test 2 Flashcards
In regards to Contemporary Control:What is the difference Between Effectiveness and Efficiency?
Effectiveness (doing the right thing) refers to the “Informational Control Process” while Efficiency (Doing things right) refers to Behavioral Control
In Organizational Culture what are the 3 Shared things of Organizational Culture?
Values (what’s important)
Beliefs (how things work)
Behavior (how things are done)
What are the 4 Types of Culture from the Culture Chart?
- Global-
- SubGroup Culture- National, Culture, Gender, Ethnic groups, Occupational
- Organizational Culture- Beliefs, Values, Behavior
- Sub- Unit Cultures- Departments Cliques
What are the two types of control? (Governance)
Corporate Governance and External Governance
What parties are involved in Corporate (internal) governance?
Board of Directors, Management, Shareholders
What are the 5 Components of External Governance?
- Market (Possible Takeover)
- Government Agencies
- Auditors
- Banks & Stock Analysts
- Media & Public Activists
What are two reasons why management needs to be controlled?
- Shirking- Not working to max capability
2. On the job consumption (excessive)
What are the 3 Distinct Tools of Behavioral Control?
- Boundaries (rules & regulations)
- Rewards or Incentive- (be fair)
- Culture
What are the 4 Steps of the Traditional Control Process and why isn’t it very effective?
Strategy -> Implementation Strategies -> Control
(goal)
^————Feedback——————-
It’s not very effective because feedback is given only after a strategy has been implemented so it could be too late.
What are the 3 methods of Market entry for an Entrepeneur?
- Pioneering (no one has done it)- young firm with radical new product or innovative service
- Imitative- Firm introduces existing product or service to the market (i.e. Franchises)
- Adaptive- Productive or service that is somewhat new or a new set of consumers
What are some of the Pitfalls of the “Pioneering” method of market Entry?
- The market may not be open to it
- competitors could copy it
- sustaining an idea could be costly
What are the 5 Methods of Global Entry?
(From least cost and risk to most)- Knowing the Order is important!
- Exporting- Maintains its production in home and sells its products abroad
- Global Outsourcing (offshoring)- Produces non-key elements- international division where there is cheapest labor and supply
- Licensing (contract)- Between Licensor and Licensee
- Franchising- Between franchisor and franchisee
- Joint Venture- Strategic Alliance between 2 companies that collaborate to form a 3rd company
- Wholy Owned Affiliates- Built from scratch
What is the Difference between a Licensor and a Licensee
Licensor-sells certain aspects of the business to the licensee - like the trademark and name
Licensee-Keeps their own identity (ex. Budweiser owns Labatt)
What is the difference between a Franchisor and a Franchisee
The Franchisor- Sells the entire business
The Franchisee- Loses Identity
What were some of the Key Cultural observations in the Hexaflexagon Experiment?
- When people talk about different Cultures they talk about the differences not the similarities
- Differences are negatives
- Cultural patterns and protocols are are not universal
- Non Verbal communication is more powerful
- Our (your) language is superior
- Stereotyping in inevitable
- Language helps with understanding cultures
What is CEO Duality?
When someone is both the CEO of a company as well as a Board Member for the Company
What are the two principal means to Create Synergy?
Corporate Level Strategy Decisions and Diversification Activities
What is Related Diversification and what are the two Integration types?
Related Diversification- moving from core activities in a specific market into other markets and related activities
Horizontal Integration- Firm operates similar stages of the value chain (i.e. auto parts assembly)
Vertical Integration- Expansion or extension of the firm by integrating Processes
What is the Difference Between Backward and Forward Vertical Integration Types
Backward Integration- Controls the subsidiaries that create the raw materials of supplies
Forward Integration- Controls Distributors where its products are sold
In Horizontal Integration what is the Difference between Concentric and Conglomerate?
Concentric- Highly related products/businesses
Conglomerate- Unrelated
What are the 4 Components of the BCG matrix?
Star (High Growth, High Mkt Shr)- are the market leaders, future gold mine
Question Mark (High Growth, Low Mkt Shr)- the followers, grow rapidly, consume a lot of cash but don’t bring it in
Dogs (Low Growth, Low Mkt Shr)- they breakeven, contribute to overall synergy, don’t win money
Cash Cow (Low market Growth, High Mkt Shr)- very stable
What are the Keys to Opportunity Evaluation?
in order to decide if its a valuable contender
- Attractiveness
- Is the opportunity Achievable? (practically and Physically)
- Doable- Attractive long enough between conception to its production
- Value Creating?- More Benefits than cost
What are three things an Entrepenurial Leader must have
- Vision
- Drive
- Commitment
What is the SBA?
The Small Business Administration is a Government Agency that provides support to Entrepeneurs and Small Businesses
What is the Definition of Organizational Culture?
The beliefs and behaviors that determine how a company’s employees and management interact and handle outside transactions. Dress code, business hours, benefits are also reflected
In regards to Diversification: What is meant by Economies of Scope?
Cost savings from leveraging core competencies or sharing related activities among businesses in the corporation
What are Examples of Leverage or reuse key resources?
- Favorable reputation
- Expert Staff
- Management Skills
- Efficient purchasing operations
- Existing manufacturings facilities
What are the two principal means to create synergy through market power?
-Pooled negotiating power
-Vertical Integration
(government regulations may restrict this power)
What are some of the benefits of unrelated diversification through vertical relationships?
- Parenting and restructuring of businesses
- allocate resources to optimize (profitability, cash flow, growth)
- appropriate human resources practices
- financial controls
What is Corporate Parenting?
Parenting- creating value within business units
- experience of the corporate office
- support of the corporate office
What are some of the factors affecting a nations competitiveness?
- Factor endowments
- Demand conditions
- Related and supporting industries
- Firm strategy, structure, and rivalry
What are some motivating points for company to pursue international expansion?
- Increase size of potential markets
- take advantage of arbitrage
- extend a product’s life cycle
- optimize the location of value chain activities
- explore reverse innovation
What are some of the risks involved with a company pursuing international expansion?
- Social Unrest
- Military turmoil
- Demonstrations
- Violent Conflicts and terrorism
- Laws and their enforcement
What does entrepeneurship mean? and what are ways value can be created?
Entrepeneurship- New Value Creation
- Start Up Ventures
- Major Corporations
- Family-owned businesses
- Non Profit Organizations
- Established institutions
What is the major challenge for an Entrepeneurial firm? and list some examples
The major challenge for an Entrepeneurial firm is lack of resources:
- Money
- Human Capital
- Social Capital
What are some financial resources considered for the early stages of Entrepeneurship?
- Personal savings, family, and friends
- Bank financing, public financing, venture capital (debt,equity)
NEED TO ASK FOR MONEY!
What are Competitive Dynamics?
Reflects ongoing need for competitive intelligence to:
- identify threats from competitors
- identify opportunities from competitors
What is considered the “Contemporary approach” to strategic Control
Formulate strategies Implement Strategies
Info ctrl ^ ^ behv ctrl
Strategic Control
What are the keys to creating a strong and effective culture?
Set Implicit Boundaries (unwritten standards of acceptable behavior) Such as:
- Dress
- Ethical matters
- The way an organization Conducts its business
What is means by Motivating with Rewards and Incentives?
- Powerful means of influencing an organizations culture
- Focuses efforts on high-priority tasks
- motivates individual and collective task performance
- can be an effective motivator and control mechanism
What do we mean when by setting boundaries and constraints?
-Focus on strategic priorities
-Provide short-term objectives and actions plans:
specific and measurable
specific time horizon for attainment
achievable but challenging
