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MGMT 1000

MGMT 1000 EXAM NOTES NOTICE: THESE NOTES COVER EVERYTHING IN DETAIL, AS MORE THAN 4 PEOPLE HAVE DONE THE NOTES ON EACH WEEK. WITH THESE NOTES YOU ARE WELL ON YOUR WAIT TO GETTING A GOOD MARK ON THE EXAM. MGMT 1000 Notes Week One Lecture PowerPoint Notes • The knowledge economy: A world where the ownership of knowledge as opposed to the ownership of financial capital, is becoming the formative force” o Organizations as “machines” versus “brains” • Contingency Approach: Analyzing relations between organization and environment. o prospector, defender and analyzer organizations. o Defender organizations focus on sustaining a profitable environmental niche by being highly cost-effective and use price competition, an emphasis on quality, and other “barriers” to discourage entry from potential competitors (Exxon Mobil) o Prospector organizations focus on developing a relationship with the environment based on finding, developing, and exploiting new opportunities (3M) o Analyzer organizations try to combine the strengths of both the defender and the prospector by developing an ability to produce a range of high-quality products very efficiently, while remaining open to new opportunities (Apple) • Trained Incapacity: o Individuals and organizations often miss valuable opportunities for learning and development because they have been conditioned and trained to perform in ways that have outlived their usefulness. o One result of "trained incapacity" and self-limiting beliefs is that people can easily get locked into rigid patterns that lead them to underachieve and "do the minimum” o People get "turned off" by their work. Instead of setting goals and aspirations that are energizing and challenging, they accept the way things are. They under-perform because they feel undervalued and under-challenged. o The problem of trained incapacity and self-limitation often creates corporate cultures characterized by stalemate or deteriorating performance Readings 1.1 Meeting The Challenge of a Knowledge Economy • More than ever, we are living in a knowledge economy where the key factors of production reside in the capacities and ingenuity of the human mind. • As the experts suggest, this means that increasing emphasis must be placed on: o Continuous Innovation: Products become obsolete almost overnight, successful companies are those that consistently create new knowledge o Collaborative learning: Learning organizations where people continually expand their capacity to create the results they truly desire, where new and expansive patterns of thinking are nurtured o Competitive advantage: Competitive advantage no longer belongs to the biggest or those blessed with abundant natural resources, or the most capital. In the modern economy knowledge is king • The rise of knowledge work and a knowledge economy creates a powerful synergy between individual and corporate interests in ways where all can gain Key Implications on Individuals and Organizations • Downward pressure on wage rate resulting from automation, the de- skilling of work, and the ability of corporations to globalize operations to take advantage of the lower labour costs worldwide • The key to success is one’s ability to join the knowledge economy • People and organizations need to lever their ability to learn and most importantly their ability to learn to learn at a rapid rate. This will increase their employability and intellectual capital • Knowledge is not tied to any country; it is transnational, portable, can be created everywhere, quickly and cheaply thus anyone with a competitive advantage based on knowledge will be challenged soon, and often by a total newcomer. o This means that life-long learning is now a necessity • Organizations and Workers have to work together to share this knowledge in order for both employee and organization to be successful • Large organizations are finding ways of spawning fresh initiatives and transforming themselves. Smaller/newer organizations are growing fast (e.g. Nike, Nokia, Netscape) 1.2 – The Rationale for Developing Learning Organizations • In times of change learning organizations that promote the creativity of people at every level are absolutely necessary to deal with the new challenges presented. • Old styles of thinking, and organizational routines that stifle creativity, have to give way to fresh approaches that allow people to bring forward ideas and innovations that will create new value • Reasons for Creating Learning Organizations: o generate renewable resources o create a sustainable advantage o foster human growth and development o create new niches o foster adaptability and change o create new knowledge and value • Reinforced through the story of Gordon MacKenzie and being an artist. (he asked students grades 1-8) whether they considered themselves artists 1.3 – The Office of 2020: We Need it Yesterday Key Aspects of the office of 2020: • Boomers won’t leave. Generations will mix o the norm as aging baby boomers stay on the payroll, either because they will need to earn more before retiring, or because changes in government regulations will make retirement less attractive • The visible minority will be white o A falling domestic birth rate combined with rising immigration will make Canada a country where the majority of urban workers are not white. This trend is already close to reality in Toronto. • We will all be linked to work 24/7, whether we want to be or not o think of the boundaries we will need to create to keep work from storming through our privacy and leisure time • We will make more of what we consume, where we consume it. o Consumers today are creating their own books, software games and music. This trend, of producing the products you consume, is called “prosumerism,” and will spread quickly. This will spur producers to make their products consumer-friendly like never before. • The office will be where we say it is. o Work will be more and more delinked from location. The same technologies that keep us on constant call also let us do lots of productive work at a distance • Social media will be the community halls of the future. o They will create the factory floor and the office meeting room where workers can collaborate on projects socially through Facebook and Twitter • Real companies will have virtual locations. o A decade from now, virtual locations may out-number brick and mortar ones, with marketing being almost all online. • Management will be pushed down and out. o Top-down, centralized leadership models will weaken as flexible work formations and management systems create highly decentralized workforces and decision-making. • Contingent workers will become unconditionally important. o More part-time, seasonal and contract workers will help companies adjust in advance to quick changes in the type and amount of work that needs to be done. • Teamwork will be a learned skill, not just a nice attitude o More outsiders, faster technology, wider networks, more complex problems – a need for more teamwork. The ability to work on a team, and especially to lead it, will be one of the most important skills in any workplace. • Steps to create a plan of action: o Understand the trends – what will happen o Clarify the implications – what do the trends mean o Identify the needs and opportunities – explicitly define what needs to be addressed and potential areas of growth o Ensure that the 2020 management team is attaining the skills to be successful with those change 1.4 – Mechanization Takes Command • The old man’s vision of human alienation recurs in various forms, as they contemplate the high price of mechanical progress in terms of the transition from craft to factory production, the exchange of rural community for urban sprawl, the general degradation of the environment, and the assault of rationalism upon the human spirit. 