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GMS200 Final Exam.docx

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Department
Global Management Studies
Course
GMS 200
Professor
Deborah De Lange
Semester
Fall

Description
Chapter 1 Working Today Talent  People and their talent, what they know, what they learn, and what they do with it  Intellectual Capital: collective brainpower or shared knowledge of a workforce  Knowledge Worker: someone whose mind is a critical asset to employers Diversity  Workforce Diversity: describes differences among workers in gender, race, age, ethnicity, religion, sexual orientation, and able-bodiedness  Prejudice: display of negative attitudes toward members of diverse populations  Discrimination: actively denies minority members the full benefits of organizational membership  Glass Ceiling Effect: an invisible barrier limiting career advancement of women and minorities Globalization  Globalization: Worldwide interdependence of resource flows, product markets, and business competition Technology  We live and work in a technology-driven world, Ethics  Ethics: Set of moral standards of what is "good" and "right" in one's behaviour Careers  Portfolio worker: someone who always has the skills needed to readily shift jobs or careers. Organizations in the New Workplace What is an organization?  Organization: A collect of people working together to achieve a common purpose Organizations as systems  Open System: transform inputs from the environment into product outputs Organizational performance  Productivity: the quantity and quality of work performance, with resource utilization considered  Performance Effectiveness: an output measure of task or goal accomplishment  Performance Efficiency: an input measure of resource cost associated with goal accomplishment Changing nature of organizations  Change is a continuing theme in society, and organizations are certainly undergoing changes Organizational Environment Dynamic forces and the general environment  General Environment: composed of economic, legal-political, technological, socio-cultural, and natural environment conditions. SLENT environment o Socio-cultural - philosophy/objectives of political party running the government o Legal-political - norms, customs, social values o Economic- health of the economy o Natural environment - nature and conditions of environment  Sustainable business: firms that operate in ways that both meet the needs of customers and protect or advance the well-being of our natural environment. Business is “sustainable” in the sense that it minimizes our impact on the environment and helps preserve it for the benefit of future generations.  Sustainable innovation: the creation of new products and production methods that have lower environmental impacts than the available alternatives. Sustainable innovations are found in areas like energy use, water use, packaging, waste management and transportation practices, as well as in product development. o Technological - development and availability of technology Stakeholders and the specific environment  Specific Environment(Task Environment): includes the people and groups with whom an organization interacts  Stakeholders: persons, groups, and institutions directly affected by an organization  Value Creation: the creation of value for and satisfying needs of stakeholders Competitive advantage  Competitive Advantage: allows an organization to deal with market and environmental forces better than its competitors  Strategic Positioning: occurs when an organization does different things or the same things in different ways from its major competitors  Can be achieved through cost, quality, deliver, flexibility Environmental uncertainty  Environmental uncertainty: the lack of complete information regarding what exists and what developments may occur in the external environment. Organizational effectiveness  Organizational effectiveness: sustainable high performance in using resources to accomplish a mission Managers in the New Workplace What is a manager?  Manager: a person who supports, activates, and is responsible for the work of others Levels of managers  Top Managers: guide the performance of the organization as a whole or one of its major parts  Middle Managers: oversee the work of large departments or divisions  Team Leader: report to middle managers and supervise non-managerial workers Types of managers  Line Managers: directly contribute to producing the organization's goods or services  Staff Managers: use special technical expertise to advise and support line works  Functional Managers: responsible for one area such as finance, marketing, production, personnel, accounting, or sales  General Managers: responsible for complex, multifunctional units  Administrator: A manager in a public or non-profit organization Managerial performance  Accountability: the requirement to show performance results to a supervisor  Effective Manager: helps other achieve high performance and satisfaction at work  Quality of Work Life: the overall quality of human experiences in the workplace Changing nature of managerial work  Upside-Down Pyramid: operating works are at the top, serving customers, while managers are at the bottom supporting them The Management Process Functions of management  Management: the process of planning, organizing, leading, and controlling the use of resources to accomplish performance goals  Planning: process of setting objectives and determining what should be done to accomplish them  Organizing: process of assigning task, allocating resources, and coordinating work activities  Leading: process of arousing enthusiasm and inspiring efforts to achieve goals  Controlling: process of measuring performance and taking action to ensure desired results Managerial roles and activities  Interpersonal Roles: interaction with other people  Informational Roles: exchanges and processes information  Decisional Roles: decision making Managerial agendas and networks  Agenda Setting: develops action priorities for accomplishing goals and plans  Networking: process of creating positive relationships with people who can help advance agendas  Social Capital: