Managment 405

Total Flash Cards » 54
 
1. 

What are the things that motivate a company to expand internationally?

 

• Increase size of potential markets

• economies of scale

• Taking advantage of arbitrage opportunities

• Extend PLC

• Optimize the physical location for every activity in its value chain

performace enhancer

cost reduction

 
2. 

Potential risks of international expansion

 

currency risks

economic risks

political risks

certain types of management risks

 
3. 

what are some Political and economic risk

 

9 Social unrest

9 Military turmoil

9 Demonstrations

9 Violent conflicts and terrorism

9 Laws and their enforcement

 
4. 

least corrupt countries

 

FINLAND, ICELAND, NEW ZEALAND

 
5. 

what are some currency risks?

 

9 Currency exchange fluctuations

9 Appreciation of the U.S. dollar

 
6. 

Management risks

 

9 Culture

9 Customs

9 Language

9 Income levels

9 Customer preferences

9 Distribution system

 
7. 

Offshoring and outsourcing:

 

Outsourcing

9 occurs when a firm decides to utilize other firms to perform value-creating activities that were previously performed in-house.

• Offshoring

9 takes place when a firm decides to shift an activity that they were previously performing in a domestic location to a foreign location.

 
8. 

2 opposing pressures as you expand international (Cost and adapting to local markets)

 

reducing costs and adapting to local markets

• Strategies that favor global products and brands

9 Should standardize all of a firm’s products for all of their worldwide markets

9 Should reduce a firm’s overall costs by spreading investments over a larger market

 
9. 

Three assumptions

 

1. Customer needs and interests worldwide are becoming more homogeneous

2. People are willing to sacrifice product preferences for lower prices at high quality

3. Economies of scale in production and marketing can be achieved through supplying global markets

 
10. 

Fees that a multinational receives from a foreign licensee in return for its use of intellectual property are usually called

 

royalities

 
11. 

All of the factors below have made India's software services industry extremely competitive on a global scale

 

A. large pool of skilled workers

B. Large network of public and private educational institutions

C. large growing market and sophisticated customers

 
12. 

assumptions that may not always be true

 

1. Product markets vary widely between nations

2. In many product and service markets, there appears to be a growing interest in multiple product features, quality and service

• Technology permits flexible production

• Cost of production may not be critical to product cost

• Firm’s strategy should not be product-driven

 
13. 

4 diff types of strategies of international expansion

 

global

transnational

international

multi-domestic

 
14. 

International Strategy:

 

a strategy based on firms’ diffusion and adaptation of the parent companies’ knowledge and expertise to foreign markets, used in industries where the pressures for both local adaptation and lowering costs are low.

• based on diffusion and adaptation of the parent company’s knowledge and expertise to foreign markets.

• primary goal is worldwide exploitation of the parent firm’s knowledge and capabilities

 
15. 

Global Strategy:

 

a strategy based on firms’ centralization and control by the corporate office, with the primary emphasis on controlling costs, and used in industries where the pressure for local adaptation is low and the pressure for lowering costs is high

• Competitive strategy is centralized and controlled largely by corporate office

• Emphasizes economies of scale

 
16. 

Multi-domestic Strategy:

 

a strategy based on firms’ differentiating their products and services to adapt to local markets, used in industries where the pressure for local adaptation is high and the pressure for lowering costs is low.

• Emphasis is differentiating products and services to adapt to local markets

• Authority is more decentralized

 
17. 

Transnational Strategy:

 

a strategy based on firms’ optimizing the trade-offs associated with efficiency, local adaptation, and learning, used in industries where the pressures for both local adaptation and lowering costs are high

• Optimization of tradeoffs associated with efficiency, local adaptation, and learning

• Firm’s assets and capabilities are dispersed according to the most beneficial location for a specific activity

 
18. 

Entrepreneurship:

 

9 the creation of new value by an existing organization or new venture that involves the assumption of risk.

 
19. 

• Entrepreneurial opportunities(recognition):

 

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.

 
20. 

• New value can be created in:

 

9 Start-up ventures

9 Major corporations

9 Family-owned businesses

9 Non-profit organizations

9 Established institutions

 
21. 

Opportunity Analysis Framework:

 

Triangle= Opportunity, Resources, and Entrepreneurs

 
22. 

The majority of entrepreneurial start-ups are financed with:

 

Personal savings and the contributions of family and friends

 
23. 

start ups (how do they happen?

 

• Current or past work experiences

• Hobbies that grow into businesses or lead to inventions

• Suggestions by friends or family

• Chance events

• Change

 
24. 

Entrepreneurial opportunities in existing firms:

 

• Needs of existing customers

• Suggestions by suppliers

• Technological developments that lead to new advances

• Change

 
25. 

Discovery Phase:

 

9 the process of becoming aware of a new business concept.

9 May be spontaneous and unexpected

9 May occur as the result of deliberate search for new venture projects or creative solutions to business problems

 
26. 

Opportunity evaluartion phase

 

•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

 
27. 

Characteristics of good opportunities:

 

Attractive. The opportunity must be attractive in the marketplace; that is, there must be market demand for the new product or service

Achievable. The opportunity must be practical and physically possible

Durable. The opportunity must be attractive long enough for the development and deployment to be successful; that is, the window of opportunity must be open long enough for it to be worthwhile.

Value creating. The opportunity must be potentially profitable; that is, the benefitsmust surpass the cost of development by a significant margin.

 
28. 

To obtain funding for rapid growth, firms often seek

 

venture capital

 
29. 

