Strategic HRM Flashcards
Incremental Budget
Utilising the prior budget as the basis for new funding
Formula Budgeting
Overall cost applied to calculate increases in the next budget
Zero-based Budgeting
New budget starts at zero and all expenditures are budgeted.
Operating Budget
Budget focuses on the income statement and its supporting components and schedules
Capital Budget
A budgeted plan to finance long-term assets, such as facilities and equipment.
The cost is normally written off or depreciated over a number of fiscal periods.
Balance sheet
Accounting report showing the financial position of an organisation
Income statement
Explanation of revenues, expenses, and profits over a period of time.
Accounts payable
Money the organisation owes to vendors or suppliers
Accounts receivable
Money customers owe the organisation
Gross profit
The difference between cost of goods sold and sales
Return on investment (ROI)
Benefits of a project (over a set period of time) divided by the amount invested in the project
Centralised organisational structure
Decisions made by upper management (corporate head quarters)
Decentralised organisational structure
Decisions made by lower levels of authority
Functional organisational structure
Organisational chart arranged by function/department (traditional)
Divisional organisational structure
Organisational chart separated by product, market, group, region, etc
Customer based organisational structure
Organisational chart based on customer needs
For example: wholesale sales, retail sales, international sales, etc
Matrix organisational structure
Hybrid organisational structure in which individuals from different functional areas are assigned to work on a specific project or task
International corporation
Domestic firms that use existing capabilities to move into international markets
Multinational enterprise (MNE)
A business having operating units located in foreign countries
Economic system
The social institutions which deal with the production, distribution, and consumption of goods and services in a particular society.
Capitalist/Market Economy
A competitive market where private owners carry out activities to make profits
Socialist/Command Economy
Production resources are owned by the state and production decisions are centrally controlled
Transition Economies
Countries in the process of changing from a Government controlled economic system to a capitalist system. Czech Republic, Hungary, Poland, Russia
Mixed economy
Combines aspects of capitalist and socialist economies
Health care and education may be run by the state
Business may be left to private ownership
Examples are Sweden, France, Denmark, Italy and India
Developed countries
Countries with mature economies, high gross domestic product (GDP) and international trade and investments.
Developing countries
Countries with economies that have grown extensively in the past two decades. (Hong Kong, Singapore, South Korea and Taiwan)
Less developed countries
The poorest nations - may have unstable political regimes, high unemployment, and low employee skills.
Global economy
People, skills, goods, services and ideas freely move across geographic borders
Participation strategies
Options organisations have for entering foreign markets
Stages of globalisation (Bartlett & Ghoshal)
Importing and exporting
Multi national enterprises
Global organisation
Importing and exporting
Buying and selling goods and services with organisations in other countries
Passive exporter
Foreign orders are treated and filled like domestic orders
Indirect exporter
An intermediary organisation is used to provide the knowledge and contacts necessary to sell in other countries
Direct exporter
Exporters make direct contact with customers in the foreign market
May have branch offices, sales representatives, distributors, or retailers in the foreign market
Foreign subsidiary
Sub unit of the multi national organisation that is located in another country
Sales subsidiary
Branch sales office in foreign market country
Mini-replica subsidiary
Small version of the parent organisation
Uses the same technology and products the same products
Maquiladoras
Mexican assembly plants owned by international companies to take advantage of the abundant labour supply and low wages
Most are owned by American, Japanese and Korean manufacturers
International Division
Responsible for overseeing foreign subsidiaries, managing exports, and international sales
Off-shoring (global sourcing)
The relocation of business processes (including production/manufacturing) to a lower cost location, usually overseas
Social dumping
The movement of work from one region to another where labour costs are more attractive to MNEs
In-shoring
The relocation of foreign business processes to the United States
Licensing
Contractual agreement between a domestic licensee and a foreign licensee
Foreign licensee provides royalties to the domestic licensee
Easiest lowest cost least risky way for companies to go international
International franchising
Domestic franchisor grants comprehensive licensing agreement to foreign franchisee for the use of the whole business operation
Contract manufacturers
Local foreign firm produces the international company’s product to be sold in its local market or other markets
Turnkey operation
Multi national organisation makes a project fully operational and trains local managers and workers before the foreign owner takes control
Greenfield venture
Starting a foreign operation from scratch
Born global
Organisation started with global operations from the beginning
Foreign direct investment (FDI)
Multinational organisation buys in part or in whole an operation in another country
Cross border mergers and acquisitions provide speed and access to foreign markets
International strategic alliance
Cooperative agreement between two or more organisations from different countries to participate in business activities
Shared management structure
Both parent companies contribute approximately an equal number of managers to the alliance organisation
Split control management structure
Partners share strategic decision making but at the division level, partners make decisions independently
Informal international cooperative alliance
A non legally binding agreement between international organisations to cooperate on a value chain activity
Usually limited in scope and time
Formal international cooperative alliance
An alliance with formal contracts specifying each organisations contribution to the relationship
International Joint Venture (IJV)
A separate legal entity owned by prentice organisations from different countries
Each parent organisation has an equity or ownership position in the new venture
Independent management structure
Independent joint venture (IJV) managers have nearly complete decision making autonomy
Dominant parent
