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91 Cards in this Set

  • Front
  • Back
Globalization
the increase in international exchange, including trade in goods and services as well as exchange of money, information, ideas, and information.

the growing similarity of laws, rules, norms, values, and ideas across countries.
Factor Endowments
The nation’s position in factors of production, such as skilled labor or infrastructure, necessary to compete in a given industry.
Demand Conditions
The nature of home-market demand for the industry’s product or service.
Related and Supporting Industries
The presence or absence in the nation of supplier industries and other related industries that are internationally competitive.
Firm Strategy, Structure, and Rivalry
The conditions in the nation governing how companies are created, organized, and managed, as well as the nature of domestic rivalry.
To achieve competitive advantage factors of production must be:
Industry specific
Firm specific
Pool of Resources is...?
less important than the speed and efficiency with which the resources are deployed
Demanding consumers drive firms in a country to?
-Meet high standards
-Upgrade existing products and services
-Create innovative products and services
Competitive rivalry increases the efficiency with which firms:
-Develop within the home country
-Market within the home country
-Distribute products and services within the home country
Political and economic risk of International Expansion
-Social unrest
-Military turmoil
-Demonstrations
-Violent conflicts and terrorism
-Laws and their enforcement
Currency risks
-Currency exchange fluctuations
-Appreciation of the U.S. dollar
Management risks
-Culture
-Customs
-Language
-Income levels
-Customer preferences
-Distribution system
Outsourcing
occurs when a firm decides to utilize other firms to perform value-creating activities that were previously performed in-house.
Offshoring
takes place when a firm decides to shift an activity that they were previously performing in a domestic location to a foreign location.
Exporting
Producing goods in one country to sell to residents of another country.
Licensing
company receives a fee in exchange for the right to use its intellectual property.
Wholly Owned Subsidiary
a business in which a multinational company owns 100 percent of the stock.
Entrepreneurship
the creation of new value by an existing organization or new venture that involves the assumption of risk.
Opportunity Recognition
the process of discovering and evaluating changes in the business environment, such as a new technology, socio-cultural trends, or shifts in consumer demand, that can be exploited.
Discovery Phase
-the process of becoming aware of a new business concept.

-May be spontaneous and unexpected

-May occur as the result of deliberate search for new venture projects or creative solutions to business problems
Opportunity Evaluation Phase
-involves analyzing an opportunity to determine whether it is viable and strong enough to be developed into a full-fledged new venture.

-Talk to potential target customers
-Discuss it with production or logistics managers
-Conduct feasibility analysis
Three Characteristics of Entrepreneurial Leadership
1)Vision

2)Dedication and drive

3)Commitment to excellence
Pioneering new entry
a firm’s entry into an industry with a radical new product or highly innovative service that changes the way business is conducted.
Imitative new entry
a firm’s entry into an industry with products or services that capitalize on proven market successes and that usually has a strong marketing orientation.
Adaptive new entry
a firm’s entry into an industry by offering a product or service that is somewhat new and sufficiently different to create value for customers by capitalizing on current market trends.
Overall Cost Leadership
-Simple organizational structures

-More quickly upgrade technology and integrate feedback from the marketplace

-Make timely decisions that affect cost
Differentiation
-Use new technology

-Deploy resources in a radical new way
Focus
Niche strategies fit the small business mold
Competitive Dynamics
Intense rivalry, involving actions and responses, among similar competitors vying for the same customers in a marketplace.
Threat Analysis
A firm’s awareness of its closest competitors and the kinds of competitive actions they might be planning.

