Management Test 2 Review PDF

CHAPTER 6 **Entrepreneurship**: the process of initiating a business venture, organizing the necessary resources, assuming the associated risks, and enjoying the rewards\ ** Entrepreneur**: someone who engages in entrepreneurship **Intrapreneurship:** refers to a systems within a company or organ...

CHAPTER 6 **Entrepreneurship**: the process of initiating a business venture, organizing the necessary resources, assuming the associated risks, and enjoying the rewards\ ** Entrepreneur**: someone who engages in entrepreneurship **Intrapreneurship:** refers to a systems within a company or organization that allows employees to act like entrepreneurs.\ ** Micropreneurship:** small business who focuses on individual autonomy and flexibility. They intentionally stay small with less than five employees. Process of starting an online business\ − Find a market niche\ − Create a professional Web site\ − Choose a domain name\ − Know when to pivot (change strategic directions)\ − Use social media Global entrepreneurship has experienced a tremendous boost\ − Advances in technology\ − Rapid expansion of the middle class in countries such as China\ and India\ − Rise of female entrepreneurs Franchising: firm (franchise) collects upfront and ongoing fees in exchange\ for letting other firms (franchisees) offer products and services under its\ brand name and using its processes\ − Franchise provides management help\ − Provides established name and national advertising\ − Disadvantages include a lack of control; franchisors who dictate the\ prices; requirement of purchasing expensive equipment; and new\ product offerings\ − Start-up costs may be high and are typically followed with monthly\ payments **Idealists:** Rewarded by chance to work on something new and creative. **Hard Workers:** Thrive on the challenge of building a larger, more profitable business. **Optimizers**: Get personal satisfaction from being business owners **Sustainers**: Enjoy chance to balance work and personal life. **Jugglers**: High-energy people who enjoy handling every detail of their own businesses. CHAPTER 7 **Goal:** desired future circumstance or condition that the organization attempts to realize\ ** Plan**: blueprint for goal achievement specifying the necessary resource allocations, schedules, tasks, and other actions\ **Planning:** determining the organization's goals and defining the means for achieving them **Strategic goals**: official goals; broad statements describing where the\ organization wants to be in the future\ ** Strategic plans**: define the action steps by which the company intends to\ attain strategic goals\ − Blueprint that defines organizational activities and resource allocations\ − Tend to be long term **Tactical goals**: the results that major divisions and departments within the organization intend to achieve\ − Apply to middle management\ **Tactical plans**: define what major departments and organizational subunits will do to implement the organization's strategic plan\ − Tend to be short term **Operational goals**: results expected from departments, work groups, and individuals\ − Precise and measurable\ **Operational plans**: developed at the lower levels of the organization to specify action plans toward achieving operational goals and to support tactical plans\ − Goals stated in quantitative terms\ − Schedules are an important component **Contingency planning**: define company responses to be taken in the case of emergencies, setbacks, or unexpected conditions\ **Scenario building**: forecasting technique that looks at current trends and discontinuities and visualizes future possibilities\ **Stretch goals**: reasonable yet highly ambitious and compelling goals, characterized by both extreme difficulty and extreme novelty, that energize people and inspire excellence\ **Crisis planning**: preparing organization, managers, and employees to cope\ with catastrophic events that could destroy the firm Benefits of Planning\ Goals and plans\ − Provide a source of motivation and commitment\ − Guide resource allocation\ − Are a guide to action\ − Set a standard of performance Limitations of Planning\ Goals and plans\ − Can create too much pressure\ − Can create a false sense of certainty\ − May cause rigidity in a turbulent environment\ − Can get in the way of intuition and creativity **Mission:** the organization's reason for existence\ **Mission statement**: a formal and broadly stated definition of purpose that distinguishes the organization from others of a similar type. Approaches to Managing Goal Conflict\ Build a coalition\ − Coalition management: building an alliance of people who support managers and influence efforts toward achieving goals\ Modify goals by time or location\ Address conflicts with debate and dialogue\ Break down barriers and promote cross-silo cooperation\ Manager departures **Effective Goals** -Are specific and measurable -Are linked to rewards -Are challenging but realistic -Have a defined time period -Cover key result areas CHAPTER 8 **Corporate-level strategy**: pertains to the organization as a whole and the combination of business units and product lines that makes up the corporate entity.\ **Business-level strategy**: pertains to each business unit or product line.\ ** Functional-level strategy**: pertains to the major functional departments within the business unit. **SWOT analysis**: audit of internal and external factors\ − Internal Strengths and Weaknesses\ − External Opportunities and Threats **Differentiation strategy**: distinguish products and services\ **Cost leadership strategy**: aggressively seek efficient facilities, cost reductions, and cost controls\ **Focus strategy**: concentration on a specific region or buyer\ − Either differentiation or cost leadership approach **Globalization strategy**: use of standardized product design and advertising strategies throughout the world.\ − Based on the assumption that a single global market exists for many consumer and industrial products.\ **Multidomestic strategy**: handling of competition in each country remains independent of industry competition in other countries\ − Especially important for service companies.\ **Glocalization strategy**: combines global coordination to attain efficiency with local flexibility to meet needs in different countries. **BCG matrix**: organizes business along two dimensions---business growth rate and market share. **Strategy**: plan of action that describes resource allocation and activities for dealing with the environment, achieving a competitive advantage, and attaining the organization's goals. **Diversification:** strategy of moving into new lines of business.