1.5 – Learning and Self-Organization Organizations as Brains: The ability to have specialized sectors working in a decentralized manner. Tutorial: Readings: Technology As A Catalyst For Learning: • New technologies create many new learning opportunities. They can help people catapult themselves into "knowledge work" and develop new capacities for success in a knowledge economy • 3 cases where technology has catalyzed learning: o The knowledge network at Arthur Anderson o Virtual teams at British Petroleum o Information systems at Washington DC hospital center MGMT1000 Notes Week 2 Lecture PowerPoint: • We can learn more about ourselves when we take the time to see ourselves the same way others do • Many people are affected or interested by our choices o Employees o Community o Competitors – wants to see how one business’ choices will affect their own • By taking on the stakeholder approach, one can build on their problem solving • Two- way relationship between stakeholders and organizations Activity Adopt The Perspective Of Key Stakeholders – NMS Think About Your Stakeholders • Step 1: Select a focus o Improve the visibility of the store o Asks, “who are the key stakeholders?” • Step 2: Ask yourself how you can learn more about their perspectives o How do they see the store? o What do they think about it? o How will they act and react to the problem of improving visibility? o What can be learned by these insights? o How will this change what is being done now? Stakeholder Analysis: • Step 1: Identify your Stakeholders • Step 2: Prioritize your Stakeholders • Step 3: Understand your Key Stakeholders Stretch benchmarking • Individuals and organizations can achieve exceptional levels of performance by benchmarking against models of best practice and superior accomplishment. The ability to stretch is key. Otherwise benchmarking breeds complacency. • Benchmarking involves at least three key steps: o Setting a mark by finding a new standard of "best practice" that is being achieved by a "role model" such as an individual, a team, an outstanding competitor, or an exceptional organization from inside or outside of the existing business, profession or industry. o Learning how the benchmarked "role model" achieves exceptional results. o Finding ways of achieving or surpassing these results in the context of one's own special circumstances. • It is important to learn from: o Competitors o Businesses outside your industry o Dissatisfied customers o Role models o Your own aspirations • Make sure you don’t copy what others are doing Bureaucratic Silos: • It is necessary to find ways of dissolving the boundaries that keep people apart. • How Does Bureaucratic Fragmentation Happen? o Functional divisions and departments become power centers – “We’ve got to clout exactly what we want” o Sub-goals, esp. those powerful departments, become more important than organizational goals – “Maybe it could work.. but it would never meet our own targets” o The divisions and conflicts become particularly entrenched when rewards reinforce the fragmentation – “Winning is everything” Use Multiple Views to Improve Decision Making – NewMindsets • By being open to different possibilities, you allow yourself to have lots of potential paths for development, increasing adaptability and getting new opportunities • Effective When: o In less structured environment o When you are not sure of “long term” / future challenges o When you need to consider issue of problem o If you don’t consider multiple views, run danger of locking yourself in an ineffective solution o Ex: advertisement campaign, discussing long term ways to improve rocket launch • Ineffective When: o In a structured environment o When you are “expert” ; know exactly what to do o In a situation that requires specific course of action o Ex: surgeon, rocket ship launch (in the moment) • Why are multiple views important o Navigate through difficult situations  Able to think from client, competitor, etc’s point of view and realize solution and deal with difficult situation o See the big picture rather than get distracted by detail o Enrich understanding of situation  Looking at it from different perspectives allows broader view o Discover new relationships  Nothing is cause-effect, everything is interconnected o Generate new thinking and breakthroughs o Increase adaptability • Techniques for being open to different possibilities: o Pay attention to key warning signals o Use competing teams and experiments o Integrate opportunity-seeking as an everyday activity Readings: Toward a Responsible Society – ePub reading • A firm has 3 types of stakeholders o Organizational  Internal to the firm  Ex. Employees, managers, stockholders, unions o Economic  External to the firm  Ex. Customers, creditors, suppliers, distributors o Societal  External to the firm  Ex. Communities, governments, regulators, nonprofits and NGOs, environment o These 3 stakeholders form 3 different circles  Organizational is the smallest circle, economic the middle, and societal the largest  Government is the only stakeholder that is purely societal, as it is not part of the organization and has no economic relationship with the firm Winning support for your projects • Benefits of stakeholder analysis o You can use opinions of powerful stakeholders to improve your idea and win their support o Support from powerful stakeholders gives you more resources o Communicating early and frequently with stakeholders lets them know what you are doing, so they know the benefits of your actions and will support you more o You can anticipate what people’s reactions will be to your project, and work around this • Steps to stakeholder analysis o Identify stakeholders o Prioritize stakeholders o Understand your key stakeholders Tutorial: Activity: Establishing team ground rules – NewMindsets • Ground rules are needed so all members are on the same page • Ground rules should be simple, flexible, and performance focused o Start with a few key basic ground rules, and allow them to evolve over time to address any issues that may come up o The point of ground rules is to make the team more effective, so do not make them a list of pointless obligations that get in the way of productivity o Types of questions:  How are decisions going to be made?  