Entrepreneurial Resources:

 

• Human capital

• Social capital

• Government resources

9 Small Business Administration

9 Government contracting

9 State and local governments

 
30. 

Entrepreneurial Leadership (3 characteristics):

 

Vision--may be most important asset, ability to envision realities that dont exist yet, transformational leadership, share with others

Dedication and drive--reflected in hard work, patience, stamina, internal motivation, intellectual commitment to enterprise

comittment to excellence--venture founders and small business owners must understand customer, provide quality products, pay attention to detials, continuously learn

 
31. 

what is strategic control

 

9 the process of monitoring and correcting a firm’s strategy and performance

Informational, behavioral

 
32. 

Traditional control system

 

1. strategies are formulated and top management sets goals

2. strategies are implemented

3. performance is measured against the predetermined goal set

 
33. 

traditional control system most appropriate when

 

Environment is stable and relatively simple

Goals and objectives can be measured with certainty

Little need for complex measures of performance

 
34. 

Contemporary control system

 

Continually monitoring the environments (internal and external)

Identifying trends and events that signal the need to revise strategies, goals and objectives

 
35. 

two key issues

 

9 Scan and monitor external environment (general and industry)

9 Continuously monitor the internal environment

 
36. 

Effectiveness of Contemporary Strategic Control System:

 

Focus on constantly changing information that has potential strategic importance.

  1. The information is important enough to demand frequent and regular attention from all levels of the organization.
  2. The data and information generated are best interpreted and discussed in face-to-face meetings.
  3. The control system is a key catalyst for an ongoing debate about underlying data, assumptions, and action plans.

 
37. 

Culture sets implicit boundaries

 

• (unwritten standards of acceptable behavior)

9 Dress

9 Ethical matters

9 The way an organization conducts its business

 
38. 

Sustaining that culture

 

• Effective culture must be

9 Cultivated

9 Encouraged

9 Fertilized

 
39. 

Maintaining an effective culture

 

9 Storytelling

9 Rallies or pep talks by top executives

 
40. 

How companies motivate employees: Rewards and incentives

 

9 Powerful means of influencing an organization’s culture

9 Focuses efforts on high-priority tasks

9 Motivates individual and collective task performance

9 Can be an effective motivator and control mechanism

 
41. 

Corporate governance

 

9 the relationship among various participants in determining the direction and performance of corporations.

9 primary participants are the shareholders, the management, and the board of directors.”

 
42. 

External governance control mechanisms

 

9 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.

• Market for corporate control

• Auditors

• Banks and analysts

• Regulatory bodies

• Media and public activists

 
43. 

Aircraft makers Boeing and Airbus have a high degree of __________ because they make very similar products and have many buyers in common.

 

market commonality

 
44. 

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 is the oldest and most common organizational form:

Staff serve as an extension of the top executive’s personality

Highly informal

Coordination of tasks by direct supervision

Decision making is highly centralized

Little specialization of tasks, few rules and regulations, informal evaluation and reward system

 
45. 

what are the adantages and disadvantages

 

• Advantages

9 Highly informal

9 Centralized decision making

9 Little specialization

• Disadvantages

9 Employees may not understand their responsibilities

9 May take advantage of lack of regulation

 
46. 

Functional structure:

 

An organizational form in which the major functions of the firm, such as production, marketing, R&D, and accounting, are grouped internally.

 
47. 

Advantages(Functional)

 

9 Enhanced coordination and control

9 Centralized decision making

9 Enhanced organizational-level perspective

9 More efficient use of managerial and technical talent

9 Facilitated career paths and development in specialized areas

 
48. 

disadvantages

 

9 Impeded communication and coordination due to differences in values and orientations

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

9 Difficult to establish uniform performance standards

 
49. 

Divisional structure:

 

An organizational form in which products, projects, or product markets are grouped internally.

9 Also called multidivisional structure or M-Form

Organized around products, projects, or markets

Each division includes its own functional specialists typically organized into departments

Divisions are relatively autonomous and consist of products and services that are different from those of other divisions

Division executives help determine product-market and financial objectives

 
50. 

advanatges and disadvantages

 

• Advantages(Divisional/Multidivisional)

9 Strategic business unit (SBU) structure

9 Separation of strategic and operating control

9 Quick response to important changes in external environment

9 Minimal problems of sharing resources across functional departments

9 Development of general management talent is enhanced

• Disadvantages(Divisional/Multidivisional)

9 Can be very expensive

9 Can be dysfunctional competition among divisions

9 Differences in image and quality may occur across divisions

9 Can focus on short-term performance

 
51. 

matrix structure advantages and disadvantages

 

an organizational form in which there are multiple lines of authority and some individuals report to at least two managers.

• Advantages

9 Facilitates the use of specialized personnel, equipment and facilities

9 Provides professionals with a broader range of responsibility and experience

• Disadvantages

9 Can cause uncertainty and lead to intense power struggles

9 Working relationships become more complicated

9 Decisions may take longer

 
52. 

Successful learning organizations

 

9 Create a proactive, creative approach to the unknown

9 Actively solicit the involvement of employees at all levels

9 Enable all employees to use their intelligence and apply their imagination

 
53. 

key elements of a learning organization

 

1. inspiring and motivating people with a mission r purpose

2. empowering employees at all levels

3. accumulating and sharing internal knowledge

4. gathering and integrtaing external information

5. challenging the status quo and enabling creativity

 
54. 

Leaders base of power(Personal vs. Organizational) (Formal and informal),

 

Power

9 a leader’s ability to get things done in a way he or she wants them to be done

Organizational bases of power

9 A formal management position that is the basis of a leader’s power.