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GMS Notes - Final Exam

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Ryerson University
Global Management Studies
GMS 200
Jian Guan

Chapter 1 Competitive Advantage • When an organization is extremely well at to something, better than its competitors. • 4 ways to achieve: o Price – make production cheaper o Quality – make quality better o Delivery – deliver faster o Flexibility – better suit for customer Environmental Uncertainty • Lack of full info about environment • 2 factors affecting it: o Rate of change (of factors) o Complexity (# of factors) Organizational Effectiveness • Sustainable high performance of using resources to complete goals • 4 ways to achieve it: o Systems resource approach – looks at the input/getting material o Internal process approach – looks at processing/efficiency of resource use o Goal resource approach – looks at output o Strategic constituencies – looks at stakeholder impact Manager • Supports, activates and responsible for the work of others • 3 levels of managers: o Top – manage performance of organization as a whole (ex. CEO, Vice-president, and president) o Middle – manage regional areas/departments (ex. Clinic directors, deans, plant managers) o Team Leader – manage the non-managerial worker • 5 types of managers: o Line – directly affect the performance of the organization o Staff – provide assistance/advice to line workers o Functional – deal with accounting, marketing, and functions related to those things o General – manage complex multifunctional units o Administrative – managers in public/not-for-profit organizations Accountability • Requirement to show performance results to supervisor Quality work life • Overall experiences in the workplace Up-side down triangle theory • managers support workers, who serve customers 4 functions of management: • planning – setting goals, and how to get it done • organizing – allocating resources to achieve goals • leading – arousing enthusiasm, inspiring effort to achieve goal • controlling – making sure goal gets achieved 10 roles of management: • monitor – scan for info • disseminator – share info • spokesperson – communicate info • figurehead – model for others • leader – inspire others • liaison – working with others • disturbance – handling problems • resource – handling budgets • negotiator – making deals • entrepreneurship – new innovations Mintzberg Theory • Manager always busy Today’s Economy Increase in: • Intellectual capital – shared knowledge, or collective brain power of an organization • Ethics – moral standards that dictates what’s “right” or “wrong” • Diversity – difference among people (ex. Race, gender) • Globalization – the interdependence of countries within the world Prejudice • Negative attitude toward a specific group of people in a diverse population Discrimination • Acting on negative attitudes and actively deny full benefits of organization Glass Ceiling Effect • Invisible barrier that holds back women/minorities from further advancing their career Organization • Group of people working together to reach a common goal Open System • A type of organization that takes raw inputs, processes it, and results in a product as an output Productivity • The amount of output/products in comparison to the amount of input/resource/cost • Quantity and quality of work performance , with resource utilization Performance Efficiency • Measure of resource cost that associates with goal accomplishments Performance Effectiveness • Measure of goal/task accomplishments Changes in Today’s Organizations: • More belief in human capital • Less commanding bosses • More teamwork • New technology • Work/life concern • More networking • Speedy General Environment: • Political/Law Environment • Natural Environment • Socio-Cultural Environment • Technological Environment • Economic Environment Specific Environment • Environment that is established through the groups interactions with other organizations AKA tasks Stakeholders • People/Groups that are affected by an organization Sustainable business • Businesses that meet the customer’s needs, but also protects the natural environment Sustainable Innovation • Creates products that have reduced environmental impact Value Creation • Creation of value for satisfying needs of stakeholders • 4 key stakeholders o Customer – value created through the price, product and quality o Owner – value created in profit and loss o Supplier – value created in long term business relations o Employee – value created in wages and job satisfaction Agenda Setting • Develops action priorities for accomplishing goals and plans Networking • Creating positive relationships between your company and others Kotter Theory • Agenda setting and networking are critical to manager’s success 3 managerial skills: • Technical – special experience to perform task • Human – Interpersonal • Conceptual – analytically think/logically Katz Theory • Today demand of human and conceptual skills are high Emotional Intelligence • Ability to manage ourselves and our relationships Chapter 2 Classical Management • People at work at act in a rational manner that is primarily driven by economic concerns • 3 subcategories: o Scientific Management – careful selection/training of workers  4 principles: • Carefully select workers with the right abilities for the job • Support workers by planning their work • Train workers and give proper incentives • Science of job (motion, proper work condition) o Administrative principles  3 principles: • Order • Initiative • Equity o Bureaucratic organization – rational/efficient founded on logic/order  5 principles • Clear division of labor – job well defined • Clear hierarchy of authority – authority/responsible • Rates and procedure – written guidelines • Impersonality – all rules applied • Career based on merit – promoted on ability/skill/perform Webber Theory • Bureaucracy best because capable of attaining highest degree of efficiency Disadvantage of bureau • Too much paperwork • Resistance to change • Employee apathy Follet View • Organizations are communities where managers and workers labor in peace, there is no dominance Hawthorne Effect • Singling out a worker to perform as expected Hawthorne Theory • Emergence of human relations in 50s and 60s, evolved to organizational behaviour Need • Physiological and psychological lack that has to be satisfied Maslow Theory • States that need at any level unlocked when next lower-level need is complete • Managers who help satisfy these needs improve productivity Theory X • People hate work, no ambition, act irresponsibly, followers Theory Y • People like work, like responsibility, creative McGregor Theory • Theory X inappropriate, theory Y consistent, emphasis on participation, involvement Argyris Theory • Scientific management limits self-actualization • Bureaucratic organization dependent passive workers • Treat people positively and as responsible adults System • Collections of parts working together towards a goal Subsystem • Smaller parts of a system Contingency thinking • Match management thinking practices with situational demand Knowledge Management • Using intellectual capital for competitive