How are differences going to be resolved?  How are people going to treat each other?  How is the team going to communicate internally/externally?  How are issues regarding individual and team rewards going to be handled? Being an effective team member – NewMindsets • 5 ways to be an effective team member o Speak up when you see an opportunity for improving team performance o Resist group-think and conforming to ideas of others for no reason o Think about the consequences of your actions on others o Be ready to do your part when help is needed o If you’re not working for the team, you’re probably working against it • To be a valuable team member o Honor your commitments o Do your best to make positive contributions o Collaborate o Give and receive constructive feedback o Set high standards for yourself and encourage them in others o Stand by team decisions Two models of team development – NewMindsets • The midpoint transition model o Phase 1 is where you have your first meeting and establish the basics of what you are doing o Then, you have a transition point in the middle where you realize that fthe deadline is approaching, and you kick into high gear o Phase 2/completion phase is where you approach completion, and become more productive/review what has/hasn’t been working for you so far in order to get your project done • Team lifecycle model o Forming phase  People come together for the first time and try to get to know each other and how everyone fits into the group o Storming phase  Team beings to encounter difficulties as problems arise  Productivity declines o Norming phase  Team rallies together and adopts a set of shared understandings and norms  Team understands that unless they work together they will be unsuccessful o Performing phase  Team hits their stride and functions well  Trust is formed between members People use their strengths and MGMT 1000 Notes Week 3: Skill Development: Creative Problem Solving, Stress Lecture PowerPoint Notes • A Social Business shifts the focus from documents, project plans and other temporary artefacts to the source of the energy, creativity and decision making that moves the business forward: people. • A social business takes a “people-centric” approach that relies on:  Networks – Globally integrated networks of employees, partners and customers are the backbone of a Social Business.  Social and real-time collaboration – Connecting remote teams of people to improve and decision making and discover relevant expertise or related work empowers people and enables problem solving.  Mobility – A social business benefits from enabling individuals to use the device best suited to their needs and keeping them connected whenever and where ever they are.  Integration – Bringing social collaboration capabilities into the applications people use to do their jobs. Activity: 3.1: SWOT Basic Concept: -Any object experience or event can be interpreted in many ways, it is therefore important that we recognize and understand the frames of reference that we use to shape these interpretations and why we favor certain frames over others The importance of being aware of frames of reference: The process of framing can cause us to see a situation in a particular way Our frames of reference create contexts of interpretation that shape how we make sense of situations: -They create focus of interest -Create a boundary around what we see and experience -Guide our attention -Lead us to see and emphasize certain features in the world around us and to ignore others -Encourage us to put a particular spin/interpretation on the situations in which we are engaged Frames of reference can also create problems: -Create a myopic view -Lead us to interpret every situation in the same old way -Limit how we think and act -They create biases and blind spots that distract us from what is important -Can lock us into a world of our own -A frame of reference can sometimes be so detached from a situation that it may lead us to act in dysfunctional ways - A frame of reference can elevate one interpretation over another and in the process eliminate other perspectives from view Examples: What’s wrong With My knee? Bill has a knee spasm; in order to find out why he is in so much pain he goes to see several doctors to solve the problem. He sees a chiropractor, goes to a specialty shoe store, an acupuncturist etc. Each doctor has different diagnoses for Bill and each one has a different solution. - The process of diagnosing and prescription hinges on the process of which the problem presented is framed - Each doctor had a different frame of reference and so they tried to fit what they saw into familiar patterns. - The frame the professional uses to understand the problem dictates a specific action. One uses acupuncture, another suggests arch supports, and still another recommends surgery. What’s the problem with this organization? An organization that is having difficulty adapting to change, calls on a management consultant for assistance. However, he finds many sources of conflict in the company. The consultant is confused about how to solve the problem (which frame should he choose?) - Managements challenge is to integrate the insights of different frames - The meaning of any situation depends on the context of interpretation - By learning how to change frames in ways that broaden and deepen insight, we can learn to approach situations in new ways Key Implications Of reframing: Understanding frames and how we can often get trapped by frames, we can open the way to new methods of problem solving. As a result: -we can learn how to develop new perspectives -we can make multiple interpretations of the same situation, and act with these views in mind When we find new ways of reframing and understanding the underlying issues, new options will emerge SWOT (Strengths / Weakness / Opportunities / Threats) analysis The overall aim of this technique is to evaluate Strengths and Weaknesses of your business idea in relation to Opportunities and Threats in the marketplace at large. KEY IDEA SWOT used to attain 'fit' between internal competencies and market opportunities • SWOT a popular method of planning and organizing business plan Strengths Weaknesses Opportunities Threats 3.2: Meeting, Meetings, Meetings (time management case) • Manager of special projects in a large construction and land development firm employing 1500 people. • You are a professional engineer: been working in the firm for the past 5 years and plan on working for another 5 and to rise to the position of vice-president of engineering services. • This particular department is highly visible and is regarded as a linchpin