capacity to get things done with support and help of others Essential managerial skills  Learning: a change in behaviour that results from experience  Lifelong Learning: continuous learning from daily experiences  Skill: ability to translate knowledge into action that results in desired performance  Technical Skill: ability to use expertise to perform a task with proficiency  Human Skill (Interpersonal Skill): ability to work well in cooperation with other people  Emotional Skill: ability to manage ourselves and our relationships effectively  Conceptual Skills: ability to think analytically to diagnose and solve complex problems Developing managerial competencies  Managerial Competency: is a skill-based capability for high performance in a management job  Communication, teamwork, self-management, leadership, critical thinking, professionalism Chapter 2 Classical Management Approaches Scientific management  Taylor - Scientific management which emphasizes careful selection and training of workers and supervisory support. He advocated the following four principles of scientific management 1. Develop for every job a “science” that includes rules of motion, standardized work implements, and proper working conditions 2. Carefully select working with the right abilities for the job 3. Carefully train workers to do the job and give them the proper incentives to cooperate with the job “science” 4. Support workers by carefully planning their work and by smoothing the way as they go about their job  Motion Study - is the science of reducing a task to its basic physical motions Administrative principles  Fayol introduced the following key principles of manage (among others): o Scalar chain principle – there should be a clear and unbroken line of communication from the top to the bottom of the organization o Unity of command principle – each person should receive orders from only one boss o Unity of direction principle – one person should be in charge of all activities that have the same performance objectives Bureaucratic organization  Max Weber – bureaucracy promotes efficiency and fairness o Bureaucracy is an ideal, intentionally rational, and very efficient form of organization founded on principles of logic, order, and legitimate authority o Characteristics – clear division of labour, clear hierarchy of authority, formal written rules and procedures, impersonality: no one receives preferential treatment, careers based on merit o Disadvantages – Excessive paperwork “red tape”, slowness in handling problems, rigidity in the face of shifting customer or client needs, resistance to change, employee apathy  Bureaucracy - a rational and efficient form of organization founded on logic, order, and legitimate authority. Behavioral Management Approaches Human resource approaches - assumption: people are social and self-actualizing Follett's organizations as communities  Managers and workers should labour in harmony, without one party dominating the other and with the freedom to talk over and truly reconcile conflicts and differences The Hawthrone studies  Hawthorne effect: was identified as a tendency of people who are singled out for special attention to perform as anticipated merely because of expectations created by the situation  People’s feelings, attitudes, and relationships with co-workers influence their performance  Human relations movement: based on the viewpoint that managers who used good human relations in the workplace would achieve productivity.  Organizational behaviour: the study of individuals and groups in organizations. Maslow's theory of human needs  Managers need to help workers satisfy their important needs at work to achieve productivity  A need is physiological or psychological deficiency that a person feels compelled to satisfy  Needs from lowest to highest: physiological, safety, social, esteem, self-actualization McGregor's Theory X and Theory Y  Theory X managers assume that subordinate: dislike work, lack ambition, are irresponsible, resist change, prefer to be led rather than to lead  Prophecy: x managers create situations where workers become dependent and reluctant  Theory Y managers assume that subordinates are: willing to work, capable of self-control, willing to accept responsibility, imaginative and creative, capable of self-direction  Prophecy: y managers create situations where workers respond with initiative and high performance  Self-fulfilling prophecies: occurs when a person acts in ways that confirm another’s expectations. Argyri's theory of adult personality  Classical management principles are inconsistent with the mature adult personality Modern Management Foundations Quantitative analysis and tools  Management science: uses quantitative analysis and applied mathematics to solve problems. This is also known as operations research.  Operations research: uses quantitative analysis and applied mathematics to solve problems. This is also known as management science.  Operations management: the study of how organizations produce goods and services. Organizations as systems  System: A collection of interrelated parts working together for a purpose.  Subsystem: a smaller component of a larger system.  Open system: interacts with its environment and transforms resource inputs into outputs. Contingency thinking  Contingency thinking: attempts to match management practices with situational demands. Quality management  Total quality management: is managing with an organization-wide commitment to continuous improvement, product quality, and customer needs.  Continuous improvement: a process of always looking for new ways to improve work quality and performance.  ISO certification: indicates conformance with a rigorous set of international quality standards. Knowledge management and organization learning  Knowledge management: the process of using intellectual capital for competitive advantage.  Learning organization: an organization that continuously changes and improves, using the lessons of experience. Evidence-based management  High performance organization: consistently achieves excellence while creating a high-quality work environment.  