal ownership is this?:
2+ people own the company

Partnership

Which type of legal ownership is this?:
Separate, legal entity for business

Corporation

True or False: Corporate earnings are taxed twice

True

Which type of legal ownership is this?:
Separate, legal entity but earnings are only taxed once

-Subchapter S-Corporation
-LLC

What are the main differences between the types of legal ownership?

-How/when earnings are taxed
-Liability for debts

True or False: Subchapter S-Corporation and LLC's act the same

True

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

Effective Mission Statements

What are 3 rules for effective mission statements?

1. What we do and how we do it
2. Use enduring/inspirational words that avoids business buzzwords
3. Can you identify the company by only reading the mission statement

What did David Gumpert mean in his "Burn Your Business Plan" idea?

-Spend more time doing good business then spending all that time writing a business plan

What are 4 key elements that David Gumpert presents that can help you do better business?

1. Great oral presentation
2. Compelling written story
3. Effective website
4. Hard-hitting financial projections

What 4 things make up a SWOT?

1. Strengths
2. Weaknesses
3. Opportunities
4. Threats

Which two parts of SWOT are internal to a business?

-Strengths
-Weaknesses

Which two parts of SWOT are external to a business?

-Opportunities
-Threats

What does "Grand" mean in Corporate "Grand" Strategies?

Is it growing, staying stable, or shrinking?

Which type of Corporate "Grand" Strategy is this?:
Focuses on increasing profits, revenues, market share, or number of places to do business

Growth Strategy

What are two things companies can do within the growth strategy?

1. Expand offerings within company
2. Buying other businesses or merging with another

Which type of Corporate "Grand" Strategy is this?:
Focuses on improving the way that company sells the same products or services to the same customers

Stability Strategy

Which type of Corporate "Grand" Strategy is this?:
Focuses on turning around very poor company performance by shrinking the size or scope of the business

Retrenchment Strategy

True or False: In the retrenchment strategy, companies try to slim down costs and focus on what they do best

True

What are the two elements of firm-level strategies?

1. Strategic moves in direct competition
2. Entrepreneurship

Which type of firm-level strategies is this?:
Attacks and responses in red ocean AKA provide product, and competitor comes in and is repeating cycle

Strategic moves in direct competition

Which type of firm-level strategies is this?:
Movement into deep blue waters AKA look where no sharks are feeding and do your own thing

Entrepreneurship

What are the 7 steps in the rational decision-making process?

1. Define problem
2. Identify decision criteria
3. Weigh criteria
4. Generate alternative courses of action
5. Evaluate each alternative
6. Compute optical decision
7. Limits to ration decision-making

What are the 2 types of corporate strategy?

1. Portfolio strategy
2. BCG Matrix

Which corporate strategy is this?:
Minimizes risk by diversifying investment among various business or product lines

Portfolio strategy

Which corporate strategy is this?:
Categories corps businesses by growth rate and relative market and helps managers decide how to invest corp funds

BCG Matrix

What does BCG stand for?

Boston Consulting Group

What are the four elements in the BCG Matrix?

1. Stars
2. Question Marks
3. Cash Cows
4. Dogs

What are the 6 steps in the control process?

1. Set standard
2. Measure actual performance
3. Compare with standards
4. Identify deviations
5. Analyze deviations
6. Take corrective action

Which step of the control process is this?:
Target that determines desired/expected level of performance

Set standard

Which step of the control process is this?:
Can be quite difficult to measure

Measure actual performance

Which step of the control process is this?:
Subtract actual performance from target

Compare with standard

Which step of the control process is this?:
Identify difference from subtraction (actual and expected)

Identify deviations

Which step of the control process is this?:
Think conceptually what it means

Analyze deviations

Which step of the control process is this?:
After thinking conceptually, take corrective action

Take corrective action

True or False: Control is a continuous process

True

What are the 2 key points to take away from the control process?

1. Ongoing, never-ending process
2. By making small corrective actions if off course, whoever is using it is keeping the "ship" on course and arriving safely

What are the 3 types or "time periods" of control?

1. Feedforward control
2. Concurrent control
3. Feedback control

Which type of "time period" of control is this?:
-Monitoring inputs
-Anticipating and preventing problems before they occur

Feedforward control

Which type of "time period" of control is this?:
-Monitoring processes
-Adjusting ongoing activities
-Monitoring during delivery

Concurrent control

Which type of "time period" of control is this?:
-Monitoring products
-Learning from past mistakes
-Outputs
-Sold product, monitored if your standards were met

Feedback control

In the feedforward control process, inputs means...

BEFORE

In the concurrent control process, productive processes and activities means...

DURING

In the feedback control process, outputs means...

AFTER

What are the 5 types of control methods?

1. Bureaucratic (rules)
2. Objective (measures)
3. Normative (values & beliefs)
4. Concertive (shaped by groups)
5. Self-Control

Which type of control method is this?:
Controls peoples behavior by establishing rules. You are punished/rewarded based on if you follow them or nor

Bureaucratic

Which type of control method is this?:
Set standard based on desired result

Objective

Which type of control method is this?:
Set standards by shaping peoples values

Normative

Which type of control method is this?:
Standards set by groups themselves (also based on beliefs)

Concertive

Which type of control method is this?:
Managers give employees guidance/rules, but employees have a lot of freedom based around them

Self-Control

What is the most widely used control device?

Budgets

Organizations usually have many budgets... what are the 4 we talk about in class?

1. Sales budgets
2. Operating budgets
3. Income statements
4. Balance sheet

Which 2 methods can be used for planning and control tools?

1. PERT Networks
2. Gantt Charts

What 3 questions do planning and control tools ask?

1. How long tasks should take?
2. In what order do tasks need to be done?
3. What tasks can be done at the same time?