Business Courses Review
Business Courses Review
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in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
1.1 Management in Organizations
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2–3
2.4 An Integrative Framework of Management Perspectives
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3.1 The Organization and Its Environments
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3.2 McDonald’s General Environment
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in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
3.3 McDonald’s Task Environment
McDonald’s
Competitors• Burger King• Wendy’s• Subway• Dairy Queen
Customers• Individual
consumers• Institutional
customers
Suppliers• Coca-Cola• Wholesale food
processors• Packaging
manufacturers
Strategic Partners• Wal-Mart• Disney• Foreign partners
Regulators• Food and Drug
Administration• Securities and
ExchangeCommission
• EnvironmentalProtectionAgency
Internal environment
Task environment
Porter’s Five Competitive Forces• Threat of new entrants
– Extent to and ease with which competitors can enter market.
• Competitive rivalry– The nature of the competitive relationship between firms in an industry.
• Threat of substitute products– Extent to which alternative products/services may replace the need for
existing products/services.
• Power of buyers– Extent to which buyers influence the suppliers of goods and services.
• Power of suppliers– Extent to which suppliers have the ability to influence buyers of their
goods and services.
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3–7
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in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
4.5 Approaches to Social Responsibility
Social Responsibility Approaches• Obstructionist Stance
– Do as little as possible (ex. – PCA). • Defensive Stance
– Do only what is legally required and nothing more (ex. – tobacco companies).
• Accommodative Stance– Meet legal and ethical obligations and go beyond that in selected
cases.• Proactive Stance
– Organization views itself as a citizen and proactively seeks opportunities to contribute to society (ex. – McDonald’s).
4–9
4–10
4.4 Arguments for and Against Social Responsibility
4–11
4.6 How Business and the Government Influence Each Other
The Meaning of International Business
• Domestic Business– acquires all of its resources and sells all of its products or services
within a single country.
• International Business– is based in a single country yet acquires a meaningful share of its
resources and/or revenues from other countries.
• Multinational Business– transcends national boundaries and buys raw materials, borrows
money, and manufactures and sells its products in a world-wide marketplace.
• Global Business– transcends national boundaries and is not committed to a single home
country.
5–12
Managing the Process of Globalization
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5–13
• Importing and Exporting Exporting – creating a product in the firm’s domestic marketplace
and selling the same product internationally. Importing – bringing a product created in another country into the
firm’s domestic marketplace.
• Licensing A contractual arrangement where a firm allows another firm to use its
brand name, trademark, technology, patents, copyrights, or other assets in return for royalties (fees).
Managing the Process of Globalization
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5–14
• Strategic Alliance – where two or more firms jointly cooperate for mutual gain Joint Venture – a type of strategic alliance where the firms share
ownership of a new enterprise.
• Direct Investment – where a firm headquartered in one country builds or purchases facilities or subsidiaries in another country. Maquiladoras – light assembly plants built in Mexico near the U.S.
border – owned by major corporations, exploit tax breaks given by the Mexican government to employ workers at low wages to encourage foreign direct investment.
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5–15
5.4aIndividual Differences Across Cultures
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5–16
5.4b Individual Differences Across Cultures
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5–17
5.4c Individual Differences Across Cultures
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7–18
7.1 The Planning Process
Kinds of Organizational Plans (Con’t)• Strategic Plans – general plans outlining decisions
of resource allocation, priorities, and action steps necessary to reach strategic goals
• Tactical Plans – tactical plans provide an outline for how to accomplish objectives, rather than deciding what need to be done
• Operational Plans – detail how specific task are to be accomplished
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in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Strategic Alternatives
Business-level strategy
Functional-level strategy
Operations-level strategy
Corporate-level strategy
Business-level strategy
Functional-level strategy
Operations-level strategy
Market A Market B
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8–20
Types of Strategic Alternatives
• Corporate-Level Strategy– The set of strategic alternatives that an
organization chooses from as it manages its operations simultaneously across several industries and several markets.
