Podcast
Questions and Answers
Firms engaging in globalization must prioritize culturally insensitive decisions when using the strategic management process.
Firms engaging in globalization must prioritize culturally insensitive decisions when using the strategic management process.
False
Globalization has led to lower performance standards in many competitive dimensions.
Globalization has led to lower performance standards in many competitive dimensions.
False
A company's ability to meet local standards is sufficient to earn above-average returns in the twenty-first century.
A company's ability to meet local standards is sufficient to earn above-average returns in the twenty-first century.
False
The flow of workers is restricted across global economies.
The flow of workers is restricted across global economies.
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Technology-related trends have a negligible impact on competitive environments.
Technology-related trends have a negligible impact on competitive environments.
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Managers do not need to learn how to operate effectively in a 'multi-polar' world.
Managers do not need to learn how to operate effectively in a 'multi-polar' world.
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Firms competing domestically are not affected by global performance standards.
Firms competing domestically are not affected by global performance standards.
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Global companies' goods or services are typically inferior to those of domestic firms.
Global companies' goods or services are typically inferior to those of domestic firms.
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Walmart's proprietary approach to supply chain management involves the effective use of tangible resources.
Walmart's proprietary approach to supply chain management involves the effective use of tangible resources.
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Knowledge is a tangible resource that can be easily quantified and measured.
Knowledge is a tangible resource that can be easily quantified and measured.
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Firms do not need to develop and acquire knowledge in order to gain a competitive advantage.
Firms do not need to develop and acquire knowledge in order to gain a competitive advantage.
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A strong knowledge-base is not necessary for creating innovations.
A strong knowledge-base is not necessary for creating innovations.
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Knowledge spillovers to competitors are rare and do not need to be addressed.
Knowledge spillovers to competitors are rare and do not need to be addressed.
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The iPhone introduced by Apple only changed the cell phone industry.
The iPhone introduced by Apple only changed the cell phone industry.
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Strategic flexibility involves coping with certainty and stability in a competitive environment.
Strategic flexibility involves coping with certainty and stability in a competitive environment.
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Firms with strategic flexibility are unable to respond to various demands and opportunities in a competitive environment.
Firms with strategic flexibility are unable to respond to various demands and opportunities in a competitive environment.
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Apple's iPad is contributing to changes in the publishing industry by moving from hard copies to electronic books.
Apple's iPad is contributing to changes in the publishing industry by moving from hard copies to electronic books.
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The Internet and IT advances have given small firms less flexibility in competing with large firms.
The Internet and IT advances have given small firms less flexibility in competing with large firms.
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Building routines that facilitate the diffusion of local knowledge throughout the organization is not important for firms.
Building routines that facilitate the diffusion of local knowledge throughout the organization is not important for firms.
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Knowledge is not a critical organizational resource and a valuable source of competitive advantage in the twenty-first century.
Knowledge is not a critical organizational resource and a valuable source of competitive advantage in the twenty-first century.
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The basis of competition shifted from intangible resources to hard assets in the 1980s.
The basis of competition shifted from intangible resources to hard assets in the 1980s.
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Apple's new technologies and products are contributing to the old industrial age.
Apple's new technologies and products are contributing to the old industrial age.
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The iPod revolutionized how music is sold to and used by consumers through iTunes.
The iPod revolutionized how music is sold to and used by consumers through iTunes.
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Dramatic changes in information technology have not occurred in recent years.
Dramatic changes in information technology have not occurred in recent years.
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It took the radio 35 years to get into 25 percent of all homes in the United States.
It took the radio 35 years to get into 25 percent of all homes in the United States.
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The rate of technology diffusion has decreased substantially over the past 15 to 20 years.
The rate of technology diffusion has decreased substantially over the past 15 to 20 years.
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The impact of technological changes on individual firms and industries has been minimal.
The impact of technological changes on individual firms and industries has been minimal.
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People still rent movies on videotapes at retail stores.
People still rent movies on videotapes at retail stores.
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The publishing industry is moving rapidly from electronic format to hard copy.
The publishing industry is moving rapidly from electronic format to hard copy.
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Perpetual innovation refers to the slow pace of technological changes.
Perpetual innovation refers to the slow pace of technological changes.
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The shorter product life cycles resulting from rapid diffusions of new technologies place a competitive premium on being able to quickly introduce new, innovative goods and services into the marketplace.
