business courses review. 1–2 © 2013 cengage learning. all rights reserved. may not be copied,...

Business Courses Review

1–2© 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated,

in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

1.1 Management in Organizations

© 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

2–3

2.4 An Integrative Framework of Management Perspectives



3.1 The Organization and Its Environments



3.2 McDonald’s General Environment



3.3 McDonald’s Task Environment

McDonald’s

Competitors• Burger King• Wendy’s• Subway• Dairy Queen

Customers• Individual

consumers• Institutional

customers

Suppliers• Coca-Cola• Wholesale food

processors• Packaging

manufacturers

Strategic Partners• Wal-Mart• Disney• Foreign partners

Regulators• Food and Drug

Administration• Securities and

ExchangeCommission

• EnvironmentalProtectionAgency

Internal environment

Task environment

Porter’s Five Competitive Forces• Threat of new entrants

– Extent to and ease with which competitors can enter market.

• Competitive rivalry– The nature of the competitive relationship between firms in an industry.

• Threat of substitute products– Extent to which alternative products/services may replace the need for

existing products/services.

• Power of buyers– Extent to which buyers influence the suppliers of goods and services.

• Power of suppliers– Extent to which suppliers have the ability to influence buyers of their

goods and services.


3–7



4.5 Approaches to Social Responsibility

Social Responsibility Approaches• Obstructionist Stance

– Do as little as possible (ex. – PCA). • Defensive Stance

– Do only what is legally required and nothing more (ex. – tobacco companies).

• Accommodative Stance– Meet legal and ethical obligations and go beyond that in selected

cases.• Proactive Stance

– Organization views itself as a citizen and proactively seeks opportunities to contribute to society (ex. – McDonald’s).

4–9

http://www.foodsafetynews.com/2013/02/pca-executives-indicted-for-fraud-conspiracy-in-salmonella-peanut-butter-outbreak/

4–10

4.4 Arguments for and Against Social Responsibility

4–11

4.6 How Business and the Government Influence Each Other

The Meaning of International Business

• Domestic Business– acquires all of its resources and sells all of its products or services

within a single country.

• International Business– is based in a single country yet acquires a meaningful share of its

resources and/or revenues from other countries.

• Multinational Business– transcends national boundaries and buys raw materials, borrows

money, and manufactures and sells its products in a world-wide marketplace.

• Global Business– transcends national boundaries and is not committed to a single home

country.

5–12

Managing the Process of Globalization


5–13

• Importing and Exporting Exporting – creating a product in the firm’s domestic marketplace

and selling the same product internationally. Importing – bringing a product created in another country into the

firm’s domestic marketplace.

• Licensing A contractual arrangement where a firm allows another firm to use its

brand name, trademark, technology, patents, copyrights, or other assets in return for royalties (fees).

Managing the Process of Globalization


5–14

• Strategic Alliance – where two or more firms jointly cooperate for mutual gain Joint Venture – a type of strategic alliance where the firms share

ownership of a new enterprise.

• Direct Investment – where a firm headquartered in one country builds or purchases facilities or subsidiaries in another country. Maquiladoras – light assembly plants built in Mexico near the U.S.

border – owned by major corporations, exploit tax breaks given by the Mexican government to employ workers at low wages to encourage foreign direct investment.


5–15

5.4aIndividual Differences Across Cultures


5–16

5.4b Individual Differences Across Cultures


5–17

5.4c Individual Differences Across Cultures


7–18

7.1 The Planning Process

Kinds of Organizational Plans (Con’t)• Strategic Plans – general plans outlining decisions

of resource allocation, priorities, and action steps necessary to reach strategic goals

• Tactical Plans – tactical plans provide an outline for how to accomplish objectives, rather than deciding what need to be done

• Operational Plans – detail how specific task are to be accomplished



Strategic Alternatives

Business-level strategy

Functional-level strategy

Operations-level strategy

Corporate-level strategy

Business-level strategy

Functional-level strategy

Operations-level strategy

Market A Market B


8–20

Types of Strategic Alternatives

• Corporate-Level Strategy– The set of strategic alternatives that an

organization chooses from as it manages its operations simultaneously across several industries and several markets.

