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BU121 Final Exam Notes.docx

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Department
Business
Course
BU121
Professor
Roopa Reddy
Semester
Summer

Description
1 BU121 Final Exam Notes NEGOTIATING Lab Manual (Pg: 276-285) - Tip #1: negotiating is not merely a series of compromises o The purpose of negotiating is seeing if you can get your interests met through an agreement  An interest is why you want something not what you want - Tip #2 it’s your people skills that can make the different o DISC  Dominant – good at making decisions  Influence – good at telling but uses s less direct method  Steadiness – when looking at new ideas will see the positive aspects, do not like change even when it is positive  Conscientious – introverted and reserved, task control and focused o Classic Profile  Emotions, goals, judging others, influencing others value to an organization, tendencies that can be overused, behaviour under pressure, fears, how to increase effectiveness - Tip #3: the most powerful negotiating skill is listening o Words (7%), tone of voice (38%), body language (55%) o To be effective at asking questions  Know where your questions are going  Ask the other party if it’s alright to ask questions  Tell them what information you are seeking o Three levels of listening  Selective, responsive, play back - Tip #4: develop a plan before negotiating o Determine negotiating style of other party (DISC) o What are my/our interests? o What are the interests of the other side? o What do I have that I can trade that is low value to me and high value to the other side? o What are the three options I can use to move the negotiating from compromising to joint problem solving? o What is the very least that is acceptable?  What do we aspire to?  What will we be content with?  What can we live with? o What is my Best Alternative to a Negotiated Agreement? (BATNA) - Tip #5: the top 10 factors for successful negotiating o Know what you want, know the other side, consider timing and method of negotiations, prepare point by point, offer benefits for accepting for accepting your offer, frame negotiation around 1-2 key points, know your BATNA, prepare options for mutual gain, listen, draft o Focus on why not what  What = price, contact, job, etc.  Why = the motivation which caused you to make that decision 2 o Questioning techniques  Know where you are going  Ask permission to ask questions  State why you want to ask questions o Listening skills  Words, voice tone, body language  Selective, responsive, paraphrasing o Underlying desire to reach an agreement from both sides Lecture Material - EASY process o Engage – recognize you are in a negotiation and quickly review the viable strategies o Assess – evaluate your tendency to use each of the negotiation strategies, as well as the tendencies of the other side o Strategize – select the proper strategy for this particular negotiation o Your one minute drill – each time you begin a negotiation situation, take a minute to review the 3 steps, gather knowledge so over time you improve negotiating skills - Negotiating Strategy Matrix o Avoidance – do not want to use, makes sense when small problem, knowing you have a better option somewhere else, small problem might grow in importance  Lose-lose situation o Accommodation – no leverage (can improve with knowledge), need to care about long term, no excuses so take ownership  Ex. Nurse taking care of child  Risk – you give up stuff, they gain stuff and take advantage (you should get something in return), not a healthy relationship  Lose-win situation o Competition – not capable, not worth effort, look at true potential of negotiation  Ex. Car dealer  Someone gets something and the other loses everything, bad for relationship building  Win-lose situation o Collaboration – win-win-win (you win , they win, relationship wins), 80/20 rule (takes a lot of effort and works 20% of the time, makes you 80% successful), prepare/identify/candor (honesty or trust)  2 categories – sages and dreamers  Pie is not finite, if you work together you can increase the size of the pie, not normal tendency for human nature, if you recognize those opportunities and use this strategy, you can gain many benefits, if you come up against someone who is competitive and you try to collaborate you are actually accommodating o Compromising – late in the negotiation process after legitimate strategies fully used, when only a small gap remain on one issue, always directly tied to an agreement  Thomas-Kilmann Conflict Mode Instrument - Basic Interaction Styles (similar to DISC) o Driver (D) – tries to get task done at faster pace, avoids detail, fear of failure, if you are mutually competitive they will want to cooperate with you o Expressive (I) – fast conversation, short attention span, does not like detail or boredom, fast information grabs attention 3 o Amiable (S) – not easy to deal with, friendly with you AND competition, concern is that you are not happy, likes to make sure everyone is ok with a decision, drive the driver and expressive crazy because they take their time and are not truthful, avoid conflict, will accommodate, then will use guilt o Analytical (C) – fear of making a mistake, analyze tasks slowly and are task focused, long time to make a decision, make decisions through analyzing data, once a decision is made it is hard to change it - Principled vs. positional bargaining; disruptive vs. integrative bargaining o Typical negotiations are ‘positional’  Positions are states – what they want  Strategy is ‘distributive’: that is your mind set (paradigm), you are looking at the situation as a finite pie and all you are trying to do is distribute it  Therefore, options SEEM to only be: Competing, compromising, or accommodating – since these are distribute strategies (sharing finite resource) o Principled negotiations use an ‘integrative’ / collaborative stragey  Produce a wise agreement  Efficiently and amicably o 4 basic points  Separate the people from the problem – ego then emotions get involved, should be attacking the problem not the people  Focus on interests not positions – getting to the true needs  Position – what you say you want  Interest – why you want what you said you wanted (underlying)  Generate a variety of options before deciding what to do  Insist that the result be based on