in the organizations overall operations. • There are three sets of clashes you see in the particular month which are • Routine project review meeting that is on the second Monday of every month that clashes with a special hospital appointment for your son. Wife is out of town and you have been waiting for 2 months for appointment. In my point of view I would weigh out the pros and cons of attending either of the appointments. If I have been waiting for the doctor’s appointment for 2 months it is something serious and cannot be missed. Hence I would try accommodating the review meeting either on the same day at a later time or the next day if it is permissible. • CEO has called for a special briefing on a project that is in a critical stage of development. All department managers are expected to attend it. Unfortunately, a high-profile visitor from France is arriving on the same day In regards to a shopping centre project. This meeting has been arranged and carefully planned for six weeks. In my point of view since the meeting with the French delegate is business related and not a personal appointment I am sure the company will take that into consideration and excuse my absence from the special briefing the CEO called upon. Both these meetings are equally important to the company. • A special daylong ‘retreat’ of the corporate planning budget committee has been called review financial plans that have a bearing on three of your projects. Yo are scheduled to give a luncheon address to the local chamber of commerce on the same day. In my point of view, again the pros and cons of each task need to be weighed out. If someone else can take your place at the reviewing of financial plans then you can attend the address to the chamber of commerce. 3.2: Triple bottom line KEY IDEA •Triple Bottom Line (TBL) stands for: •Profit •Environmental •Social •TBL basically refers to the need for businesses and firms to pay more attention to social, environmental impacts as well as financial (profits) Failure to do so = cannot compete in a globalized world INSIGHTS •TBL is important because in today's world, consumers command more authority than ever before in mankind, so if consumers actually give a shit about saving trees then as a firm/business you need to change your operations so •that they are more "environmental' -> Consumers hold the authority; firms need to 'fit' into consumer demands TBL: THOROUGH DETAIL FINANCIAL •Firms need to make money, indicators of success are profit/loss statements, ROI SOCIAL •Embraces social responsibility as a core value •Indicators of social success: •Human rights record •Safety in operations & products that are sold (i.e. mercury free toys) •Volunteering and donating to charities ENVIRONMENTAL •Growing consumer trend towards 'eco-friendly' means firms need to reduce carbon footprint -> going 'green' makes the firm look better in the eyes of the public Indicators of environmental success: •Pollution reports •Energy consumption •'green' certification (i.e. LEEDS) EXAMPLE: Tim Horton's •Though they are a coffee shop they run a program each summer, SEND A KID TO CAMP, where they donate a lot of $$$ to camps so children can go and play  this is Timmies way of saying we socially responsible Readings: 3.3: The Balanced Scorecard KEY IDEA •A strategic planning and management system developed by KAPLAN & NORTON that helps organizations (govts, firms, non for profits) monitor how well they are doing their TBL objectives •Balanced scorecard is now a 'framework' that outlines how a firm can go about getting their TBL objectives done 3.3: How to Kill Creativity Here are some easy ways as to how managers kill creativity: • Always pretend you know more than anyone around you. • Police your employees by every procedural means that you can devise. • Run daily checks on progress of everyone’s work. If a daily check is carried out, people tend to follow the same tasks that they are good at so that they get a good remark rather than doing it in a different and creative way. • Be sure that your professionally-trained staff members do technicians work for long periods of time. Even though specialization is good in a company, doing the same work over and over again makes the workers dull and lethargic to the task and reduces creativity and efficiency. • Erect the highest possible barrier between commercial decision makers and your technical staff. • Be certain not to speak to employees on a personal level. • Try to be the exclusive spokesman for everything for which you are responsible. • Say yes to new ideas but do not implement them. • Call many meetings • Put every new idea through channels and scrutinize them. By going along channels a lot many times such ideas get lost. • Stick to protocol. Don’t take risks. • Worry about budget. • Cultivate the not-invented-here syndrome. 3.4: Technology KEY IDEAS •Technology has created short-term benefits at long-term costs: environmental pollution, loss of skill & knowledge •Service-based inventions are impediments to growth; the degree of impediment incorporated in society is measured by: •Monetary cost •Specific counterproductivity •The loss of knowledge •'hidden currciculum' MONETARY COST •Money is spent on supporting service technologies, at what point does it become eccentric? SPECIFIC COUNTERPRODUCTIVITY •Service tech could produce opposite effect of what service tech is supposed to do (i.e stupidifying schools, instituionaziton) THE LOSS OF KNOWLEDGE •Self-explanatory HIDDEN CURRICULUM •The beneficiaries of service techs are those ppl who adminster them (i.e doctors, politicians etc) •"professionals cut through the social fabric of community and sow clienthood where citizenship once grew" Alternative to the devastating service tech •Authentic social forms characterized are: • Uncommodified • Unmanaged • Uncurricularized UNCOMMODIFIED • Service techs profit in one way or another from social conditions (i.e therapists making a person's grief into a commodity, thus the service is now a service but not care) UNMANAGED • Service techs replace communality into heirarchy of control (I.e institutionalization in jails) UNCURRICULAIZED • Authentic social forms allow room for individual growth, do not implement a general outline for ALL (i.e education system) MGMT 1000 Notes Week 4 Name: Joyce Tan Lecture – Engaging Customers: Products and Services and the Importance of Quality DyKnow Notes • Key Lessons: o New product development (NPD) o product lifecycle o cost-quality curve o quality mindset vs. quality programs (i.e. the affect a product change has from the perspective of various stakeholders) o case: perfection or bust o generating new value and maintaining customer support. • IBM “Live” case study – the importance of collaboration, o eating your own dog food – using their own technology o Guest Speaker, Alistair Rennie, General Manager IBM Collaboration Solutions o IBM lotus Live:-it enables businesses to move at a