The shorter product life cycles resulting from rapid diffusions of new technologies place a competitive premium on being able to quickly introduce new, innovative goods and services into the marketplace.
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Technology diffusion and disruptive technologies are not related to the information age.
Technology diffusion and disruptive technologies are not related to the information age.
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Strategic flexibility can be easily developed by firms without any challenges.
Strategic flexibility can be easily developed by firms without any challenges.
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A firm's past core competencies can facilitate strategic flexibility.
A firm's past core competencies can facilitate strategic flexibility.
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Technological changes can hinder a firm's ability to develop strategic flexibility.
Technological changes can hinder a firm's ability to develop strategic flexibility.
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The I/O model emphasizes the role of internal organizational factors in determining a firm's performance.
The I/O model emphasizes the role of internal organizational factors in determining a firm's performance.
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A firm's ability to learn quickly and adapt to changes is crucial for strategic flexibility.
A firm's ability to learn quickly and adapt to changes is crucial for strategic flexibility.
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The I/O model assumes that a firm's managers have significant control over its performance.
The I/O model assumes that a firm's managers have significant control over its performance.
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Industry properties have no impact on a firm's performance according to the I/O model.
Industry properties have no impact on a firm's performance according to the I/O model.
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Strategic flexibility is not necessary for a firm to compete effectively in today's business environment.
Strategic flexibility is not necessary for a firm to compete effectively in today's business environment.
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Study Notes
The March of Globalization
- Firms engaging in globalization must make culturally sensitive decisions when using the strategic management process.
- Globalization has led to higher performance standards in many competitive dimensions, including quality, cost, productivity, product introduction time, and operational efficiency.
- These standards affect firms competing in both the global and domestic markets.
- Customers prefer to purchase from global competitors rather than domestic firms due to superior goods or services.
- Workers flow freely among global economies, and employees are a key source of competitive advantage.
- Managers must learn to operate effectively in a "multi-polar" world with many important countries having unique interests and environments.
Technology and Technological Changes
- Technology-related trends and conditions can be categorized into three areas: technology diffusion and disruptive technologies, the information age, and increasing knowledge intensity.
- These categories significantly alter the nature of competition and contribute to highly dynamic competitive environments.
- Technology diffusion refers to the rate at which new technologies become available and are used, which has increased substantially over the past 15-20 years.
- The impact of technological changes on individual firms and industries has been broad and significant, with examples including the shift from movie rentals on videotapes to electronic formats.
- Perpetual innovation is a term used to describe the rapid and consistent introduction of new, information-intensive technologies that replace older ones.
- The iPhone and iPod are examples of "disruptive technologies" that have changed several industries, including the cell phone and music industries.
The Information Age
- Dramatic changes in information technology (IT) have occurred in recent years, including the development of personal computers, cellular phones, artificial intelligence, virtual reality, massive databases, and social networking sites.
- The ability to effectively and efficiently access and use information has become an important source of competitive advantage in virtually all industries.
- IT has given small firms more flexibility in competing with large firms, if the technology is used efficiently.
Increasing Knowledge Intensity
- Knowledge is the basis of technology and its application, and is a critical organizational resource and an increasingly valuable source of competitive advantage.
- The basis of competition has shifted from hard assets to intangible resources, including knowledge, since the 1980s.
- Relationships with customers and suppliers are examples of intangible resources that need to be managed.
- Knowledge is gained through experience, observation, and inference, and is an intangible resource.
- The value of intangible resources, including knowledge, is growing as a proportion of total shareholder value.
Strategic Flexibility
- Strategic flexibility is a set of capabilities used to respond to various demands and opportunities in a dynamic and uncertain competitive environment.
- Firms must develop strategic flexibility in all areas of their operations to cope with uncertainty and its accompanying risks.
- Strategic flexibility involves continuous learning, which provides the firm with new and up-to-date skill sets, allowing it to adapt to its environment as it encounters changes.
The I/O Model of Above-Average Returns
- The industrial organization (I/O) model explains the external environment's dominant influence on a firm's strategic actions.
- The model specifies that the industry or segment of an industry in which a company chooses to compete has a stronger influence on performance than do the choices managers make inside their organizations.
- The firm's performance is determined primarily by a range of industry properties, including economies of scale, barriers to market entry, diversification, product differentiation, the degree of concentration of firms in the industry, and market frictions.
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Description
This quiz covers the cultural sensitivities and complexities involved in global business operations, using examples like Starbucks in European markets.