objective criteria OPERATIONS AND SUSTAINABILITY Text (Unit3, Ch.11) - Stages of production and operations management: o Production planning – the aspect of operations management in which the firm considers the competitive environment and its own strategic goals in an effort to fine the best production methods o Production control – decision-making process focuses on scheduling, controlling quality and costs, and the day-to-day operations of running a factory or service facility o Improving production and operations – developing more efficient methods of producing the firm’s goods or services - Classification of production types o Mass production – the ability to manufacture many identical goods at once  Ex. Breakfast cereals, soft drinks, computer keyboards o Mass customization – a manufacturing process in which goods are mass produced up to a point and then custom tailored to the needs or desires of individual customers  Ex. Dell computers, tract homes, golf clubs o Customization – the production of goods or services one at a time according to the specific needs or wants of individual customers  Ex. Custom homes, legal services, haircuts 4 - Location o Availability of production inputs – certain resources needed to produce product of service o Marketing factors – ability to serve customers o Manufacturing environment – more manufacturers in one are means greater availability of resources o Local incentives – tax breaks, may reduce income, real estate, utilities, payroll o International location considerations – production moved to international locations, cheaper production costs - Designing the facility o Process layout – a facility arrangement in which work flows according to the production process; all workers performing similar tasks are grouped together, and products pass from one work station to another  Ex. Sewers o Product (assembly line) layout – a facility arrangement in which work stations or departments are arranged in a line with products moving along the line  Ex. Car manufacturers o Fixed position layout – a facility arrangement in which the product stays in one place and workers and machinery move to it as needed  Ex. Construction workers o Cellular manufacturing – production technique that uses small, self-contained production units, each performing to complete a manufacturing order - Pulling it together: resource planning o Make or buy? – make production materials or buy them o Inventory management: not just parts – deciding how much inventory to keep on hand o Computerized resource planning – computerized systems to control the flow of inventory and resources - Keeping the goods flowing: supply chain management o Supply chain: the entire sequence of securing inputs, producing goods, and delivering goods to customers. o Supply chain management: the process of smoothing transitions along the supply chain, so that the firm can satisfy its customers with quality products and services; focuses on developing tighter bonds with supplies.  Talk to us: improving supplier communications - Routing: where to next? o Routing: the aspect of production control that involves setting out the workflow, the sequence of machines and operations through which the product or service progresses from start to finish. - Scheduling: when do we do it? o Tracking progress with Gantt charts  Bar graphs plotted on a timeline that show the relationship between scheduled and actual production 5 o The big picture: critical path method and PERT  Critical path method (CPM) – a scheduling tool that enables a manager to determine the critical path of activities for a project – the activities that will cause the entire project to fall behind schedule if they are not completed on time  Program evaluation and review technique (PERT) – a scheduling tool that is similar to the CPM method but assigns three time estimates for each activity (optimistic, most probable, pessimistic); allows managers to anticipate delays and potential problems and schedule accordingly Lab Manual (Pg. 293-303) - The business case for sustainability o CSR: the balanced integration of social and environmental considerations in business strategy and operations o Maintaining economic success and achieving commercial advantage by building reputation and gaining the trust of people that work with or live around the company o Must satisfy customer demands, while also managing the expectations of other people, such as employees, suppliers, and the surrounding community o Sustainability is the business issue of the 21st century and has lead leading corporations around the world to embrace this concept and its link to economic success and competitive advantage - Global drivers of sustainability o Legislation – pollution and environmental issues o Investors with the spread of CSR performance indices o Other stakeholders o Commercial issues of compliance and risk management o Need to develop a competitive advantage - Sustainability can bring direct benefits to companies and ensure its long-term competiveness - Business can benefit from pursuing sustainable development in two basic ways o By driving down cost efficiencies  Cost savings from improved operational performance and efficiencies  Costs avoided by minimizing business risks and improving safety  Cost savings from improved recruitment and retention of talented employees  Cost savings and income produced though improved employee morale and productivity o By generating top-line growth (through new markets, new products, new customers/market share, innovation, reputation)  Increased revenue through learning and innovation  Enhanced recognition and reputation  Improved customer loyalty  Improved access to capital (improved reputation with investors, bond agencies, and banks)  Improved supply chain management (long-term business relationships)  Enhanced ability to strategically plan for the longer term Lecture Material Operations - Differences between service and manufacturing businesses o Judged based on quality and service 6 o Both transform raw material into finished good – exception in service o Impacts capacity  Integration of marketing and operations  Demand/capacity tradeoff – recognize whatever demand you are forecasting, from an operations perspective you must make sure you have the capacity to meet it, also make sure that you do not overestimate demand and have too much capacity with idle