The majority owner of a strategic alliance, or major contributor of critical resources, controls or dominates strategic and operational decision making
Elephant and any complex
A strategic alliance where the international partner organisations are greatly unequal in size
Anchor partner
An international strategic partner that hinders the development of a successful strategic alliance because it will not or cannot provide its share of the funding
Global integration strategy
Strategy management and operations which take place in many different locations are integrated into production of goods and services to deliver value to clients worldwide
Global local dilemma
Choice between a local responsiveness or global approach to foreign markets
Global integration solution
Conducts business the same throughout the world regardless of individual markets
Local responsiveness solution
Responds to the unique needs of the markets in each country
Multi national or multi domestic strategy
International strategy through which the organisation seeks big global efficiency and local responsiveness
Strategic and operating decisions are decentralised to the business unit in each country
Transnational corporation
Firm that attempts to balance local responsiveness and global scale via a network of specialised operating units
The next step from a multinational enterprise
International organisation
Federation of local firms tightly controlled through sophisticated management systems and corporate staffs
Global organisation
Corporation having business units in a number of countries
Localisation
Turning sensitivity to local conditions into competitive advantage
Think globally act locally
Business strategy in which multinational corporations are encouraged to build local roots
Ethnocentric orientation
Organisations headquarters maintains strong control over international operations
Geocentric/global orientation
Organisation seen as a single international business
Polycentric orientation
Each subsidiary is treated as its own entity
Each country level operation is treated separately for HRM purposes
Regio centric orientation
Organisation with more coordination within region than with headquarters
Region wise HRM policies are adopted
Multinational human resources management orientation or philosophy
Ethnocentric
Geocentric / global
Polycentric
Regiocentric
Cost leadership strategy
Organisational strategy to satisfy consumer needs for quality low cost products and services
Product differentiation strategy
Organisational strategy to satisfy the customers desire for unique products and services
Organisation life cycle
A business model which proposes that over the course of time business firms move through a fairly predictable sequence of developmental stages.
Strategic planning
The process of identifying organisational objectives and the actions needed to achieve the objectives
Mission
The basic purpose of the organisation
Vision
What the organisation will look like in the future
Values
What the organisation holds in high regard that governs its operations
Goals
End result that the organisation wishes to achieve in support of its mission, usually long term
Objectives
Major initiatives that the business will take on to achieve each goal, usually short term
Should be actionable and measurable
Critical success factors (CSF)
Those activities that an organisation must perform extremely well in order to achieve its mission, goals and objectives
Supply chain (value chain)
The distribution channel of a product from its sourcing to its delivery to the end consumer
Upstream functions
From the provider to the customer
For example marketing efforts to sell the product
Downstream functions
From the customer to the provider
For example, requesting a product from the supplier
SWOT analysis
A process for auditing the overall strategic position of an organisation and its internal and external environment
Core competency
Organisational capabilities or strengths what an organisation does best that differentiates it from competition
Forecasting
Estimating the likelihood of an event taking place in the future, based on available data from the past
Environmental scanning
The practise of monitoring a business’s external environment for changes that pose threats or opportunities for the business
Economic environment
An analysis of the global market focuses on the nature and direction of the economy in which an organisation is in or wishes to compete in
Political and legal environment
An analysis of the global market focuses on the effects of global governmental policies on an organisations competitiveness
Socio - cultural environment
An analysis of the global market concerned with a society’s cultural attitudes and values
Balance scorecard
A management tool that provides a concise picture of the overall organisation in four quadrants
Financial
Customer perspective
Internal processes
Learning and innovation
Gross domestic product (GDP)
The value of the national goods and services produced excluding the value of net income earned abroad
Consumer price index
An index measuring the change in the cost of a typical wage earners purchases of goods and services expressed as a percentage of the cost
Disposable income
The amount of money consumers have available to spend after taxes have been paid
Disposable income
The amount of money consumers have available to spend after taxes have been paid
Inflation
An increase in the volume of money and credit relative to available goods and services resulting in a continuing rise in the general price level
Deflation
A contraction in the volume of available money or credit that results in a general decline in prices
Globalisation
The worldwide economic integration across borders hat allows businesses to expand beyond their domestic boundaries
Global HRM GHRM
The development of global HR strategies to support the organisations short and long term business goals and corporate values
Shared service centre
HR department serves as a professional services or consulting unit with pockets of expertise that a client units draw on to function effectively and profitably
Cost benefit analysis
The process of assessing and comparing both the costs financial costs resources needed etc and the benefits of a course of action in order to determine if it is a desired course of action
The Lexus and the olive tree
The tension between modern technological progress (the Lexus) and deep rooted cultural tradition (the olive tree)
Kurt lewis theory of change
Unfreeze
Move
And refeeeze
Stages of reaction to change by daryl r Connor
Denial Anger Neutral Depression and Acceptance
Social responsibility
An organisations long term investment in causes that do good in society while enhancing the company’s image/reputation with the company
Budget
An estimate of the income and expenses needed to carry out programs for a specific period of time.