faster pace and dedicate more time and effort to important things, rather than the o gives a business huge competitive advantage b/c the time it takes to set-up meeting and so forth can be done in that moment o IBM Workers definition of Social Business: o Social Business is the world of possibility that occurs when all of the energy and opportunities that have been generated around consumer- side models such as Facebook and Twitter are focused, and brought to bear on business challenges. enable sales forces, new ways to discover expertise, new ways to understand your organization’s culture, new ways to establish brand trust with your customers, and much more. Why are enterprises investing in social platforms? o want to capture and re-use knowledge o maintain human connections across a disparate workforce, potential customers, and potential partners o Particularly in North America, remote and mobile work is becoming the norm as two-thirds of the workforce works remotely at least occasionally o The pressure to modernize systems to meet new workforce demands. Highly empowered, tech-savvy individuals are entering the workforce, joining the 40 million Gen Yers already in the workplace Activity: 4.1Use the rules of one situation to reinvent another • many creative breakthroughs can be achieved by acting as if you were involved in a related, but different situation • often strangers have the best insights on problems because they take a fresh look • apply the rules that make one situation effective to another situation • ex. when reinventing hospitals, think about how 5 star hotels are designed; use those ideas to exceed the expectations of patients • summary of the technique: o select a problematic situation that needs change o get outside by selecting a very different situation which you can learn from o identify the rules and best practices in the new situation that make it superior o apply the rules to your problematic situation 4.2Developing new products and services • - “Creative reference points: a creative way to generate new product/service ideas is integrating key design principles from three of four completely different products and services outside your field o Example of Swatch, Swiss company famous for turning watches into fashion accessories • use creative reference points to find breakthroughs • summary of the technique: o select a problem and think of a creative reference point o identify the key design principles that you want to use or avoid in developing your new product/service o integrate the best ideas to create a unique product/service o ex. when designing a chain of senior’s residences (the problem), you consider the pros and cons of a fun fair (creative reference point) such as fun and excitement, lots of activities or crowds of people and laughing children (these are the key principles that you want to use or avoid). Use those pros and cons when thinking of ideas for your problem. 4.3Promote quality and continuous learning as core values • a commitment to quality and continuous improvement can reduce costs, increase profits, and help create corporate cultures where learning is a way of life Quality Revolution • the old logic was that if you wanted to increase the quality of a product, the costs of production would have to increase since quality is expensive and difficult to achieve • new logic suggests that when you focus on increasing the quality, you actually reduce the costs of production because poor quality is expensive • it’s a vicious loop: poor quality production systems -> low productivity -> lots of defects and waste materials -> annoyed customers -> few new customers -> business has to spend more on marketing because of the poor sales -> end result is low quality and poor profitability • to be effective, the pursuit of quality has to be a mindset, not just a technique; it also has to break bureaucratic boundaries • ex. pulling the cord at Toyota – every employee takes responsibility for improving the quality and effectiveness of actions. This philosophy is called kaizen. If any worker sees a problem on the production line they can “pull a cord” to stop the machines. Then, they all collaborate to fix the problems and improve the quality. • quality problems are systemic – the quality of a product depends not only on the work you do, but also the quality of the supplies, the quality of your equipment, etc. • Quality is fundamental: Dissatisfied customers drag down companies. solutions are also systemic; a mindset of quality should be present in all areas of your business because one faulty area can drag the whole thing down • “You can't achieve "quality" just by adopting the latest program or technique. There has to be something much deeper because quality knows no compromise.” Readings: 4.4New Product Development – tutor2u development/default.html • The overall product failure rate is 60% • Failure-rates for house and grocery store products approach 80% • NPD is a process designed to develop, test, and consider the viability of products which are new to the market • develop new products to defeat/keep up with competition, maintain competitive advantage, bring in new customers, create cash cows for the future, etc. • can be completely innovative products, into an old market, an old product into a new market, or a new product into a new market • strategic stage: firm assesses current portfolio, opportunities, and threats; then they determine what type of product would fit in with their corporate strategy • stages: 1. idea generation (R&D, employees, customers, competitors, research) 2. idea screening (ideas checked for feasibility, financial viability, and marketability) checked against the firm's new-product goals and strategies 3. concept development and testing (testing with a group of consumers to see if the products have strong consumer appeal) 4. marketing strategy development (designing a formal stragy) 5. business analysis (a review of costs/sales/profit projections. estimate break even, etc.) 6. product development (developing a prototype; concerned with formal design, functional design, and economy of manufacture) 7. test marketing (launching product in regional or national basis) 8. commercialization (product launch), called roll out, from packaging in different languages to training service personnel • three ways to introduce new products 1. line extension (using existing brand name on products in the same category) 2. brand extension (using existing brand name on products in a new category but within the same broad market) 3. brand stretching (using an existing name on a product in a different market) • all products need a USP (unique selling position -> think: why would people buy this product) – the unique benefit of that product that a firm promotes to its market • reasons for failure: bad research, poor marketing, market not ready for product, etc. 4.5Product Life Cycle – MarketingTeacher • Introduction o creating