-Market commonality

-Resource similarity
Forbearance
a firm’s choice of not reacting to a rival’s new competitive action.
Co-opetition
A firm's strategy of both cooperating and competing with rival firms
Strategic Control
-the process of monitoring and correcting a firm’s strategy and performance

-Informational, behavioral
Traditional Control System
-strategies are formulated and top management sets goals

-strategies are implemented

-performance is measured against the predetermined goal set
Contemporary Control System
-Continually monitoring the environments (internal and external)

-Identifying trends and events that signal the need to revise strategies, goals and objectives
Informational Control
Concerned with whether or not the organization is “doing the right things”
Behavioral Control
Concerned with whether or not the organization is “doing things right” in the implementation of its strategy
Two Key Issues(Informational Control)
-Scan and monitor external environment (general and industry)

-Continuously monitor the internal environment
Organizational Culture
a system of shared values and beliefs that shape a company’s people, organizational structures, and control systems to produce behavioral norms.
Rewards and incentive systems
-Powerful means of influencing an organization’s culture

-Focuses efforts on high-priority tasks

-Motivates individual and collective task performance

-Can be an effective motivator and control mechanism
Potential Downside(of motivating with rewards and incentives)
-Subcultures may arise in different business units with multiple reward systems

-May reflect differences among functional areas, products, services and divisions
Corporate Governance
-the relationship among various participants in determining the direction and performance of corporations.

-primary participants are the shareholders, the management, and the board of directors.”
Corporation
A mechanism created to allow different parties to contribute capital, expertise, and labor for the maximum benefit of each party.
Board of Directors
a group that has a fiduciary duty to ensure that the company is run consistently with the long-term interests of the owners, or shareholders, of a corporation and that acts as an intermediary between the shareholders and management.
Shareholder Activism
actions by large shareholders, both institutions and individuals, to protect their interests when they feel that managerial actions diverge from shareholder value maximization.
External governance control mechanisms
methods that ensure that managerial actions lead to shareholder value maximization and do not harm other stakeholder groups and that are outside the control of the corporate governance system.
Auditors(Sarbanes-Oxley Act)
-Barred from certain types of non-audit work

-Not allowed to destroy records for five years

-Lead partners auditing a firm should be changed at least every five years
CEOs and CFOs(Sarbanes-Oxley Act)
-Must fully reveal off-balance sheet finances

-Vouch for the accuracy of information revealed
Executives(Sarbanes-Oxley Act)
-Must promptly reveal the sale of shares in firms they manage

-Are not allowed to sell shares when other employees cannot
Organizational Structure
refers to formalized patterns of interactions that link a firm’s tasks, technologies, and people
Simple Structure
An organizational form in which the owner-manager makes most of the decisions and controls activities, and the staff serve as an extension of the top executive.
Simple Structure Advantages:
-Highly informal

-Centralized decision making

-Little specialization
Simple Structure Disadvantages:
-Employees may not understand their responsibilities

-May take advantage of lack of regulation
Functional Structure
An organizational form in which the major functions of the firm, such as production, marketing, R&D, and accounting, are grouped internally.
Functional Structure Advantages:
-Enhanced coordination and control

-Centralized decision making

-Enhanced organizational-level perspective

-More efficient use of managerial and technical talent

-Facilitated career paths and development in specialized areas
Functional Structure Disadvantages:
-Impeded communication and coordination due to differences in values and orientations

-May lead to short-term thinking (functions vs. organization as a whole)

-Difficult to establish uniform performance standards
Divisional Organizational Structure
-An organizational form in which products, projects, or product markets are grouped internally.

-Also called multidivisional structure or M-Form
Divisional Structure Advantages:
-Strategic business unit (SBU) structure

-Separation of strategic and operating control

-Quick response to important changes in external environment

-Minimal problems of sharing resources across functional departments

-Development of general management talent is enhanced
Divisional Structure disadvantages:
-Can be very expensive

-Can be dysfunctional competition among divisions

-Differences in image and quality may occur across divisions

-Can focus on short-term performance
Strategic business unit (SBU) structure
An organizational form in which products, projects, or product market divisions are grouped into homogeneous units.
SBU Structure Advantages:
-task of planning and control by the corporate office more manageable

-individual businesses can react more quickly to important changes
SBU Structure Disadvantages:
-may become difficult to achieve synergies