Evidence-based management: involves making decisions based on hard facts about what really works. Chapter 3 Management and Globalization  Global economy: an economic perspective based on worldwide interdependence of resource supplies, product markets, and business competition.  Globalization: the process of growing interdependence among the components of the global economy. Global management  Global management: involves managing operations in more than one country.  Global manager: a manager who is informed about international developments, transnational in outlook, competent in working with people from other cultures, and always aware of regional developments in a changing world. Why companies go global  Profits, customers, suppliers, capital, labour How companies go global  Global business: conducts commercial transactions across national boundaries.  Global sourcing: a form of international business that involves purchasing materials, manufacturing components, or business services from around the world.  Exporting: selling locally made products in foreign markets.  Importing: buying foreign-made products and selling them in domestic markets.  Licensing agreement: a form of international business that occurs when a foreign firm pays a fee for the rights to make or sell another company’s products in a specified region.  Franchising: a form of licensing in which a foreign firm buys the rights to use another’s name and operating methods in its home country.  Foreign direct investment: involves buying all, or buying part of a business in another country.  Insourcing: describes job creation through foreign direct investment.  Joint ventures: a form of international business that establishes business operations in a foreign country through co-ownership arrangements that pool resources and share risks and control.  Global strategic alliance: a partnership in which foreign and domestic firms share resources and knowledge for mutual gains.  Foreign subsidiary: a local operation completely owned and controlled by a foreign firm.  Greenfield investment: the building of an entirely new operation in a foreign country. Global business environments  Political risk: the potential loss in value of a foreign investment due to instability and political changes in the host country.  Political risk analysis: attempts to forecast political disruptions that can threaten the value of a foreign investment.  World Trade Organization: an international organization that monitors international trade and tries to resolve disputes among countries about tariffs and trade restrictions. 153  Most favoured nation status: gives a trading partner most favourable treatment for imports and exports.  Tariffs: taxes governments levy on imports from abroad.  Protectionism: government legislation and support to protect domestic industries from foreign competition.  NAFTA: a trade agreement that links Canada, Mexico, and the United States in a regional economic alliance.  European Union: a political and economic alliance of European countries that have agree to support mutual economic growth by removing barriers that previously limited cross-border trade and business development.  Euro: the common currency used in the European Union. Global Businesses  Global Corporation: a multinational business with extensive operations in more than one country. Also known as an MNC. Types of global businesses  Transnational: a MNC that operates worldwide without being identified with one national home. Pros and cons of global corporations  Host-country Issues re: MNCs enter other countries to do business there o Problems: excessive profits, economic domination, interference with government, hire best local talent, limited technology transfer, and disrespect for local customs o Benefits: larger tax bases, increased employment opportunities, technology transfer, the introduction of new industries, and the development of local resources  Home-county Issues re: MNCs o MNCs have traditionally come from developed countries and sometimes they have problems in LDCs o MNCs complaints about host countries: profit limitations, overpriced resources, exploitative rules, foreign exchange restrictions, failure to uphold contracts Ethics challenges for global managers  Corruption: engaging in illegal practices to further one’s business interests.  Child labour: the full-time employment of children for work otherwise done by adults.  Sweatshops: business operations that employ workers at low wages for long hours and in poor working conditions.  Sustainable development: refers to development that meets the needs of the present without compromising the ability of future generations to meet their own needs. Culture and Global Diversity Cultural intelligence  Culture: a shared set of beliefs, values, and patterns of behaviour common to a group of people.  Culture shock: the confusion and discomfort a person experiences when in an unfamiliar culture.  Ethnocentrism: managers believe that the best approaches are always found in the home country. Consider ones culture superior to others  Cultural intelligence: is the ability to accept and adapt to new cultures Silent languages of culture  Low-context culture: a culture in which most communication takes place via the written or spoken word.  High-context culture: a culture where much communication takes place through nonverbal and situational cues in addition to the written or spoken word.  Monochronic cultures: cultures in which people tend to do one thing at a time.  Polychronic cultures: cultures in which time is used to accomplish many different things at once.  Proxemics: how people use space to communicate. Values and national cultures  Ecological fallacy: assumes that a generalized cultural value applies equally well to all members of the culture.  Power distance: the degree to which a society accepts unequal distribution of power.  Individualism – collectivism: the degree to which a society emphasizes individuals and their self- interests.  Uncertainty avoidance: the degree to which a society tolerates risk and uncertainty.  Masculinity-femininity: the degree to which a society values assertiveness and materialism.  