awareness o limited number of products available o profit is not an immediate concern o Production and marketing costs are high • Growth o competitors appear with similar offerings o products become more profitable o large companies form alliances and joint ventures or acquire smaller companies o advertising focuses on building brand o market share stabilizes o Distribution is key to success at this stage o Profits peak at end of growth stage • Maturity o sales grow at a decreasing rate then stabilize o price wars and intense competition o market reaches saturation o promotions more widespread and uses a greater variety of media o Line extension (bringing out several variations of a basic product) o Products in maturity stage in one country may be at introduction stage at another • Decline o downturn in the market o more innovative products are introduced/consumer tastes changed o intense price cutting and some products withdrawn o Sales of prfit fall, but profits can be improved by reducing marketing spend and cost cutting 4.5 Perfection or bust – Creative Organization Theory (Morgan) • the company Design Inc, run by CEO Klee was obsessed with perfection= dwindling in motivation, lack of employee confidence • they offered low salaries and long work hours but they promised employees they would learn to be at their best • one employee resigned because work was too time consuming • after months of interviews, Klee still couldn’t find a replacement that was perfect enough because he picked at little details • after a while, overall employee morale dropped and they became very unhappy Study questions: 1. What are the stages in new product development? Which is the most challenging? Why? Answer: summary of the technique: o select a problem and think of a creative reference point o identify the key design principles that you want to use or avoid in developing your new product/service o integrate the best ideas to create a unique product/service o Marketing strategy development o Business analysis o Product development o Test marketing o Commercialization most challenging is integrating ideas from a creative reference point into your new product and service because you will have to apply ideas from a very different product/service to a new one. . After the product is placed, you have to go a step further and make sure it is presentable and it’s profitable. 2. What is product life cycle? Why is it important in relation to your BPTP? Product life cycle – the phases of a product’s life, from development to introduction the market, to growth, maturity, then decline in popularity It’s related to BPTP because thinking of our product life cycles lets us cover every phase and plan for them 3. What’s the main message in the perfection or bust case? If you get too focused on success and can’t see the bigger picture, your company will not be successful. 4. What’s the key message in the cost-quality curve? a. the old logic was that if you wanted to increase the quality of a product, the costs of production would have to increase since quality is expensive and difficult to achieve b. new logic suggests that when you focus on increasing the quality, you actually reduce the costs of production because poor quality is expensive 5. Select a few different technology-based products or services. How would you describe each from a product development, product life cycle and quality view? - Apple iPad o Excellent business analysis and production development o iPad is still in the growth stage seeing as not everyone has it o Excellent quality, it gives off a prestigious aroma to owners 6. Think back to our first class and the old man’s comment “… whoever uses machines does all his work like a machine.” In your opinion, how does this relate to quality? People look for the best quality machines to use, using the old man’s comment, we as humans try to work like the best quality machine, being the most efficient and sustainable Tutorial: Week 4 – Skill Development: Financial Literacy Readings: 4.1Break –even • break-even point (BEP) is when costs/expenses equal revenue • there is no net loss or gain, but opportunity costs have been paid and capital has received the risk-adjusted, expected return • to reduce the break-even point: o reduce fixed costs o reduce variable costs o increase revenues by increasing the selling price • Unit BEP = • Sales BEP: • PV= • And then: BEP= Cash Flow • cash flow is the movement of money in/out of a business • measured during a specified time period • can be used to calculate rate of return, determine problems with liquidity, or as an alternative measure of profits • Example: Description Amount ($) totals ($) Cash flow from operations +10 Sales (paid in cash) +30 Materials -10 Labor -10 Cash flow from financing +40 Incoming loan +50 Loan repayment -5 Taxes -5 Cash flow from investments -10 Purchased capital -10 Total +40 • (total) net cash flow: of a company over a period (typically a quarter or a full year) is equal to the change in cash balance over this period… • positive if the cash balance increases (more cash becomes available), • negative if the cash balance decreases. o Operational cash flows: result of the company’s internal business activities o Investment cash flows: received from the sale of long-life assets o Financing cash flows: received from debt and equity • One of the major reasons businesses fail is because they run out of cash – outflows / disbursements of cash are greater than in-flows of cash. • Can be applied to personal finances Five Step Approach 1. Forecast your opening balance 2. Forecast your projected monthly sales 3. Forecast projected receipts (cash in) 4. Forecast projected disbursements (cash out) 5. Do the calculations to create a summary of your projected cash flow Random Lessons…Not in book 4.5 Total Quality Management (TQM) • The process of utilizing the capabilities of a workforce in order to improve the quality of a product. • Enacted by managers developing and redeveloping workforce/production systems and bringing them into statistical control. • Once the maximum amount of perfection is reached, transformation of those systems occurs to seek further improvements. • Statistical Control: Achieved by setting statistical tolerance levels for the quality of each product. The level of deviation from these levels indicates the level of quality being reached in production. • Run-Chart: Tracks the amount of deviations from the tolerance levels over time. • Example: Automotive companies Honda and Toyota held small deviations from • • their idea product quality level; this allowed them to surpass competing auto manufacturers. • Key to product quality: Statistically controlled social systems (employee population) and technical systems (machinery and equipment). • Benefits of TQM: Lower production costs, Increase Quality, Increased Profits, Increased Employment • Pay-for-performance schemes undermine teamwork and improving the