INST 335

INST 335 Organizational ecosystem An organizational ecosystem is a system formed by the interaction among a community of organizations in the environment. The ecosystem includes the task (customers, competitors, suppliers) and general environments (sectors that have an indirect influence on the organization- technology, politics, international laws) Corporate culture Corporate culture: set of key values, beliefs, understandings, and norms that members of an organization share: Symbols, Stories, Heroes, Slogans, Ceremonies Invisible vs visible corporate culture -Visible culture: culture that can be seen at the surface level (artifacts, such as dress, office layout, symbols, slogans, ceremonies) -Invisible: Deeper values are shared understandings held by organization members (expressed values, such as "The HP way", underlying assumptions and deep beliefs, such as 'people here care about one another like a family' Porter's 5 forces: A framework for analyzing competition of a business 1. Threat of entry 2. Bargaining power of customers 3. Rivalry among existing competitors 4. Threat of substitutes 5. Bargaining power of suppliers Define a cultural leader and explain the tools that a cultural leader uses to create a high-performance culture. High performance culture is based on a solid mission/ purpose. Leader example: Steve Jobs?? Openness and trust- gain trust of followers, manage differences- if issues arise then to handle it efficiently, focus on goals/culture/beliefs Define globalization Globalization: the extent to which trade and investments, info, social and cultural ideas, political cooperation flow between countries. How is Globalization creating a borderless world for today's managers. Globalization is creating a borderless world because countries, businesses, and people become increasingly interdependent Discuss how the international landscape is changing, including the growing power of China, India, and Brazil. -Managers look at China, India, and Brazil as sources of lower cost technological and scientific brain power. This is why many companies try to expand to these countries first when going international. -China: Outsourcing is probably the most widespread approach to international involvement in China and China is strong in manufacturing -India:India is a rising power in software design, services, and precision engineering. -Brazil:The Brazilian government has initiated major investments in the development of infrastructure such as highways, ports, and electricity projects Describe the characteristics of a multinational corporation. Multinational corporations have the resources to reach and serve the world's poorest people who cannot afford the typical products and services offered by big companies. A multinational corporation (MNC) is an organization that receives more than 25% of its total sales revenues from operations outside the parent company's home country and has a number of distinctive managerial characteristics. Explain the bottom of the pyramid concept. -The bottom of the pyramid (BOP) concept proposes that corporations can alleviate poverty and other social ills, as well as make significant profits, by selling to the world's poor. -Multinational corporations have the resources to reach and serve the world's poorest people who cannot afford the typical products and services offered by big companies. -Nestlé SA is a good example of a multinational corporation Define outsourcing and the three common market entry strategies: exporting, licensing, and direct investing. -Exporting : is a strategy in which the corporation maintains its production facilities within the home nation and transfers its products for sale in foreign countries. -Outsourcing : means engaging in the international division of labor so that work activities can be done in countries with the cheapest sources of labor and supplies. -Licensing: which the corporation (the licensor) in one country makes certain resources available to companies in another country (the licensees). -Direct investing: (also called greenfield venture) market-entry strategy in which the organization is directly involved in managing its production facilities in a foreign country Indicate how dissimilarities in the economic, sociocultural, and legal political environments throughout the world can affect business operations. -Economic: Infrastructure, resource and product markets, and economic interdependence -Sociocultural: social values, power distance, uncertainty avoidance, individualism and collectivism, masculinity and femininity, short/long term orientation -Legal-political: political risk, government takeovers, tariffs, quotas taxes, terrorism, political instability, laws and regulations. Define cultural intelligence Cultural intelligence is a person's ability to use reasoning and observation skills to interpret unfamiliar gestures and situations to devise appropriate behavioral responses. why is it important for managers to develop their cultural intelligence? It is necessary for managers working in foreign countries to have cultural intelligence so that they are culturally flexible and able to adapt easily to new situations and ways of doing things Explain the concept of organizational mission and how it influences goal setting and planning. Mission is the organization's reasons for existence. The mission describes the organization's values, aspirations, and reasons for being. A well-defined mission is the basis for development of all subsequent goals. Without a clear mission, goals and plans can't be developed and the company won't be able to reach its target. Categorize the types of goals an organization should have. The four key areas that contribute to a firm's long-term success are learning and growth, internal processes, customer service, and financial performance. (look at image in google doc. ch 7 #3) What is a strategy map? a visual representation of the key drivers of an organization's success, showing the cause- and-effect relationship among goals and plans Explain how managers use strategy maps to align goals. Managers use a strategy map to align goals. It provides a powerful way for managers to see the cause-and-effect relationships among goals and plans. Define the characteristics of effective goals. -They're specific and measurable, -Have a defined time period -Challenging but realistic - Cover key result area linked to rewards What is MBO (Management by Objective? a system whereby managers and employees define goals for every department, project, and person and use them to monitor subsequent performance Outline the four essential steps in the management-by-objectives (MBO) process. 1. Set goals 2. Develop action plans 3. Review Progress 4. Appraise Performance Single-use plans Single-use plans are developed to achieve a set of goals that are likely to be repeated in the future. Standing Plans Standing plans are ongoing plans that provide guidance for tasks or situations that occur repeatedly within the organization. Benefits and limitations of Planning ~Benefits: -Provide motivation and commitment -Guide resource allocation -Guide to action -Set a standard of performance ~Limitations: -Create false sense of certainty -Cause rigidity in a turbulent environment (locks the organization into specific plans/ time frames) -Goals and Plans get in the way of intuition and creativity Contingency planning Contingency plans: identifies important factors in the environment and defines a range of alternative responses to be taken in case of emergencies/ unexpected conditions. Scenario building Scenario building:approach where managers look at current trends and discontinuities and imagine possible alternative futures to build a framework within which unexpected events can be managed. Crisis plans Crisis plans: enables companies to cope with unexpected events that are so sudden and devastating that they have the potential to destroy the organization if managers aren't prepared with a quick and appropriate response Identify innovative planning approaches that managers use in a fast-changing environment Contingency plans, scenario building, crisis plans Define the components of strategic management and discuss the three levels of strategy. -Strategic thinking: to take the long-term view and to see the big picture, including the organization and the competitive environment, and consider how they fit together -Strategic management: the set of decisions and actions used to formulate and execute strategies that will provide a competitively superior fit between the organization and its environment so as to achieve organizational goals -Competitive advantage: what sets the organization apart from others and provides it with a distinctive edge for meeting customer or client needs in the marketplace. Three levels of strategy::: Corporate-level strategy-the organization as a whole and the combination of business units and product lines that make up the corporate entity Business-level strategy- each business unit or product line Functional-level strategy -the major functional departments within the business unit Explain the strategic management process Begins when executives evaluate their current position with respect to mission, goals, and strategies. They then scan the organization's internal and external environments and identify strategic issues that might require change Summarize how SWOT analysis can be used to evaluate a company's strengths, weaknesses, opportunities, and threats. SWOT analysis: A careful assessment of the strengths, weaknesses, opportunities, and threats that affect organizational performance. S- Strength W- Weaknesses O- Opportunities T-Threats What are the 3 approaches to corporate-level strategy?