• Business-Level Strategy– The set of strategic alternatives that an
organization chooses from as it conducts business in a particular industry or a particular market.
© 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
8–21
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8–22
8.1 SWOT Analysis
SWOT Analysis and Strategy• Evaluating Organizational Strengths
– Organizational strengths• are skills and abilities enabling an organization to conceive of and implement
strategies.– Competitive parity exists when a large number of competing firms are able to
implement the same strategy
– Common organizational strengths• are organizational capabilities possessed by numerous competing firms.
– Distinctive competencies• are unique to one firm or a small subset of competitors, are useful for competitive
advantage and superior performance.
– Imitation of distinctive competencies• Strategic imitation is the process of duplicating another firm’s distinctive
competencies
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8–23
SWOT Analysis and Strategy (cont’d)• Evaluating Organizational Strengths (cont’d)
– Sustained competitive advantage• occurs when a distinctive competence cannot be easily
duplicated.• is what remains after all attempts at strategic imitations cease.
– Strategic imitation of a distinctive competence is difficult when:
• The competitive advantage is based on unique historical circumstances.
• it is difficult for competitors to understand its nature or character.
• The competitive advantage is based on a complex phenomenon (e.g., organizational culture).© 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated,
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8–24
SWOT Analysis and Strategy (cont’d)
• Evaluating Organizational Weaknesses– Organizational weaknesses
• Skills and capabilities that do not enable an organization to choose and implement strategies that support its mission.
– Weaknesses can be overcome by:• investments to obtain the strengths needed.• modification of the organization’s mission so it can be
accomplished with the current workforce.
– Competitive disadvantage• occurs when an organization fails to implement strategies
being implemented by competitors.© 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated,
in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
8–25
SWOT Analysis and Strategy (cont’d)
• Evaluating an Organization’s Opportunities and Threats– Organizational opportunities
• are areas in the organization’s environment that may generate high performance.
– Organizational threats• are areas in the organization’s environment that make it
difficult for the organization to achieve high performance.
– Opportunities and threats can be evaluated using Porter’s Five Forces model
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8–26
Formulating Business-Level Strategies
• Porter’s Generic Strategies– Differentiation strategy
• An organization seeks to distinguish itself from competitors through the quality of its products or services.
– Overall cost leadership strategy• An organization attempts to gain competitive advantage by
reducing its costs below the costs of competing firms.
– Focus strategy• An organization concentrates on a specific regional market,
product line, or group of buyers.
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8–27
Implementing Porter’s Generic Strategies
• Differentiation– Marketing and sales emphasize high-quality, high-value image of the
organization’s products or services.
• Overall Cost Leadership– Marketing and sales focus on simple product attributes and how these
product attributes meet customer needs in a low-cost and effective manner.
• Focus– Either differentiation or cost leadership, depending on which one is
the proper basis for competing in or for a specific market segment, product category, or group buyers.
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8–28
Strategy Type Definition Examples
Prospector Is innovative and growth oriented, searches for new markets and new growth opportunities, encourages risk taking
Amazon.com3MRubbermaid
Defender Protects current markets, maintains stable growth, serves current customers
BICeBayMrs. Fields
Analyzer Maintains current markets and current customer satisfaction with moderate emphasis on innovation
DuPontIBMYahoo!
Reactor No clear strategy, reacts to changes in the environment, drifts with events
International Harvester(now doing business as Navistar)Joseph Schlitz Brewing Co.KmartMontgomery Ward(no longer in business)
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8–29
8.2 The Miles and Snow Typology
Introduction MaturityGrowth
Time
Decline
Sale
s Vo
lum
eStagesHigh
Low
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8–30
8.2 The Product Life Cycle
Corporate-Level Strategies
Related diversification
(synergy)
Unrelated diversification(risk/return)
Single-product strategy
(simplicity)
Strategic Choices
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8–31
Becoming a Diversified Firm
Development of new products Vertical integration Merger with
another firmAcquisition of another firm
Diversification Alternatives
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8–32
Emphasizing Distinctive Competencies
• Identifying Niches in Established Markets– Niches represent a market segment currently
unexploited in a market where several large firms compete.