system MGMT 1000 Notes Week 5 Lecture: PowerPoint Notes • “Social Business” – A Double-Edged Sword o If you subscribe to a free-consumer service, you are the commodity  Companies use GPS to target specific advertising o Personal and business data can be compromised o Online services are not 100% reliable  Service outages can cost a business in lost productivity, sales, and reputation • Customer value triad o Quality, service, and price Activity: Learning to Challenge Mental Models 1. Mental models employ deeply held images and assumptions that can shape our perceptions and actions 2. Some of the best ideas are blocked by organizational dynamics a. Mental models are active and shape how we act b. Could be “we believe people are untrustworthy” 3. Mental models can create inappropriate frames for understand situations and shape what we do, and provide the basis for conflict and confusion 4. Improve organizational effectiveness by learning to surface and change mental models 5. Surfacing mental models a. Planning for unexpected future events allows people Shell to examine current assumptions and practices b. Bring in outside perspectives to gain insights on situations and organizational structure 6. Balance between advocacy and inquiry a. Allows people to put views on the table and open them to examination for flaws b. Goes beyond winner-loser mentality 7. When advocating: a. Show reasoning b. Encourage different view 8. When inquiring: a. State assumptions clearly and what they are based upon 9. When people stop inquiring: a. Ask what data will change their views 10. When you’re hesitant to express your views: a. Think out loud about what is causing difficulties b. Work to design innovative ways of overcoming barriers 11. Bandwagon effect a. People share views, which create new assumptions and mental models in self-sealing bubbles of reality  lead to conflict Small Changes Can Create Large Effects · Find ways to catalyze the self-organizing potential of the system so that change acquires a dynamic of its own · Changes occur through differences that make a difference · Differences make a difference when they stimulate a complete reframing of a situation · Situations can be reframed directly through new information, or through key actions · To have an impact, the new ways of understanding the situation have to lead to new actions · Actions that lead to reframing often appear illogical or have an element of disruption or surprise Readings: Marketing Mix • Basic, tactical component of a marketing plan • Promotion models o Four P’s – product, price place promotion o Five P’s – four p’s and people o Seven P’s – five p’s with physical evidence and process • Offers to customers can be altered by varying elements • Pricing strategies o Premium pricing – high price for very unique products o Penetration pricing – price set artificially low to gain market share o Economy pricing – no frills low price o Price skimming – charge a high price because of substantial, but unsustainable, competitive advantage o Psychological Pricing – used when marketer wants the consumer to respond on an emotional basis o Product line pricing – used when there is a range of products, pricing reflects benefits of parts of the range o Optional product pricing – using “extras” to drive price up o Captive product pricing – for products with complements, companies will charge a premium price once the consumer is “captured” o Product bundle pricing – combine several products in the same package o Promotional pricing – pricing to promote a product o Geographical pricing – variations in price in different parts of the world o Value pricing – external factors force companies to provide “value” products • Place is a channel, distribution, or intermediary o Six basic channel decisions  Direct or indirect channels  Single or multiple channels  Cumulative length of multiple channels  Types of intermediaries • Wholesalers – break down bulk for retailers • Agents – used in international markets • Retailers – stronger personal connection with consumers • Internet – geographically disperse market  Number of intermediaries at each level  Avoid “interchannel conflicts” • Product is broken down into core product, actual product, and augmented product o Core product – benefit of the product that makes it valuable o Actual product – tangible, physical product o Augmented product – non-physical part of product o Product life cycle  Introduction, growth, maturity, decline o Customer life cycle  Creation and delivery of lifetime value to customers • Promotion is the tools available for marketing communication o Promotion mix  Personal selling  Sales promotion  Public relations  Direct selling  Trade fairs and exhibitions  Advertising  Sponsorships • Physical evidence is the material part of a service • People include the attitude, skills, and appearance of all staff • Process is a means to achieve an outcome Social Media, Marketing, and “Social Authority” • Social media refers to the use of web-based and mobile technologies to turn communication into an interactive dialogue • Six types of social media o Collaborative projects o Blogs and micro blogs o Content communities o Social-networking sites o Virtual game worlds o Virtual social worlds • Functional building blocks of social media o Identity o Conversations o Sharing o Presence o Relationships o Reputation o Groups • Social media are distinct from industrial or traditional media o Inexpensive and accessible • Differences between social and industrial media o Reach – social reaches more people o Accessibility – social media is public, industrial is government or privately owned o Usability – industrial requires special skills and training o Immediacy – long time lag between communications produced by industrial media o Permanence – industrial media cannot be altered once produced • Social authority is developed when an individual or organization establishes themselves as an “expert” in their given field or area o Rise of social media is causing a loss or trust of a “person like me” and people turning to experts • Trust barometer – an international study conducted in 18 countries among opinion elites that focuses on the principles of trust in business Study question: 1. What are the 4 Ps of marketing? Why is this idea relevant to your business plan project? • Product, price, place, promotion • Important because it conveys the specifics of your products and how/where you will market it. relevant in determining important aspects of company’s factors for success. 2. What are mental models? Why is this idea especially important for marketers? • Mental models are previous formulated assumptions based on generalizations. Deeply held images and assumptions that can shape our perceptions and actions • Allows advertisers to play on mental models in order to promote their products.Markets should be aware of these assumptions to appropriately position a product so that it falls in line with the mental models of their target markets. 