Week 3 (Chapter 2: Claims, Chandler: The Enduring Logic of Industrial Success, & Schumacher: Small is beautiful: A study of economics as if people mattered)

Question 1

Define an issue

Answer 1

point of contention/disagreement between at least two disputants or points of view

Ex. Should pornography be prohibited?

Question 2

Define the main issue and the central issue.

Answer 2

The main issue: is the one we’re trying to resolve in the dispute
The central issue: when its resolution is critical to resolving the dispute (main issue)

Example:
Main issue: “should pornography be prohibited”
Central issue: “Is pornography harmful”

Question 3

What are organizations? (3 things)

Answer 3

1. Are social entities - made up of people and involve human interaction
2. Are created to achieve goals
3. Interact with the environment

Question 4

What is Organization theory? What are its primary concerns? (“TEST” bolded)

Answer 4

• the study of formal social organizations such as businesses and bureaucracies and their interrelationship with the environment in which they operate

Concerns:
Size: Big or Small?
Strategy: Relationship with the environment
Structure (bolded): Reporting relationships, grouping, design

Question 5

3 Traditional Organizational Types

Answer 5

1. Business/For-profit/Private sector
2. Government/Public sector
3. Non-profit/NGO/Civil society

Question 6

Chandler’s Enduring Logic of Industrial Success about? Hint: Why should companies be large?

Answer 6

For industrial success, companies should be large so they can successfully exploit the economies of scale or scope in competition

Question 7

What is a managerial enterprise? What exactly is the logic?

Answer 7

refers to large industrial concerns in which operating and investment decisions are made by a hierarchy of salaried managers governed by a board of director

the logic begins with cost advantages that scale and scope provide technologically advanced capital-intensive industries

Question 8

Define scale (Hint: scaling = more products at __?) (“TEST” bolded)

Answer 8

large plants produce products at a much lower cost than small ones because the cost per unit drops as the volume of output rises

Question 9

Define Scope (Hint: scoping products to make m___) (“TEST” bolded)

Answer 9

large plants use many of the same raw materials and semi-finished items and intermediate production processes to make a variety of different products

Question 10

Chandler’s Enduring Logic of Industrial Success: What is a First Mover? Why do challengers fail?

Answer 10

Companies that made their investments quickly came to dominate industries for decades
Challengers fail because they are always in the footsteps of Frist Movers

Question 11

Chandler’s Enduring Logic of Industrial Success: Long-term growth management strategy involved growing.. 2 things (Hint: Moving) (“TEST” bolded)

Answer 11

1. By moving into related product markets (economies of scope)
2. Or by moving aboard (usually based on economies of scale)

Question 12

(“TEST” bolded) When large is not logical: when senior managers choose to grow through diversification—to acquire businesses in which they had few if any organizational capabilities to give them a competitive edge… What logic was ignored?

Answer 12

they ignored the logic of managerial enterprise

Question 13

To gain cost advantages from the large size, it is necessary that size is fully and efficiently used… 3 things

Answer 13

1. Full utilization of capacity: Flow of materials must be constant
2. Investment in national and international marketing and distribution network
3. Investment into lower and middle managers to coordinate flow through production and distribution

Question 14

Schumacher’s Small is Beautiful: When large units break up… usually they

Answer 14

break up into smaller ones

Question 15

Schumacher’s Small is Beautiful: As, humans we have two incompatible needs:___ and ___ (“TEST” bolded)

Answer 15

Order and Freedom
We need the freedom of lost of small autonomous units and the orderliness of a large-scale unity and coordination

Question 16

Schumacher’s Small is Beautiful: man needs differnet structures both ___ ones and ___ ones some exclusive and some comprehensive (“TEST” bolded)

Answer 16

small ones and large ones

Question 17

Schumacher’s Small is Beautiful: one of the causes of ___ is modern technology— specifically transportation and communication (“TEST” bolded)

Answer 17

Gigantism
(+) allowed people to move freely from rural to urban centres
(-) such displacements caused deserted towns and disconnected people
Makes people footloose

Question 18

Define a claim

Answer 18

the central idea is that the author of a piece of writing is trying to persuade you should accept it
- offers reasons why you should accept it