Test 5 Flashcards
Value creation activities
production includes activities involved in creating a product
Improved quality control:
reduces costs, increases productivity, lowers rework and scrap costs, and reduces warranty costs and time
Six Sigma
Descendent of total quality management; statistically based philosophy that aims to reduce defects, boost productivity, eliminate waste, and cut costs throughout a company
Total quality management (TQM)
refers to the management philosophy that takes as its central focus the need to improve the quality of a company’s products and services
International Standards
ISO 9000; certification process that requires certain quality standards that must be met
country factors
political and economic systems, culture and relative factor costs differ from country to country
technological factors
C
minimum efficient scale
refers to the level of output at which most plant level scale economies are exhausted
flexible manufacturing and mass customiazation
reduces setup times for complex equipment, increases utilization of individual machines through better scheduling, and improves quality control at all stages of manufacturing process.
Production factors
product features, locating production facilities, and strategic roles for production facilities
product features
value-to-weight ratio influences transportation costs and universal needs
Locating production facilities
centralized and decentralized
strategic roles for production facilities
importance of global learning, offshore factory, source factory, and server factory
The hidden costs of Foreign locations
High employee turnover, shoddy workmanship, poor product quality, and low productivity
make or buy decisions
made at both the strategic and operational levels, with the strategic level being focused on the long term and the operational level being focused on level being more focused on the short term
Global logistics
global distribution center, global inventory management, transportation, and reverse logistics
global distribution center
facility that positions and allows customization of products for delivery anywhere in the world
global inventory management
how much inventory to hold, in what form to hold it, and where to locate it in the supply chain
transportation
represents the largest percentage of any logistics budget; refers to the movement of raw materials
reverse logistics
process of planning, implementing, and controlling the efficient, cost effective flow of raw materials
just in time inventory
designed to deliver parts to a production process as they are needed and not before
Electronic data technology (EDI)
electronic interchange of data between two or more companies
Enterprise resource planning (ERP)
Wide ranging business planning and control system that includes supply chain related subsystems
Coordination in global supply chains
integration and coordination are critically important; shared decision making creates a more integrated coherent, effcient, and effective global supply chain
mass producing a standardized output
allows a firm to realize substantial unit cost reductions from experience curve effects and other economies of scale
Theodore Levitt’s HBR article
importance of technology in globalization; fewer differences in national and regional preferences
market segmentation
involves identifying groups of customers whose purchasing behavior differs from others in important ways
intermarket segmentation
segment of customers that spans multiple countries, transcending national borders
Business analytics include
descriptive, predictive, and prescriptive
International market research
involves systematic collection, recording, analysis, and interpretation of data to provide knowledge useful for decision making in a global company
Basic data collected
data on the country and potential market segments
concentrated retail system
few retailers supply most of market
fragmented retail system
many retailers, none with a major share
Chennel length
refers to the number of intermediaries between the producer and the consumer
channel exclusivity
distribution channel that is difficult for outsiders to access
channel quality
not consistent in emerging markets and less developed nations
noise level
refers to the number of other messages competing for a potential consumers attention
Push strategy
emphasizes personal selling (multilevel marketing companies)
Pull Strategy
depends more spending on mass media advertising
price discrimination
charging what the market will bear; helps maximize profits
predatory pricing
use aggressive pricing to drive out competitors and then raise prices and operate in a monopoly position
multipoint pricing strategy
two or more international businesses compete against each other in two or more national markets
experience curve pricing
aggressive pricing designed to increase volume and help the firm realize experience curve economies
antidumping regulations
set a floor under export prices and limit firms ability to pursue strategic pricing
Competition policy
designed to promote competition and to restrict monopoly practices
cross functional teams
take a product development project from the initial concept development to market introduction
Human resource management
strong link with profitability; tends to be weak in multinational organizations; has a critical impact on the people
staffing policy
selecting individuals who have the skills required to do particular jobs
types of staffing policies
The ethnocentric, Polycentric, geocentric,
The ethnocentric approach
limits advancement opportunities for host country nationals
Polycentric approach
requires host country nationals to be recruited to manage subsidiaries, while parent country nationals occupy key positions at corporate headquarters
geocentric approach
seeks the best people for key jobs throughout the organization. builds a cadre of international executives who feel at home working in a number cultures
Expatriate managers
used by ethnocentric and geocentric staffing policies
Inpatriates
a subset of expatriates who are citizens of a foreign country working in the home country of their multinational employer
Expatriate failure rates
results in premature return from a foreign posting and high resignation rates
Reasons for US failure
managers inability to adjust; inability of family to adjust;
Expatriate selection
four dimensions that predict success (Self orientation, others orientation, perceptual ability, and cultural toughness)
global mindset
fundamental attribute of a global manager; can deal with high levels of complexity and ambiguity and displays openness to the world
training
gives expatriate managers skills for the foreign posting
development
intended to develop the managers skills over his or her career with the firm
cultural training
seeks to foster an appreciation for the host country’s culture, history, politics, economy, religion, and social and business practices
language training
exclusive reliance on English diminishes an expatriate managers ability to interact with host country nationals
practical training
aimed at helping the expatriate manager and family ease themselves into day-to-day life in the host country
Repatriation of expatriates
should be seen as the final link in integrates process; face challenges at the home organization
management development and strategy
ongoing management education; increasingly used as a strategic tool; helps build informal management network in firm
performance appraisal problems
unintentional bias; distance and lack of experience working abroad by home country managers
national differences in compensation
us CEOs earn on average, roughly double the pay of non us CEOs
Expatriate Pay
balance sheet approach, Base salary, foreign service premium, allowances, taxation, and benefits
Balance sheet approach
includes base salary, a foreign service premium, allowances of various types, tax differentials, and benefits
Base salary
same range as the base salary for a similar position in the home country
Foreign service premium
extra pay the expatriate receives for working outside his or her country of orgin
Allowances
hardships, housing, cost of living, education,
Taxation
may have to pay income tax to both home and host country governments
Benefits
same level of medical and pension benefits abroad as at home
Concerns of organized labor
the company can counter its bargaining power with the power to move production to another country
approaches to labor relations
centralized (trend is toward greater centralized control, used to increase competitive advantage); and decentralized
