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Global Managment Notes.docx

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Ryerson University
Global Management Studies
GMS 200
Shavin Malhotra

Chapter 1 Technology -Increasing demand for knowledge workers with the skills to fully use technology -Wal-Mart: global leader of information technology innovation In 1983 Wal-Mart began to use bar codes and in 2005 they started using radio frequency identification tags because it was more efficient since they don’t have to scan physically Wal-Mart can reduce costs and can benefit and grow as a company because of technology  Ethical expectations for modern businesses  Wal-Mart’s Mexico Bribery Scandal Study question 1: What are the challenges of working in the new economy?  Careers -Core workers, contract workers, and part- time workers * a lot of jobs offer flexibility, for instance for some companies they let you work at home, or Google gives their employees a lot of freedom they let you dress however you like, give you your own room, massages, cafeterias etc Organizations as open systems An open system interacts with the external environment in a continual process of transforming resource inputs into product outputs in the form of finished goods and/or services. The environment supplies The organization creates The environment consumes Resource inputs Work Product outputs People activities turn resources into outputs Finished goods and/or services Money transformation process Materials Technology Information Customer and client feedback Study Question 2: What are organizations like in the new workplace?  Organizational performance -Performance effectiveness - Output -Performance efficiency -Input *How do companies measure productivity, by keeping track of output and input Productivity and dimensions of organization performance H Effective but not efficient Effective and efficient i -Goals achieved -Goals achieved g -Resources wasted -no wasted resources h High productivity L Neirther effective nore effiecent Efficient but not effective o -Goals not achieved -no wasted resources w -Resources wasted -Goals not achieved Low High  Manager: -Someone who directly supports and helps activate the work efforts and performance accomplishments of other  High performing managers -are well informed of their team’s needs -Help their people perform to the best of their abilities Typical Bussiness Board of Directors Chief executive Officer President Vice President Robert Katz’s Essential Managerial Skills Lower-level Middle-level Top-level Managers Managers Managers Conceptual Skills- The ability to think analytically and achieve integrative problem solving Human skills- The ability to work well in cooperation with other persons Technical skills- The ability to apply expertise and perform a special task with proficiency Study question 5: What is the management process and how do you learn magerical skills and competencies?  Competencies for managerial success: -Communication -Teamwork -Self-management -Leadership -Critical thinking -Professionalism A well-known business executive goes to jail for not revealing a personal financial interest in a project that will significantly benefit company profits. This executive’s action is an example of__________. 1. Dishonesty 2. Corporate social responsibility 3. Opportunistic behaviour 4. Violating managerial ethics ** 5. Adhering to company policies Chapter 13: Information and Decision Making How do companies store information? Information management a generation ago -Information was stored in filing cabinets not hard drives -No desktop or PC, no word processing, no email, no voice mail,… *Wal-Mart uses a satellites system to send information to headquarters In 1965, Gordon Moore, Intel’s co-founder, predicts that computer-processing power would double and its cost would drop by 50% about every two years Today, computer hardware and software are ant integral part of managing business information  Information and knowledge -The productivity of knowledge and knowledge workers depends on computer and information competency -Date: ^Raw facts and observations -Information ^Data made useful for decision making Intelligence information- gathered from stakeholders and external environment Internal information- flows up, down around, and across organizations Public information- Disseminated to stakeholders and external environment Strategic importance of information Companies such as Wal-Mart use information to attract more customers and be more efficient How does Facebook make money? - As of September 2012, Facebook has over 1 billion active users - Advertising is the main source of Facebook’s revenue - “Social marketing” is much more fined-grained and effective way of targeting potential customers than relying on the traditional demographics approach  Managerial advantages of IT utilization: -Planning advantages Better and more timely access to useful information With IT companies gather information and respond by changing something in the company -Organizing advantages More ongoing and informed communication among all parts of organization -Leading advantages Improved communication with staff and stakeholders -Controlling advantages More immediate measures of performance results E.g, Wal-Mart “open the box”  Performance deficiency Getting less than your preferred performance for instance getting a B instead of a A grade  Performance opportunity Doing better than your preferred mark getting a A instead of a B grade  Problem solving -The process of identifying a discrepancy between actual and desired performance and taking action to resolve it  A decision -A choice among possible alternative course of acition Study question 2: How do managers use information to make decisions?  