\ **Merger:** occurs when two or more organizations combine to become one.\ **Joint venture**: involves a strategic alliance or program by two or more organizations.\ **Related diversification**: expansion into new business related to existing business activities.\ **Unrelated diversification**: expansion into new lines of business that are not related.\ **Vertical integration**: expansion into businesses that supply to the business or are distributors. **Strategy formulation**: includes the planning and decision making that lead to the establishment of the firm's goals and the development of a specific strategic plan\ **Strategy execution**: the use of managerial and organizational tools to direct resources toward accomplishing strategic results CHAPTER 9 **Programmed decisions:** involve situations that have occurred often enough to enable decision rules to be developed and applied in the future.\ **Nonprogrammed decisions**: made in response to situations that are unique, are poorly defined and largely unstructured, and have important consequences for the organization. **Certainty:** situation in which all information the decision maker needs is fully available.\ ** Risk**: decision has clear-cut goals and good information is available, but future outcomes associated with each alternative are subject to chance of loss or failure.\ ** Uncertainty**: goals are known, but information about alternatives and future events is incomplete. **Ambiguity**: goals to be achieved or problems to be solved are unclear, alternatives are difficult to define, and information about outcomes is unavailable. **Classical model**: based on rational economic assumptions and manager beliefs about what ideal decision-making should be. **Administrative model**: use of a rational decision-making process within the limits of human and environmental factors **Descriptive:** how managers actually make decisions in complex situations. **Bounded rationality:** people have limits or boundaries on how rational they can be.\ ** Satisficing:** choosing the first solution that satisfies minimal decision criteria. **Coalition**: informal alliance among managers who support specific goal. **Intuition:** quick apprehension of decision situation based on experience but without conscious thought.\ **Quasirationality**: combining intuitive and analytical thought. **Escalating commitment**: continuing to invest time and money in a solution even when there is strong evidence that it is not appropriate.\ \ − **Postmortem, or after-action review:** disciplined procedure whereby managers invest time in reviewing the results of decisions on a regular basis and learn from them. − **Premortem**: purposefully imagining a decision has been implemented and has failed miserably, and then identifying reasons for the failure so that problematic issues can be addressed in advance. **Brainstorming**: uses a face-to-face interactive group to spontaneously suggest as many ideas as possible for solving a problem.\ **− Electronic brainstorming**: brings people together in an interactive group over a computer network.\ \ − **Evidence-based decision making**: a commitment to make more informed and intelligent decisions based on the best available facts and evidence. **− Confirmation bias**: occurs when a manager puts too much value on evidence that is consistent with a favored belief or viewpoint and discounts evidence that contradicts it. **Anchoring bias**: occurs when we allow initial impressions, statistics, and estimates to act as anchors to our subsequent thoughts and judgements. **Decision styles**: distinctions among people with respect to how they evaluate\ problems, generate alternatives, and make choices.\ − **Directive style**: prefer simple, clear-cut solutions to problems.\ − **Analytical** **style**: base decisions on all available rational data.\ − **Conceptual** **style**: use a broad amount of information to solve problems creatively.\ − **Behavioral** **style**: exhibit a deep concern regarding effect of decision on others. SUPPLY CHAIN CHAPTER **Supply** **chain**: The sequence of organizations---their facilities, functions, and activities---that are involved in producing and delivering a product or service. Also referred to as value chains.\ **Logistics**: The part of a supply chain involved with the forward and reverse flow of goods, services, cash, and information. **Supply Chain Management**: The strategic coordination of business functions within a business organization and throughout its supply chain for the purpose of integrating supply and demand management. Supply chain risks -demand risks (demand shortage) -supply risks (supply shortage) -operational risks **Risk management**: Involves identifying risks, assessing their likelihood of occurring and their potential impact and then developing strategies for addressing those risks. Strategies for addressing risk include:\ - Risk avoidance\ - Risk reduction\ -Risk sharing\ Key elements of successful risk management include:\ - Know your suppliers\ - Provide supply chain visibility\ - Develop event-response capability **Procurement**: The purchasing department is responsible for obtaining the materials, parts, and supplies, and services needed to produce a product or provide a service. **Strategic partnering:** Two or more business organizations that have complementary products or services join so that each may realize a strategic benefit. **Lot-size-inventory trade-off:** Large lot sizes yield benefits in terms of quantity discounts and lower annual setup costs, but they increase the amount of safety stock (and inventory carrying costs) carried by suppliers.\ **Inventory-transportation cost trade-off** : Suppliers prefer to ship full truckloads instead of partial loads to spread shipping costs over as many units as possible. This leads to greater holding costs for customers. **Lead time-transportation costs trade-off**: Suppliers like to ship in full loads, but waiting for sufficient orders and/or production to achieve a full load may increase lead time.\ **Product variety-inventory trade-off**: Greater product variety usually means smaller lot sizes and higher setup costs, as well as higher transportation and inventory management costs. **Cost-customer service trade-off**: Producing and shipping in large lots reduces costs, but increases lead time.