Chapter 6 Managing the business enterprise

Question 1

What is the management process

Answer 1

1. Planning
2. Organizing
3. Leading
4. Controlling

Question 2

Management efficiency vs effectiveness

Answer 2

Efficiency- achieving the greatest level of output with a given amount of input.
Effectiveness- achieving goals that have been set.
efficiency means doing things right, whereas effectiveness means doing the right things.

Question 3

Planning

Answer 3

Setting goals and planning how to achieve them
- Planning timing of promotions and new products
- thinking of ways to achieve annual revenue goals
- planning for emergencies

Question 4

Organizing

Answer 4

Organizing how you are going to achieve the goals
- ordering ingredients
- planning employee shifts and breaks
- delegating tasks
- inventory management

Question 5

Leading

Answer 5

Motivating and guiding employees
- advice to employees
- inspire and motivate employees (leading by example)
- training employees on how to treat customers

Question 6

Controlling

Answer 6

Monitoring performance to make sure on the right track to meet goals.
- review customer service surveys (evaluating and doing something to achieve objective)
- Checking product quality
- addressing issues in the business

Question 7

What is strategic management

Answer 7

Setting goals and then coming up with strategies to achieve these goals

Question 8

Vision (purpose) vs mission statement

Answer 8

Vision - A statement indicating why an organization exists and what kind of organization it wants to be.
Mission statement - An organization’s statement of how it will achieve its purpose in the environment in which it conducts its business.

Question 9

SMART goals

Answer 9

Specific
Measurable
Achievable
Results - oriented
Time-framed

Question 10

Strategy formulation

Answer 10

1. Set strategic goal
2. Analyze organization and environment
   (looking internally at companies strengths and weaknesses)
3. Match the organization and the environment
   (leverage strengths and take advantage of opportunities)

Question 11

different levels of strategy

Answer 11

Corporate - identifies the various businesses a company will be in and how they will relate to each other.
Business (competitive) - identifies the ways a business will compete in its chosen line of products or services
Functional - identify the basic courses of action each department will pursue so that it contributes to the business’s overall goals.

Question 12

Corporate level strategies

Answer 12

Concentration, Growth, Integration, Diversification, Investment Reduction

Question 13

Concentration and growth strategies

Answer 13

Corporate level strategies
Concentration - Focusing on one product or product line
Growth - market penetration, geographic expansion and product development

Question 14

Integration strategy

Answer 14

horizontal - acquiring control of competitors in the same or similar markets (acquisition of Instagram by Facebook)
vertical - owning or controlling the inputs to the firm’s processes or the channels through which the products or services are distributed (Starbucks, has control over every supply chain process)

Question 15

Diversification strategy

Answer 15

Diversification - spreading risk among several products or markets.
Related - adding new, related products or services to an existing business
Conglomerate diversification - new products/ markets not related

Question 16

Investment Reduction Strategy

Answer 16

Reducing the company’s investment in one or more of its lines of business
Retrenchment - reduction of activity or operations
Divestment - selling or liquidating one or more of a firm’s businesses

Question 17

Business Level Strategies

Answer 17

Cost Leadership - offering lowest cost products (walmart)
Differentiation - offering something unique to their customers (volvo - safety, apple - user friendly)
Focus - focusing on one market segment and being the best in that segment (lululemon focusing on the niche market of yoga apparel)

Question 18

Functional strategy

Answer 18

Each business level strategy is transformed into functional level strategies to achieve the overall goals of the company
Walmart - Cost reduction strategy
- distribution department pursued a functional strategy of satellite-based warehousing that ultimately drove distribution costs below those of its competitors.

Question 19

What areas do managers work on

Answer 19

marketing, finance, operations, human resources, and information

Question 20

5 basic management skills

Answer 20

Conceptual
Time-management
Human relations
Decision making
technical

Question 21

types of strategies

Answer 21

strategic -
tactical -
operational-

Question 22

Strategic strategy

Answer 22

top management. reflect decisions about resource allocations, company priorities, and the steps needed to meet strategic goals

Question 23

Tactical strategy

Answer 23

involve upper and middle management. shorter-range ones concerned with implementing specific aspects of the company’s strategic plan

Question 24

Operational strategy

Answer 24

middle and lower management - short-term targets for daily, weekly, or monthly performance