Management 101 Essay example

3688 Words Feb 17th, 2014 15 Pages

Major Claim: Successful firms are the ones that first capitalize on economies of scale and scope, create management structures and invest in research and development which allows them to stay ahead of the competition.

Second Claims: Unrelated diversification leads to problems in the long run. Business ownership patterns have diminished the likelihood of many firms’ long term success.

Claims: important to invest, be committed/ companies still ignore logic/ pursuing a wide mkt is key/ hard to enter a mkt when there’s already a 1st mover/ company succeed when it dvlps an economy of scale and scope Major Concepts

Economies of scale: Doing things on a greater scale makes things cheaper.

Economies of scope: Being
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Stock Market Pressures: When companies focus on making investors happy. Caused by unrelated diversification.

Short term thinking: In the long run, short term thinking can be harmful to the company.

First, three major investments to “set the stage”:

1. Build large, efficient production capacity (to exploit economies of scale and scope);
Scale = BIG, to get costs per unit down
Scope = efficient use of common items
2. Create extensive marketing and distribution channels
3. Establish well-organized management teams

Concept maps: logic of managerial enterprises
Production, mktg, mgmt

“Do it First, Do it Right, and Do it Best”


Major Claim: Organizational growth is characterized as a series of developmental phases (Age means growth). Management practices that work well in one phase bring on a crisis in the next (Natural process to go through stages).

Second Claims: Organizations should not try to skip phases (Example: Child growing up). Top managers whose style is no longer appropriate should remove themselves (As growing and developing, managers should give up positions to someone more suitable). Growth is not inevitable (If not wanting to grow, then it is possible to keep companies small).

Major Claim

As companies grow, gets out of hand, more employees are needed. Need organization and formality.

Developmental stages (Phases of evolution)

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