Time orientation: the degree to which a society emphasizes short-term or long-term goals. Global Management Learning Global management attitudes and learning  Comparative management: the study of how management systematically differs among countries and/or cultures.  Ethnocentric attitudes: manager beliefs that the best approaches of management are found at home and find little to learn from their international counterparts.  Polycentric attitude: a belief that respects local knowledge and allows foreign operations to run with substantial freedom.  Geocentric attitude: management beliefs that are high in cultural intelligence and take a collaborative approach to global management practices. Chapter 5 The Nature of Entrepreneurship Who are the Entrepreneurs?  Entrepreneur: a risk-taking individual who takes action to pursue opportunities and situations others may fail to recognize as such or may even view as threats  Entrepreneurship: describes strategic thinking and risk-taking behaviour that results in the creation of new opportunities Characteristics of entrepreneurs 1. Internal locus of control - believe that they control their own destiny; they are self-directing and like autonomy 2. High energy level - persistent, hard working, and willing to exert extraordinary efforts to succeed 3. High need for achievement - are motivated to act individually to accomplish challenging goals; they thrive on performance feedback 4. Tolerance for ambiguity - are risk takers; tolerate situations with high degrees of uncertainty 5. Self-confidence - feel competent, believe in themselves, and are willing to make decisions 6. Passion and action-orientation - try to act ahead of problems; they want to get things done and not waste valuable time 7. Self-reliance and desire for independence - want independence; they are self-reliant; they want to be their own boss, not work for others 8. Flexibility - are willing to admit problems and errors, and to change a course of action when plans are not working Diversity and entrepreneurship Necessity-based entrepreneurship: takes place because other employment options don’t exist Entrepreneurship and Small Business How to get started  Small business: commonly defined as one with 100 or fewer employees, that is independently owned and operated, and that does not dominate its industry  Franchise: a business owner sells to another person the right to operate the same business in another location, under the original owner’s business name and guidance Internet entrepreneurship  Saves the cost of renting retail space and hiring store employees Family businesses  Family business: a business that is owned and financially controlled by family members  Family business feud: occurs when family members have major disagreements over how the business should be run  Succession problem: involves transferring leadership from one generation to the next  Succession plan: a formal statement that describes how the leadership transition and related financial matters will be handled when the time for changeover arrives Why many small businesses fail 1. Lack of experience - not having sufficient know-how to run a business in the chosen market 2. Lack of expertise - not having expertise in the essentials of business operations, finance, purchasing, selling, production 3. Lack of strategy and strategic leadership - not taking the time to craft a vision and mission, nor to formulate and properly implement a strategy 4. Poor financial control - not keeping track of numbers, and failure to control business finances 5. Growing too fast - not taking time to consolidate a position, fine-tune the organization 6. Insufficient commitment - not devoting enough time to meet the requirements of the business 7. Ethical failure - falling prey to the temptations of fraud, deception, and embezzlement New Venture Creation  First-mover advantage: exploiting a market niche or entering a market before competitors Life cycles of entrepreneurial firms  Birth Stage o Establish the firm, getting customers, finding the money, fight for existence and survival  Breakthrough Stage o Work on finances, become profitable, growing, coping with growth and takeoff  Maturity Stage o Refine the strategy, continue growth, manage for success, invest wisely and stay flexible Writing the business plan  Business plan: a plan that describes all the details necessary to set the direction for a new business and to obtain the necessary financing to operate it Choosing the form of ownership  Sole proprietorship: an individual or a married couple pursing business for a profit  Partnership: formed when two or more people agree to contribute resources to start and operate a business together  Corporation: a legal entity that exists separate from its owners  Limited Liability Corporation: a hybrid legal form of business combining advantages of a sole proprietorship or a partnership with the liability advantages of a corporation Financing the new venture  Debt financing: involves going into debt by borrowing money from another person, a bank, or financial institution and repaying it over time with interest  Equity financing: involves exchanging ownership shares in the business to outsiders in return for outside investment monies  Venture capitalists: companies that pool capital and make investments in new ventures in return for an equity stake in the business  Initial Public Offering (IPO): an initial selling of shares of stock to the public at large  Angel investor: a wealthy individual who is willing to invest a portion of this wealth in return for equity in a new venture Chapter 6 Why and How Mangers Plan Importance of planning  Planning: the process of setting objectives and determining how best to accomplish them.  Planning sets the stage for organizing, leading, and controlling by providing directions The planning process  Plan: a statement of action steps to be taken in order to accomplish the objectives.  Objectives: the specific results or desired end states that one intends to achieve. 