-additional level of management increases overhead expenses
Holding Company Structure
An organizational form in which the divisions have a high degree of autonomy both from other divisions and from corporate headquarters.
Holding Company Structure Advantages:
-cost savings associated with lower overhead

-autonomy increases the motivational level of divisional executives
Holding Company Structure Disadvantages:
-inherent lack of control and dependence

-limited staff support
Matrix organizational structure
an organizational form in which there are multiple lines of authority and some individuals report to at least two managers.
Matrix organizational structure Advantages:
-Facilitates the use of specialized personnel, equipment and facilities

-Provides professionals with a broader range of responsibility and experience
Matrix organizational structure Disadvantages:
-Can cause uncertainty and lead to intense power struggles

-Working relationships become more complicated

-Decisions may take longer
Global Start-Up
a business organization that, from inception, seeks to derive significant competitive advantage from the use of resources and the sale of outputs in multiple countries.
Boundaryless Organizational Designs
Organizations in which the boundaries, including vertical, horizontal, external, and geographic boundaries, are permeable.
Barrier-free Organization
An organizational design in which firms bridge real differences in culture, function, and goals to find common ground that facilitates information sharing and other forms of cooperative behavior.
Modular Organization
An organization in which non-vital functions are outsourced, which uses the knowledge and expertise of outside suppliers while retaining strategic control.
Virtual Organization
a continually evolving network of independent companies that are linked together to share skills, costs, and access to one another’s markets.
Ambidextrous Organizational Designs
Organization designs that attempt to simultaneously pursue modest, incremental innovations as well as more dramatic, breakthrough innovations.
Leadership
process of transforming organizations from what they are to what the leader would have them become
Required Capacities(for leadership)
-Solve increasingly complex problems

-Be proactive in approach

-Develop viable strategic options
Designing the Organization
A strategic leadership activity of building structures, teams, systems, and organizational processes that facilitate the implementation of the leader’s vision and strategies.
Excellent and Ethical Organizational Culture
an organizational culture focused on core competencies and high ethical standards
Integrative Thinking
the process by which people reconcile opposing thoughts to identify creative solutions that provide them with more options and new alternatives
Power
a leader’s ability to get things done in a way he or she wants them to be done.
Organizational bases of power
A formal management position that is the basis of a leader’s power.
Emotional Intelligence
-an individual’s capacity for recognizing his own emotions and those of others

-including the five components of self awareness, self regulation, motivation, empathy, and social skills.
Successful Learning Organizations:
-Create a proactive, creative approach to the unknown

-Actively solicit the involvement of employees at all levels

-Enable all employees to use their intelligence and apply their imagination
Top-Down Perspective
-Start at the top.

-Clarify the organization’s mission, vision, and values.

-Clearly specify the tasks, roles, and rewards for employees.

-Delegate responsibility.

-Hold people accountable for results.
Bottom-up View
-Start at the bottom by understanding needs of employees

-Teach employees skills of self-management

-Build teams to encourage cooperative behavior

-Encourage intelligent risk taking

-Trust people to perform
“Open book” management
-Numbers on each employee’s work performance and production costs are generated daily

-Information is aggregated once a week from top level to bottom level

-Extensive training in how to use and interpret the numbers
Organizational Ethics
the values, attitudes, and behavioral patterns that define an organization’s operating culture and that determine what an organization holds as acceptable behavior.
Ethical Orientation
-the practices that firms use to promote an ethical business culture,

-Includes ethical role models, corporate credos and codes of conduct, ethically-based reward and evaluation systems, and consistently enforced ethical policies and procedures.
Ethical Values
-Shape the search for opportunities

-Shape the design organizational systems

-Shape the decision-making process used by individuals and
groups

-Provide a common frame of reference that serves as a unifying force
Compliance-based Ethics Programs
programs for building ethical organizations that have the goal of preventing, detecting, and punishing legal violations.
Integrity-based Ethics Programs
programs for building ethical organizations that combine a concern for law with an emphasis on managerial responsibility for ethical behavior,