Chapter 4-6 Flashcards
Social: what are environmental forces, who do they affect , do they effect everyone the same ?
Macroenvironmental forces affect industries and individual firms within them .
The focus at this stage of analysis is on the industry, not the firm.
Certain forces are more prominent in some industries than in others.
Social: What are types of Macroenvironmental Forces
- Political-Legal forces
- Economic forces
- Social forces*
- Technological forces*
Collectively,referred to as PEST.
Social: What are example of Social Forces
Social Forces:
i. Societal values
ii. Trends
iii. Traditions
iv. Religious practices
v. Concern for the . environment
Social: What is Case #1 of social force
Social ForcesCase #1 Eating Habits
-Consumers “super size” while demanding healthier foods.
Ex: Many fast food restaurants have been “supersizing” their meal combos adding extra fries and larger drinks, while at the same time expanding alternatives for items such as grilled chicken sandwiches and salads
Social: What is Case #2 of social force
Social Forces Case #2 Automobiles
- contrary to other parts of the world demand for large vehicles remains strong in the U.S. amidst cries for greater fuel economy.
Social: What is Case #3 of social force
Social Forces Case #3 Global Concerns:
Social forces are influenced by national culture, the generally accepted values, traditions, and patterns of behavior in a society. Firms should recognize these cultural differences.
Some firms struggle because their managers consciously refer to their own cultural values as a standard of judgment, a phenomenon known as the self-reference criterion.
Social: what influences social forces
Social forces are influenced by national culture, generally accepted values, traditions, and patterns of behavior in a society.
Firms should recognize these cultural differences b/c those operating in multiple countries must address multiple sets of social forces.
How does Social force of Global Concerns affect industries
Some firms struggle because their managers consciously refer to their own cultural values as a standard of judgment, a phenomenon known as the self-reference criterion.
What is the the macroevniromental force of technological forces ?
Technological forces are
Scientific improvements & innovations such as the
internet which is arguably the most pervasive technological force affecting most industries.
Technology: what did Thomas Friedman man theorize about the world because of technology
Thomas Friedman theorized that the world is flat due to the fact that “Any activity that can be digitized and moved around will get moved around.”
Technology: How has technology impacted contact with developing nations.
telecommunications firms laid fiber optic cables across the oceans to connect the U.S. with China and India. Since the dot-com bust, these cables have provided high quality, low cost contact with developing nations,
Technology: How has strategy been impacted by the internet
the Internet plays a substantial role, critics challenge “new business models” are needed to compete in the “new economy.” Michael Porter and others argue the market forces that governed the traditional economy have not disappeared in the Internet economy.
Technology: What is the concept of aggregation and aggregation?
Large firms exist because they can perform most tasks more efficiently than they would otherwise i outsources; many progressive firms have “disaggregated” by no longer perform all of their functional activities, but instead “reaggregate” by searching for partners who can perform some of the activities more efficiently.
Technology: What are some strategic dimensions because of the internet.
Internet has influenced strategic management in specific ways. The Five Strategic Dimension of the Internet:
- Movement Toward Info Symmetry
- Internet as a Distribution Channel
- Speed
- Interactivity
- Cos Reductions and Cost Shift potential
Technology: What’s Strategic Dimension of the Internet: Movement Toward Info Symmetry
Typical markets are characterized by information asymmetry:sellers control key information that is not available to buyers. The Internet promotes information symmetry: buyers and sellers share information.
Technology: What’s Strategic Dimension of the Internet: Internet as a Distribution Channel
The Internet acts as a distribution channel for non-tangible goods and services. Consumers can purchase items (i.e. airline tickets, insurance, stocks, and computer software) online without the necessity of physical delivery.
Tehnology:What’s Strategic Dimension of the Internet: Speed
Internet offers opportunities to improve the speed of transactions and the process that leads up to and follows it.
Technology: What’s Strategic Dimension of the Internet: Interactivity
Consumers discuss their experiences with products and services .Firms can readily exchange information with trade associations that represent their industries.
Technology: What’s Strategic Dimension of the Internet: Potential for cost reductions and cost shifting
Internet provides businesses with opportunities to minimize their costs(fixed and variable) enhancing flexibility.
what are the forms of E-Commerce
Form of Electronic Commerce include : Bossines: i.B2B ii.B2C (Ex:Amazon) iii.B2G
Consumers:
i. C2B (Ex: Priceline)
ii. C2C (Ex: Ebay)
Technology: How is Electronic Commerce affecting companies
traditional firms are integrating e-commerce into their existing business models, combo known as clicks and bricks. Firms are attempting to build synergy between traditional and virtual storefronts.
Technoloyg: What is the concept of commoditization
Commoditization—Firms are having a more difficult time distinguishing their products and services from those of their rivals. buyers tend to reduce the purchase decision to a few factors (features or quality)If they cannot distinguish among the competitors view the product as a commodity and base their final purchase decision on price.
Technology: What is the concept of mass customization
Technology has enabled firms to engage in Mass Customization which is the ability to individualize product and service offerings to meet specific buyer needs.
Technology: What is environmental scanning
Environmental scanning is macroenvironmental trends the systematic collection and analysis of information about relevant . (ex: Keeping up with business trends )
Technology: what is the challenge today in environmental scanning:
challenge is making sense of the infor ; deluge of reports, press releases, statistics, etc.