• Business-Level Strategy– The set of strategic alternatives that an

organization chooses from as it conducts business in a particular industry or a particular market.


8–21


8–22

8.1 SWOT Analysis

SWOT Analysis and Strategy• Evaluating Organizational Strengths

– Organizational strengths• are skills and abilities enabling an organization to conceive of and implement

strategies.– Competitive parity exists when a large number of competing firms are able to

implement the same strategy

– Common organizational strengths• are organizational capabilities possessed by numerous competing firms.

– Distinctive competencies• are unique to one firm or a small subset of competitors, are useful for competitive

advantage and superior performance.

– Imitation of distinctive competencies• Strategic imitation is the process of duplicating another firm’s distinctive

competencies


8–23

SWOT Analysis and Strategy (cont’d)• Evaluating Organizational Strengths (cont’d)

– Sustained competitive advantage• occurs when a distinctive competence cannot be easily

duplicated.• is what remains after all attempts at strategic imitations cease.

– Strategic imitation of a distinctive competence is difficult when:

• The competitive advantage is based on unique historical circumstances.

• it is difficult for competitors to understand its nature or character.

• The competitive advantage is based on a complex phenomenon (e.g., organizational culture).© 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated,


8–24

SWOT Analysis and Strategy (cont’d)

• Evaluating Organizational Weaknesses– Organizational weaknesses

• Skills and capabilities that do not enable an organization to choose and implement strategies that support its mission.

– Weaknesses can be overcome by:• investments to obtain the strengths needed.• modification of the organization’s mission so it can be

accomplished with the current workforce.

– Competitive disadvantage• occurs when an organization fails to implement strategies

being implemented by competitors.© 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated,


8–25

SWOT Analysis and Strategy (cont’d)

• Evaluating an Organization’s Opportunities and Threats– Organizational opportunities

• are areas in the organization’s environment that may generate high performance.

– Organizational threats• are areas in the organization’s environment that make it

difficult for the organization to achieve high performance.

– Opportunities and threats can be evaluated using Porter’s Five Forces model


8–26

Formulating Business-Level Strategies

• Porter’s Generic Strategies– Differentiation strategy

• An organization seeks to distinguish itself from competitors through the quality of its products or services.

– Overall cost leadership strategy• An organization attempts to gain competitive advantage by

reducing its costs below the costs of competing firms.

– Focus strategy• An organization concentrates on a specific regional market,

product line, or group of buyers.


8–27

Implementing Porter’s Generic Strategies

• Differentiation– Marketing and sales emphasize high-quality, high-value image of the

organization’s products or services.

• Overall Cost Leadership– Marketing and sales focus on simple product attributes and how these

product attributes meet customer needs in a low-cost and effective manner.

• Focus– Either differentiation or cost leadership, depending on which one is

the proper basis for competing in or for a specific market segment, product category, or group buyers.


8–28

Strategy Type Definition Examples

Prospector Is innovative and growth oriented, searches for new markets and new growth opportunities, encourages risk taking

Amazon.com3MRubbermaid

Defender Protects current markets, maintains stable growth, serves current customers

BICeBayMrs. Fields

Analyzer Maintains current markets and current customer satisfaction with moderate emphasis on innovation

DuPontIBMYahoo!

Reactor No clear strategy, reacts to changes in the environment, drifts with events

International Harvester(now doing business as Navistar)Joseph Schlitz Brewing Co.KmartMontgomery Ward(no longer in business)


8–29

8.2 The Miles and Snow Typology

Introduction MaturityGrowth

Time

Decline

Sale

s Vo

lum

eStagesHigh

Low


8–30

8.2 The Product Life Cycle

Corporate-Level Strategies

Related diversification

(synergy)

Unrelated diversification(risk/return)

Single-product strategy

(simplicity)

Strategic Choices


8–31

Becoming a Diversified Firm

Development of new products Vertical integration Merger with

another firmAcquisition of another firm

Diversification Alternatives


8–32

Emphasizing Distinctive Competencies

• Identifying Niches in Established Markets– Niches represent a market segment currently

unexploited in a market where several large firms compete.