Problem-solving approaches or styles: -Problem avoiders -Problem solvers -Problem seekers Three environments for managerial decision making and problem solving Certain Environment Risk of failure: Low Type of decision: Programmed Alternative courses of action and their outcomes are known to decision maker Risk environment Decision maker views alternatives and their outcomes in terms of probabilities Uncertain environment Risk of failure: High Type of decision: Non programmed Decision makers doesn’t know all alternatives and outcomes even as probalitices  Crisis decision making: -An unexpected problem that can lead to disaster if it’s not resolved quickly and appropriately.  Systematic versus intuitive thinking -Systematic thinking: rational, step-by-step, and analytical Follow logic, do homework -Intuitive thinking: flexible and spontaneous Personal judgment -Managers should use intuitive thinking in high uncertainty situations -Multidimensional thinking Using all the information you have, using both systematic and intuitive thinking Difference between Classical and Behavioural model Classical Model Behavioural Model -Structured problem - Unstructured problem -Clearly defined -Not clearly defined -Certain environment -Uncertain environment -Complete information -Incomplete information -All alternatives and -Not all alternatives and consequcnes known consequences known Optimizing Decision Satisfying Decision Choose absolute best among Alternatives Steps in managerial decision making and problem solving Step 1: Find and define problem Step 2: Generate and evaluate alternative solutions Step 3: Make decision and conduct ethics double-check Step 4: Implement the decisions Step 5: Evaluate results Case: Ajax  Background information Ajac had decided to close its plant because of poor market conditions. A buyer could not be found  Step 1: identify and define the problem -How to minimize the adverse impact of the plant closing on the employees, their families, and the community?  Step 2: generate and evaluate possible solutions 1. Simply close the plant on schedule 2. Delaying the plant closing until all efforts have been made to sell it to another firm 3. Closing the plant and offering transfers to other Ajax plants 4. Closing the plant, offering some transfers, and helping employees find new jobs  Step 3: choose a preferred course of action and conduct the “ethics double check” -Ajax’s management selected the fifth option beause they thought it wasmost consistant > Step 4: implement the decision -Ajax ran an ad in the local newspaper for 15 days at a cost of $2600 informing local employers the skills and availability of the firm’s employees > Step 5: Evaluate results. - A substantial number of Ajax’s employees were able to relocate in new jobs in the area.  Simplifying decision making -Availability heuristic -Representativeness heuristic -Anchoring and adjustment heuristic Source of potential decision-making error  Framing Error -A problem is evaluated and resolved in the context in which it is perceived  Confirmation Error -We notice, accept, and even seek out information that is confirming or consistent with a decision we have just made  Escalating commitment  Global Business  Reasons why businesses go global: - Profits - Customers - Suppliers - Capital - Labour Mcdonald’s and KFC in China -In China, with KFC as its flagship chain, Yum! Has 40% of the market share for fast-food chains. Mcdonalds has 16% in shares Types of market entry strategies: -Global Sourcing The process of purchasing materials or services around the world for local use (companies involvement is low) Exporting and importing Cons: don’t get any feedback on how your product did Licensing agreement -One firm pays fee for rights to make or sell another company’s products (eg. Coca-Cola bottlers) Franchising -A fee is paid for rights to use another’s firm’s name and operating methods (e.g KFC) Types of direct investment strategies: Joint ventures -operates in a foreign country through co-ownership by foreign and local partners Global strategic alliances (HP and Microsoft) Foreign subsidiaries -Local operation completely owned by a foreign firm >Complications in global business environment Political Risk -Local legal systems -World Trade Organization -Protectionism -The political call for tariffs and favourable treatment to help shelter domestic businesses from foreign competition Regional Economic Alliances North American Free Trade Agreement (NAF
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