– Niches offer a competitive advantage to small businesses.
• Identifying New Markets– Using the transfer of an existing product/service to
explore a new market.– Creating new industries/products/services.
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10–33
First Mover Advantages
• First-Mover Advantage– Exploiting an opportunity before any other firm
does.• Why first-mover advantage is not taken by
larger firms:– Decisions are slowed by organizational hierarchy.– Size of the assets at risk makes large firms overly
cautious.
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10–34
Structure of Entrepreneurial Organizations
• Starting the New Business– Buying an Existing Business
• Business has a proven ability to draw customers and make a profit (the business is a going concern).
• Networks (e.g., customers and suppliers) are established.
• Negative: New owners inherit any existing problems.
– Starting from Scratch• Avoids problems associated with previous owners.
• Freedom to choose suppliers, equipment, location, and workers.
• Negative: More business risk and uncertainty.© 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated,
in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
10–35
Franchising (cont’d)
• Disadvantages– Start-up fees to purchase franchise.– Limitations of franchise (market area, product,
customers).– Loss of independence due to imposed operational
controls of franchiser.
• Advantages– Reduced financial risk of new business success
through experience provided by franchiser.– Training, financial, and management support by
franchiser.
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10–36
Enforcing The Law
•Title VII•The Civil Rights Act•The Equal Pay Act•Age Discrimination Act•Americans with Disabilities Act
Executive Order 11246
EEO laws
The EEOC
Office of Federal Contract Compliance
Federal Courts
3-37
State Courts and Human Rights Agencies
May be required first step for filing Federal claims, also violations of state laws
The Vocabulary of Job Analysis
• Job specification: a written explanation of the knowledge, skills, abilities, traits, and other characteristics (KSAOs) necessary for effective performance on a given job
• Tasks: Coordinated and aggregated series of work elements used to produce an output
• Position: the responsibilities and duties performed by an individual. There are as many positions in an organization as there are employees
• Job: group of positions that are similar in their duties, such as computer programmer
• Job family: group of jobs that have similar duties
6-38
Work-Family Balance and Job Design
Work-family tension is driven by changing
workforce demographics
Work-family tension is driven by changing
workforce demographics
1. Women and single parents entering the workforce
2. Dual-career couples
3. The aging population
1. Women and single parents entering the workforce
2. Dual-career couples
3. The aging population
Some organizations meet employees’ needs
through flexible work arrangements
Some organizations meet employees’ needs
through flexible work arrangements
1. Job sharing
2. Flextime
3. Telecommuting
1. Job sharing
2. Flextime
3. Telecommuting
6-39
Work-Family Balance and Job Design
• The success of job sharing depends on: – Identifying jobs that can be shared – Understanding employees’ individual sharing style – Matching “partners” who have complementary
scheduling needs and skills
• With flextime, employees can choose when to be at the office– 5 days/8 hours – 4 days/10 hours – Arrive later on Monday, leave earlier on Friday
6-40
Work-Family Balance and Job Design
Telecommuting allows employees to work at home part- or full-time – Communication is through phone, fax,
computer – Often resisted by managers who fear
loss of control and subordinate accessibility
6-41
Fixed and Variable Costs
• Fixed costs – incurred regardless of volume of product produced
• Variable costs – costs incurred depend upon the number of units produced
Fixed and Variable Costs
Fixed Costs $20,000Variable Costs $500 per unitSelling Price $1,000 per unit
Units Sold 0 10 20 30 40 50 60 70 80 90 100 110 120
Revenues $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 $100,000 $110,000 $120,000Fixed Costs $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000Variable Costs $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 $50,000 $55,000 $60,000Profit -$20,000 -$15,000 -$10,000 -$5,000 $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000
Fixed and Variable Costs
1 2 3 4 5 6 7 8 9 10 11 12 13
-$40,000
-$20,000
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
RevenuesFixed CostsVariable CostsProfit