3. How does the small-change-large-effect theory apply to topics we have covered in this course to date? • An action can reframe the way the BPTP is done • Small-change-large-effect theory can change how stakeholders interact with the business • Can cause major revamps of quality of products 4. Compare and contrast social media with more traditional “industrial media”. What’s the same? What’s different? • Reach – social reaches more people • Accessibility – social media is public, industrial is government or privately owned • Usability – industrial requires special skills and training • Immediacy – long time lag between communications produced by industrial media • Permanence – industrial media cannot be altered once produced. industrial media provide info in a more compelling way 5. What factors influence the success of social media in marketing? Why are the “Social Media ROI Pyramid” and “Trust Barometer” important? • The source of the information • Number of people that see the advertisement • Very accessible advertising • Trust barometer evaluates trust in business • Social media ROI pyramid defines different measurable effects of social media Tutorial : PowerPoint Notes 12. Five-step approach to cash flow a. Opening balance b. Projected sales c. Receipts d. Disbursements (cash you need to spend) e. Summary (cash available for next month) 13. Single bottom line vs. TBL accounting a. TBL broadens the definition of a company’s performance from a financial profit figure to include social and environmental measures of success i. Financial – profits, shareholder value ii. Social – safety, human rights iii. Environmental – pollutant releases, energy consumption Readings: • Understanding Financial Statements • The Accounting Equation • Assets = Liabilities + Owners Equity • Assets : what a company owns • Liabilities : what companies owe. • Owners equity : represent claims of owners against the business. • Double Entry Accounting • each entry must have offsetting debits and credits • Debits increase assets or decrease claims on assets ( Includes expenses) • Credits increase claims on assets or decrease assets ( Includes revenues) • Debits listed first, then credits • Revenues and Expenses • Revenues = credits that increase owners equity. • Expenses = debits that decrease owners equity. • Also think of them as expired assets • Balance Sheet: • details what a company owns and claims against on a particular date • Must balance • Items listed in order of liquidity • Valuing items – lower of cost or market value • Income Statement: • Shows firms revenues, expenses, taxes for a specific period. • EPS = earnings per share, represents a companies bottom line, calculated by taking net income and dividing it by # of shares. MGMT 1000 Notes Week 6 Lecture PowerPoint Notes • Review of last week (week 5): 6 types of social media: collaborative projects (Wikipedia), blogs and microblogs (Twitter), content communities (Youtube), social networking sites (Facebook), virtual game worlds (World of Warcraft lol), and virtual social settings (Second Life). • Lots of people trust applications, products, etc. (discussion about selling personal information to advertisers) • Key ideas of the lecture: Linear thinking in situations where it does not apply, vicious/virtual loops, Corporate Social Responsibility (CSR). • Profit motive is a big source of vicious loops • "While CSR does not have a universal definition, many see it as the private sector’s way of integrating the economic, social, and environmental imperatives of their activities. As such, CSR closely resembles the business pursuit of sustainable development and the triple bottom line". • Social Entrepreneur: It is about applying a unique, practical, innovative and sustainable approach to benefit society in general, with an emphasis on those who are marginalized and poor Guest Speakers about social entrepreneurship (probably not a complete and reliable set of notes, I found this really boring): Russ Mcleod - Chief Operations Director, Me to We - social enterprise: produce products, opportunity to use business model to raise funds from people, companies willing to provide. - Me to We, sister of Free the Children - give speeches, leadership training, relief items/funds Elisha Muskat - Ashoka Canada - Ashoka is a small global group, 72 countries, lots of volunteers - Convince companies for example to print on recycled pap (paper) o education: a loop: what the superintendent and president and governor want, how the factors come together in a not very good system o MBA and a course in public policy at Schulich o Course on complexity o Volunteered at Ashoka; 4 diff roles, now exec director. o Ashoka: Social entrepreneurship, what change-makers are , people who are revolutionizing fishing and other industry, conviction that people who are social entrepreneurs will change the world by understanding problems o Bring in baby: to teach emotional literacy and empathy (one teacher did this). o Need interns with entrepreneurial spirit Norm Tasevski - Venture Deli Co - Founder - launch companies in large scale that will help world - listens to entrepreneurs who look to make the world a better place, tries to help them with funds and such - ambiguity comes with being an entrepreneur, people change models at least once or twice to achieve success o Helped launch companies that have social conscience o Began with undergrad in political science and philosophy o Hated business, but did MBA at Schulich o Ministry of social services; got up to Senior advising level o Took a month off, then quit o Consulting work; diversifying revenue, getting away from donation model o Imperio consulting firm o Mars – commercializing .. (social innovation generation dept.) o Venture Deli: o entrepreneur: you don’t know what you will do the next day o The business will change 3-4 time before sticking in the market o Advice: Keep persevering Robert Keen - CEO, Trees Ontario - enhance forest landscape in southern Ontario, we are losing environment - gets partners and companies to provide funding and increase funding (advertise almost) - gov funded $20-30 mill trees yearly, now funding is lower - used to work with corporations to improve CSR, help them look greener - env. concern is lower now compared to 10 years ago - work to re-build trust between consumers and green image companies o Mandate: to increase healthy lands? o Focus: plant trees o Registered prof. forester o Worked at consulting company o Contract to plant over 1000 000 trees o 3 mill. trees planted o Need to plant over a billion trees to have sustainable levels o Get corporations and govts engaged in this mission o Used to be very little interest in the environment o Everything gone green – but trust went down because of consumer confusion o Mission: to build the trust back up Jane Gilbert -
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