resources o Manufacturing  Capacity  Balanced – Have enough stock in hand to exceed demand – If you don’t have enough on hand it is expensive to buy incremental amounts of inventory, don’t want to have too much though that it is just sitting there (fixed costs), turns away customers or outsource at lower margins  Seasonality – Ex. Sports equipment – to shift demand and balance capacity (use pricing to even that out, promotion during off season) o Service  Capacity  Low – drop something off, come pick it up, even if there are more people than expected its ok because they are not there waiting  High – restaurant, salons, wise to set capacity to meet peak demand, enough tables chairs servers to meet demand  Raw material is person with unsatisfied need or possession that requires care, performed not produced, focus on process as well as outcome  Product is intangible – experience key, customized, can’t be stored  Customer is part of the process (extent of contact affects operations)  Implications: your location must be convenient for your customers (ties into marketing - Mass consumption vs. mass customization o Mass production technology – producing identical products using mass products methods  Stable market conditions  Good technique for stable market conditions because you must know that people always want this product in large quantities  In order to mass produce, your market must be stable, however markets do not work like this, they are constantly changing  Efficiency vs. effectiveness  Repetition – standardized product o New economic reality  Constant change  Customer-driven – marketing concept: must meet their needs, what we are making is equally important as how we make it  Customization and innovation - we must provide each customer with the benefit they want  Benefits 7  You can no longer simply mass produce because markets are constantly evolving, however individual customization is not good because it is not efficient (too slow and expensive)  Can now do this with technology – can use computers to customize but also mass produce items (we can create products in a mass way that are specifically designed for different customers) - ‘Triple bottom line’ o Profit/Environment/Society – People/Planet/Earth  “sustainability sweet spot” – where corporate and societal interest intersect (a new way to measure the bottom line) Sustainability - Cradle-to-cradle vs. cradle-to-grave, biomimicry o C2C  “waste equals food”  Products developed for closed-loop systems – every output is safe and beneficial (biological or technical nutrients)  Biological nutrients – biological must completely biodegrade into the earth, must come from the earth and return to earth (true C2C)  Technical nutrients – the reduced product is made into a resource of equal or greater value than the original product, unlike recycling which makes it into something worse  Eliminates concept of waste o C2G  Take-make-waste model o Biomimicry  Sustainable innovation inspired by nature – “biologically inspired engineering”  Not based on what we can extract from organisms and ecosystems (harvesting or domestication), but what we can learn from them  Ex. Velcro - Product stewardship o The responsible and ethical management of the health, safety, and environmental aspects of a product throughout its total life cycle  To be sustainable you can’t take an issue and make it someone else’s (the waste video)  Once the product is waste, it is still your problem o Responsibility has extended past to when the consumer holds the product, you must still follow through with your product when it turns into waste o The concept of extended producer responsibility – accounting for the impact of a product during use and after disposal - Sustainability through servicing o Increased efficiency and creation of environmentally benign products and processes necessary but not sufficient o Gains my eventually be counteracted by increases in consumption o Change business model from selling products to providing services  Turn demand for reduced material use into a strategic opportunity  Services more difficult to imitate – competitive advantage o Xerox – 1994 – became “the document company” – helps companies improve efficiencies in document-intensive business processes 8 - Sustainability of the supply chain o Supply chain – “a network of facilities that produce raw materials, transform them into intermediate goods and then final products, and deliver the products to customers through a distribution system”  Look at all the things happening in the chain and look at its environmental impact  You must look at where you are in the supply chain and ensure that everyone in the supply chain has the same goal (ex. Starbucks needs to ensure its supplier is getting its coffee in a sustainable way) o “Management of raw materials and services from suppliers to manufacturer/service provider to customer and back with improvement of the social and environmental impacts explicitly considered” o Outsourcing business operations doesn’t mean outsourcing responsibilities or risks in today’s global economy – sustainable supply chain management is key to the integrity of the brand o Examples  Walmart  Pilot programs with suppliers of seven common items – to measure and reduce the amount of energy used in making and distributing them  There are very rigid with what goes on their shelves (ex. Sour cream)  Walmart is cautious and makes an impact on all of the items that go on their shelves (ex. Sour cream)  Walmart is an excellent example of managing the supply chain sustainability  Timberland  Very much focusses on sustainability of their products and how they operate their entire supply chain  “If you are going to design carbon out of a product, you have to understand every place in the life cycle that carbon comes in”  Their shoes are made from recycled materials  They communicate their environmental message will to consumers by putting a “nutrition label” on their shoe boxes that shows the environmental impact - Green washing – implications, six sins o The act of misleading consumers regarding the environmental practices of a company or the environmental benefits of a product or service  When you are marketing something sustainable, you must communicate your message honestly and credibly to your customer to come across as genuine
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