1. Define your objectives – where you want to go 2. Determine where you stand vis-a-vis objectives – where you stand, strengths and weaknesses 3. Develop premises regarding future conditions – anticipate future events 4. Analyze alternatives and make a plan – list and evaluate the possible actions, choose the alternative most likely to accomplish your objectives 5. Implement the plan and evaluate results – take action and carefully measure your progress toward objectives Benefits of planning  Complacency trap: is being carried along by the flow of events. Types of Plans Used by Managers Long-range and short-range plans  Long range 3+ years and medium range 1-2 years and short range <1 year Strategic and tactical plans  Strategic plan: sets broad, comprehensive, and longer-term action directions for the entire organization.  Tactical plan: helps to implement all or parts of a strategic plan.  Vision: clarifies the purpose of the organization and expresses what it hopes to be in the future  Functional plans: indicate how different operations within the organization will help advance the overall strategy. Production, financial, facilities, logistics, marketing, human resources Operational plans  Operational plan: define what needs to be done in specific areas to implement strategic plans. Short term. Standing plans and single-use plans  Policy: a standing plan that communicates broad guidelines for making decisions and taking action in specific circumstances.  Procedures(rules): standing plans that describe exactly what actions are to be taken in specific situations.  Budget: a single-use plan that commits resources to activities, projects, or programs.  Zero-based budget: a budget that allocates resources to projects or activities as if they were brand new in each budget cycle. Ongoing and newly proposed programs are forced to compete on an equal footing for funding. Planning Tools and Techniques Forecasting  Forecasting: the process of making assumptions about what will happen in the future.  Qualitative forecasting – uses expert opinion to predict the future  Quantitative forecasting – techniques use mathematical and statistical analyses of historical data and surveys to predict future events Contingency planning  Contingency planning: identifies alternative courses of action that can be implemented to meet the needs of changing circumstances. Scenario planning  Scenario planning: a long-term version of contingency planning which involves identifying several alternative future scenarios or states of affairs that may occur, and then making plans to deal with each should it actually occur. Benchmarking  Benchmarking: using external comparisons to better evaluate current performance and identify possible actions for the future.  Best practices: a benchmarking technique that involves identifying those things that help both competitors and noncompetitors achieve superior performance. Use of staff planners  Coordinate the planning function of the organization or a component. One risk is a communication gap between planner and managers Implementing Plans to Achieve Results Goal setting and goal alignment  SMART Goals o Specific – clearly target key results and outcomes to be accomplished o Measurable – described so results can be measured without ambiguity o Attainable – challenging, including a stretch factor that moves toward real gains, yet, realistic and possible to achieve o Referred to – goals need to be referred to regularly to keep people focused on the task at hand o Timely – linked to specific timetables and due dates  Hierarchy of objectives: a means-ends chain in which lower-level objectives (the means) lead to the accomplishment of higher-level objectives (the ends).  Objectives: the specific results or desired end states that one intends to achieve. Management by objectives  Management by objectives (MBO): a structured process of regular communication in which a supervisor/team leader and subordinates/team members jointly set performance objectives and review results accomplished.  Improvement objectives: describe intentions for specific performance improvements.  Personal development objectives: describe intentions for personal growth through knowledge and skills development.  Advantages – focuses workers on the most important task and objectives, focuses supervisors on areas of support, agreed-upon objectives, contributes to relationship building  Actions to avoid in using MBO – tying MBO to pay, focus on easy objectives, excessive paper work, supervisor tell subordinates their objectives Participation and involvement  Participatory planning: requires that the planning process include people who will be affected by the resulting plans and/or will be asked to help implement them.  Planning makes organizations more: o Results oriented – creating a performance oriented sense of direction o Priority oriented – making sure the most important things get first attention o Advantage oriented – ensuring that all resources are utilized to best advantage o Change oriented – anticipating problems and opportunities so they can be best dealt with Chapter 7 Strategic Management Competitive advantage  Competitive advantage: operating with an attribute or set of attributes that allows an organization to outperform its rivals o Sources include cost, quality, knowledge, speed, barriers to entry, and financial resources  Sustainable competitive advantage: the ability to outperform rivals in ways that are difficult or costly to imitate Strategy and strategic intent  Strategy: a comprehensive action plan that identifies long-term direction for an organization and guides resource utilization to accomplish goals with sustainable competitive advantage  Strategic intent: having all organizational energies directed toward a unifying and compelling target or goal Levels of strategy 1. Corporate strategy: a strategy that directs the organization as a whole toward sustainable competitive advantage 2. Business strategy: a strategy that sets the strategic direction for a single business unit or product line 3. Functional strategy: a strategy that guides the use of resources to implement business strategy; this level of strategy focuses on activities within a specific functional area of operations The strategic management process  Strategic management: the process of formulating and implementing strategi
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