advantage Learning Organizations • Changes and improvements using lessons of experience Chapter 3 Globalization • Interdependence of countries to one another in the world • 5 reasons why globalize: o Profit o Low cost o New market o More capital o More supplier Global Sourcing • Buying material from around the world for local use Exporting • Selling local products to foreign markets Importing • Buying foreign products for local use Franchising • Buying rights to open store with name, products Licensing • Buying rights to sell products Joint ventures • Business operating beyond border of host country Foreign Subsidiary • Local business owned by foreign firm Political Issue • Potential risk WTO (World Trade Organization) • Negotiate issues with tariffs and trade restrictions Multinational Corporation • Operates everywhere, and serve everyone Transnational Corporation • Operates in one country, but serve everyone 3 host country cons • Extract to much profit • Dominate local market • Interference with local government 3 home country cons • Capital investments abroad • Loss of local jobs • Corrupt Culture • Shared set of beliefs, values, and patterns of behaviour common to a group of people Ethnocentrism • The tendency to consider one’s culture dominant over another Low-Context cultures • Emphasize communications via spoken or written words High-Context cultures • Rely on non-verbal and situational cues Monochronic Culture • One thing at a time Polychronic Culture • Time used to accomplish many things at once Sustainable development • Meet needs of consumers now, without hurting further generations Hofstede’s Cultural Dimensions • Power Distance – degree of which a society accepts unequal power distribution • Individualism-collectivism – degree of which a society emphasizes individuals vs. teams • Uncertainty Avoidance – degree to which a society tolerates risk vs. no tolerance • Masculinity-Femininity – degree to which a society values assertiveness vs. feelings Ethnocentric management • Has own ways, tight on foreign policy Polycentric management • Tries all ways, gives foreign space Geocentric management • High cultural intelligence Chapter 5 Entrepreneurship • Strategic thinking and risk taking behaviour that results in new opportunities Key Personal Characteristics of Entrepreneurship • Internal locus of control • High energy level • Self-confidence • Tolerance for ambiguity • Self-reliance and desire for independence • High need for achievement • Flexibility • Passion and action orientation Backgrounds and Personal Experience • Entrepreneurs raised with responsibility, initiative and independence. • Have many business experience Necessity-based entrepreneurship • When people need to become entrepreneurs because no other job is available Small Business • A business that has less than 100 employees, independently owned, and does not dominate its industry Succession Problem • The issue of who will run the family business when after the current head. o Can be solved through the succession plan - a formal statement that describes how the leadership transition will be handled. Ways most small businesses fail: • Lack of experience • Lack of commitment • Lack of strategy • Ethical failure • Lack of expertise • Growing too fast • Lack of strategic leadership • Poor financial control First-Mover Advantage • Comes from being first to exploit a niche or enter a market Life Cycle of Entrepreneurial Firms • Birth Stage – Fighting for existence and survival o Establishing the firm o Getting customers o Finding the money • Breakthrough Stage – Coping with growth and takeoff o Working in finances o Becoming profitable o Growing • Maturity Stage – Investing wisely and staying flexible o Refining the strategy o Continuing growth o Managing for success Business Plan • A plan that describes the details needed to obtain start-up financing and operate a new business o Executive summary – overview of the business’ purpose and highlight key elements of plan o Industry analysis – nature of the industry, economic trends and potential risks o Company description – mission, owners, and legal form o Product/services description o Market description – size, competitor’s strengths and weaknesses o Marketing strategy – product characteristics o Operations description – manufacturing/servicing methods o Staffing description – management and staffing skills needed and available o Financial projection – cash flow projection from 1 to 5 years o Capital needs – amount of funds needed to run business o Milestones – dates showing key stages of business Sole proprietorship • Business is owned by one person Partnership • Business is owned by 2 or more people Corporation • Legal entity that exists separate from owners Debt Financing • Borrowing money that must be repaid over time, with interest Equity Financing • Selling shares for cash Venture Capitalist • Make large investments into ventures for an equity stake in the business Angel Investors • Make large investments in return for equity in a new venture Chapter 6 5 steps in planning: • Define your objectives o What results? • Determine where you stand o Current accomplishments • Develop premises future o Anticipate problems • Analyze alternatives o Possible actions for anticipated problems • Implement Complacency Trap • Going along with the flow of events Short-Term Goals • Short period, less than an year Long-Term Goals • Long period, more than 3 years Strategic Plans • Determines long-term direction for the organization Operational Plans • Look for short-term activities to apply strategic plans to Policy • Standing plan provides broad guidelines to act by Procedure • Describe actions precisely that are to be taken in a situation Zero-Based Budget • Make every budget as if it were new Forecasting • Trying to predicting future Contingency Planning • Coming up with alternatives for when things go wrong Scenario Planning • Coming up with possible scenarios and courses of actions to take in the future Benchmarking • Using internal or external comparisons for improvements 4 goal criteria: • Specific • Measurable • Attainable • Referred to • Timely Hierarchy of goals/objectives • Complete lower level goals for higher level goal accomplishments MBO (Management by Objective) • Objective setting done between boss and worker Chapter 7 Strategy • Plan guiding resource allocations to achieve long-term goals Strategic Intent • All energy directed towards achieving a long-term goal Sustainable Competitive Advantage • Ability to outperform rivals in ways that are difficult or costly for them to imitate Corporate Strategy • Sets long-term direction for the total enterprise Business Strategy • Strategy for a single business unit or product line Functional Strategy • Guides the use of organizational resources to implement business strategy Strategy Formulation • The process of crafting strategies to guide the allocation of resources Strategy Implementation • Putting strategies into action Strategic Management Process • Strategic Analysis – Assessing competitive position o Identify and analyze o Analyze organization and environment • Strategy Formulation – Creating Strat
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