Technology: what is the benefits of environmental scanning
Benefits of environmental scanning include:
i. increased general awareness of environmental changes
ii. Greater effectiveness in governmental matters
iii. effective diversification and resource allocation decisions a
what are Case Analysis Steps 7–8 Social & Technological Forces
Case Analysis Steps 7–8 Social & Technological Forces:
i. Identify the specific social (step 7) and technological (step 8) forces
ii. Specify precisely how the factors identified affect the industry.
iii. Focus on the industry, not the firm.
Who controls organization direction
Stakeholders—individuals or groups who are affected by or can influence an organization’s operations
What is organization mission
Mission is the reason for the firm’s existence
what are organization goals
Goal are desired ends toward which efforts are directed
What are organization objectives
Objectives are specific, quantifiable versions of goals
What is The Agency Problem
The agnency problem is a situation in which a firm’s managers—the “agents” of the owners—fail to act in the best interest of the shareholders.
Where is The Agency problem rooted
problem is rooted in moral hazard, when the parties in an arrangement (owners and managers) do not share equally in risks and benefits.
How is the Agency problem complicated
its complicated by adverse selection, the inability of shareholders to identify the precise competencies and personal attributes of top managers when they are hired.
What are examples of the Agency Problem
Agency Problems include:
i. Management Serves Its Own Interests
ii. Management and Stockholders Share Same Interests
what the prospective of agency problem #1 where Management Serves Its Own Interests
Perspective #1 on the Agency Problem
Executives seek to grow the firm because compensation increase with firm size.
Executives diversify the firm to increase prospects for survival at the expense of profitability.
what the prospective of agency problem #2 Management and Stockholders Share Same Interests
Perspective #2 on the Agency Problem
Due to managers’ livelihoods being directly tied to the success of the firm, they manage it in the best interest of the shareholders.
Stock options can support this perspective by “turning the managers into owners.”
What is Managerial Ethics
Managerial Ethics refers individual responsibility to make business decisions that are legal, honest, moral, and fair.
What is difficult about Managerial Ethics
Agreeing on what is “moral” and “fair” can be a difficult task
What isn’t difficult about Managerial Ethics
Agreeing on what is “legal” and “honest” may not be difficult.
What are the 6 Perspectives on Managerial Ethics
The 6 Perspectives on managerial emetics are
- Utilitarian View
- Self-Interest View
- Rights View
- Justice view
- Integrative Social contracts view
- Religious view
What is the Utilitarian Perspective on Managerial Ethics
The Utilitarian view:
Anticipated outcomes and consequences should be the only considerations when evaluating an ethical dilemma.
What is the Self-Interest Perspective on Managerial Ethics
The Self-Interest view:
Benefits of the decision-maker(s) should be the primary considerations.
What is the Rights Perspective on managerial ethics
The Rights view:
Evaluate organizational decisions on the extent to which they protect basic individual rights
What is the Justice Perspective on managerial ethics
The Justice view:
All decisions will be made in accordance with pre-established rules or guidelines.
What is the Integrative Social Contracts Perspective on managerial ethics
The Integrative Social Contracts view:
Decisions should be based on existing norms of behavior, including cultural, community, or industry factors
What is the Religious Perspective on managerial ethics
The Religious view:
Decisions should be based on personal or religious convictions.
What are the 6 Explanations for Unethical Behavior
6 Explanations for Unethical Behavior include: People: 1. Deny responsibility 2. Deny injury 3. Deny rights of victims 4. Engage in Social weighting 5. Appeal to higher values 6. Invoke the Metaphor of the ledger
Describe the explanation for unethical behavior : Deny responsibility
Individuals deny responsibility, rationalizing that they have no other choice but to participate in unethical behavior.
Describe the explanation for unethical behavior : Deny injury
Individuals deny injury, suggesting that the unethical behavior did not really hurt anyone.
Describe the explanation for unethical behavior : Deny rights of victims
Individuals deny rights of the victims, rationalizing that “they deserve what they got anyway
Describe the explanation for unethical behavior : Engage in Social weighting
Individuals engage in social weighting by making carefully controlled comparisons.
Describe the explanation for unethical behavior : Appeal to higher values
Individuals can appeal to higher values by suggesting that justification of the unethical behavior is due to a higher order value.
Describe the explanation for unethical behavior : Invoke the Metaphor of the ledger
Individuals may invoke the metaphor of the ledger, arguing that they have the right to engage in certain unethical practices because of other good things they have done.
What is social responsibility
Social Responsibility refers to the expectation that businesses should serve both society and the financial interests of the shareholders.
What is the difference between the ethics vs social responsibility
Ethics is about the individual; social responsibility is about the firm.
What are the Pros of Corporate Social Responsibility
Pros of Corporate Social Responsibility :
i. focus on the need for firms to “give back” to the community.
ii. highlights both influence and resources available to firms in terms of advertising, product development, and community involvement.
iii. generally good business and can stave off government regulation.
What are the Cons of Corporate Social Responsibility
Cons of Corporate Social Responsibility :
i. triple bottom line, firms must maintain and improve social and ecological performance in addition to economic performance
ii. firms should be active socially only when doing so enhances profits. Managers don’t know what’s in the best interest of society and they shouldn’t spend shareholder resources on giving back to society
what is Sustainable Strategic Management
Sustainable strategic management (SSM) is a broader notion of social responsibility refers to the strategies and related processes that promote superior performance from both market and environmental perspectives.