– Niches offer a competitive advantage to small businesses.

• Identifying New Markets– Using the transfer of an existing product/service to

explore a new market.– Creating new industries/products/services.


10–33

First Mover Advantages

• First-Mover Advantage– Exploiting an opportunity before any other firm

does.• Why first-mover advantage is not taken by

larger firms:– Decisions are slowed by organizational hierarchy.– Size of the assets at risk makes large firms overly

cautious.


10–34

Structure of Entrepreneurial Organizations

• Starting the New Business– Buying an Existing Business

• Business has a proven ability to draw customers and make a profit (the business is a going concern).

• Networks (e.g., customers and suppliers) are established.

• Negative: New owners inherit any existing problems.

– Starting from Scratch• Avoids problems associated with previous owners.

• Freedom to choose suppliers, equipment, location, and workers.

• Negative: More business risk and uncertainty.© 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated,


10–35

Franchising (cont’d)

• Disadvantages– Start-up fees to purchase franchise.– Limitations of franchise (market area, product,

customers).– Loss of independence due to imposed operational

controls of franchiser.

• Advantages– Reduced financial risk of new business success

through experience provided by franchiser.– Training, financial, and management support by

franchiser.


10–36

Enforcing The Law

•Title VII•The Civil Rights Act•The Equal Pay Act•Age Discrimination Act•Americans with Disabilities Act

Executive Order 11246

EEO laws

The EEOC

Office of Federal Contract Compliance

Federal Courts

3-37

State Courts and Human Rights Agencies

May be required first step for filing Federal claims, also violations of state laws

The Vocabulary of Job Analysis

• Job specification: a written explanation of the knowledge, skills, abilities, traits, and other characteristics (KSAOs) necessary for effective performance on a given job

• Tasks: Coordinated and aggregated series of work elements used to produce an output

• Position: the responsibilities and duties performed by an individual. There are as many positions in an organization as there are employees

• Job: group of positions that are similar in their duties, such as computer programmer

• Job family: group of jobs that have similar duties

6-38

Work-Family Balance and Job Design

Work-family tension is driven by changing

workforce demographics

Work-family tension is driven by changing

workforce demographics

1. Women and single parents entering the workforce

2. Dual-career couples

3. The aging population

1. Women and single parents entering the workforce

2. Dual-career couples

3. The aging population

Some organizations meet employees’ needs

through flexible work arrangements

Some organizations meet employees’ needs

through flexible work arrangements

1. Job sharing

2. Flextime

3. Telecommuting

1. Job sharing

2. Flextime

3. Telecommuting

6-39


• The success of job sharing depends on: – Identifying jobs that can be shared – Understanding employees’ individual sharing style – Matching “partners” who have complementary

scheduling needs and skills

• With flextime, employees can choose when to be at the office– 5 days/8 hours – 4 days/10 hours – Arrive later on Monday, leave earlier on Friday

6-40


Telecommuting allows employees to work at home part- or full-time – Communication is through phone, fax,

computer – Often resisted by managers who fear

loss of control and subordinate accessibility

6-41

Fixed and Variable Costs

• Fixed costs – incurred regardless of volume of product produced

• Variable costs – costs incurred depend upon the number of units produced


Fixed Costs $20,000Variable Costs $500 per unitSelling Price $1,000 per unit

Units Sold 0 10 20 30 40 50 60 70 80 90 100 110 120

Revenues $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 $100,000 $110,000 $120,000Fixed Costs $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000Variable Costs $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 $50,000 $55,000 $60,000Profit -$20,000 -$15,000 -$10,000 -$5,000 $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000


1 2 3 4 5 6 7 8 9 10 11 12 13

-$40,000

-$20,000

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

RevenuesFixed CostsVariable CostsProfit

business courses review. 1–2 © 2013 cengage learning. all rights reserved. may not be copied,...

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