3
Chapter Corporate social responsibility
o The goal of CSR is to embrace responsibility for the company's actions and
encourage a positive impact through its activities on the environment, consumers,
employees, communities, stakeholders and all other members of the public
sphere.
Ethnocentrism
o Is the belief that ones native country, culture, language, abilities, or behavior to
those of another culture
Ethical behavior
o Is the behavior that is accepted as right or wrong according to the standards;
is subjective in nature and varies on each person
Ethical dilemma
o A situation where you have to decide whether to pursue a course of action that
may benefit you or your organization but that is unethical or even illegal
Ethics
o Standards of right or wrong that influence behavior.
External stakeholders
o People or groups in the organizations external environment that are affected by it.
Can be customers, suppliers, environment, government, owners, etc.
General environment
o Are the economic, technological, sociocultural, demographic, political-legal, and
international forces that can affect your business but that you cant control.
Internal stakeholders
o Consist of employees, owners, and board of directors. Are the ones who make the
business run
Individual approach to decide ethical dilemmas
o Ethical behavior is guided by what will result in the individuals best long-term
interests, which ultimately are in everyones self-interest. You will act ethically in
the short-run to avoid other hurting you in the long-run
Justice approach to decide ethical dilemmas
o Ethical behavior is guided by respect for impartial standards of fairness and
equity. One consideration is if the policies are administered impartially and fairly
Moral-right approach to decide ethical dilemmas
o Ethical behavior is guided by respect for fundamental right of human beings such
as the human constitutions bill of rights
Philanthropy
o Making charitable donations to benefit humankind
Social responsibility
o Managers duties to take actions that will benefit the interest of society as well as
of the organization
Strategic allies
o Describe the relationship of two organizations who joined forces to achieve
advantages neither can perform as well alone
Sustainability
o Economic development that meets the needs of the present without compromising
the ability of future generations to meet their own needs
Utilitarian approach to decide ethical dilemmas
o Ethical behavior is guided by what will result in the greatest good for the greatest
number of people.
Value system
o The pattern of values within the organization
Values
o Underlie beliefs and attitudes that help determine persons behavior
Chapter 4
Barriers to international trade
o Tariff customs duty or tax levied mainly on imports.
o Import quotaslimits on the number of a product that can be imported
o Embargoes a complete ban on the import or export of certain products
Culture
o Is the shared set of beliefs, values, knowledge, and patterns of behavior common
to a group of people
Dumping
o The practice of foreign companys exporting products abroad at a lower price than
the price in the home market in order to drive down the prices of domestic
products
Ethnocentric managers
o Believe that their native country, culture, language, and behavior are superior to
others
Exporting
o A company produces goods domestically and sells them outside the country
Franchising
o Is a form of licensing in which a company allows a foreign company to pay it a
fee and share of the profit in return for using the firs companys brand name and
package of materials and services
Free trade
o The movement of goods and services among nations without political or
economic obstruction
Geocentric managers
o Accept that there are differences and similarities between home and foreign
personnel and practices and that they should use whatever techniques are most
effective
Global outsourcing
o Is defined as using suppliers outside home country to provide labor, goods, or
services
High-context culture
o Cultures in which people rely heavily on situational signals (nonverbal
communication, status, position family connection) for meaning when
communicating with others. Countries like Mexico, Japan, and Vietnam; the Arab
world or South America.
Importing
o A company buys goods outside the country and resells them domestically
Joint venture
o A strategic alliance to share the risks, and rewards of starting a new enterprise
together in a foreign country.
Licensing
o A company allows a foreign company to pay it a fee to make or distribute the first
companys product or service
Low-context culture
o In which shared meanings are primarily derived from written and spoken words.
Countries like US and Canada; Western Europe, Scandinavian countries.
Multinational corporation
o Is a business firm with operations in several countries (EX: Wal-Mart, Ford, etc)
Multinational organization
o Is a nonprofit organization with operations in several countries (EX: International
Red Cross)
Outsourcing
o Using suppliers outside the company to provide goods and services
Polycentric managers
o Take view that native managers in the foreign offices best understand native
personnel and practices, and so the home office should leave them alone
Turnkey projects
Wholly owned subsidiaries
o Is a foreign subsidiary that is totally owned and controlled by an organization,
might be an existing company that is purchased outright
Greenfield venture is a foreign subsidiary that the owning company has
built from scratch
Example: GM owns Opel in Germany, Vauxhall in UK, Holdens in
Australia and Saab in Sweden.
Chapter 6
Competitive intelligence
o Means gaining information about ones competitors activities so that you can
anticipate their moves and react appropriately
Cost-focus strategy (Porters 4 competitive strategy) ^^
o Is to keep the costs, and hence prices, of a product or service below those of
competitors and to target a narrow market.
Cost-leadership strategy (Porters 4 competitive strategy) ^^
o Is to keep the costs, and hence prices, of a product or service below those
competitors and to target a wide market
Decline stage (Products Life Cycle) **
o The period in which the product falls out of favor and the organization withdraws
from the marketplace.
Defensive strategy (Grand Strategies)
o Involves reduction into the organizations efforts
Differentiation strategy (Porters 4 competitive strategy) ^^
o Is to offer products or services that are of unique and superior value compared to
those of competitors but to target wide market
Diversification
o Operating several business in order to spread the risk
Environmental scanning
o Careful monitoring of an organizations internal and external environments to
detect early signs of opportunities and threats that may influence the firms plans
Focused-differentiation strategy (Porters 4 competitive strategy) ^^
o Is to offer products or services that are of unique and superior value compared to
those of competitors and to target a narrow market
Forecast
o A vision or projection of the future
Grand strategy
o Explains how the organizations mission is to be accomplished.
Growth stage (Products Life Cycle) **
o Is the most profitable stage; is the period in which customer demands increases,
the products sales grow, and competitors may enter the market
Growth strategy (Grand Strategies)
o Involves expansion as in sales revenues, market share, number of employees, or
number of customers
Introductions stage (Products Life Cycle) **
o Is the stage in which a new product is introduced into the marketplace
Maturity stage (Products Life Cycle) **
o The period in which the product starts to fall out of favor and sales and profits
begin to fall off
Organizational strengths
o The skills and capabilities that give the organization special competencies and
competitive advantages executing strategies in pursuit of its mission.
Organizational threats
o Environmental factors that hinder an organizations achieving a competitive
advantage
Organizational opportunities
o Environmental factors that hinder an organizations achieving a competitive
advantage
Organizational weaknesses
o The drawback that hinder an organization in executing strategies in pursuit of it
mission
Related diversification
o An organization under one ownership operates separate business that are related
to one another
Scenario analysis or contingency planning
o Is the creation of alternative hypothetical but equally likely future conditions
Single-product strategy
o A company makes and sells only one product within its market
Stability strategy (Grand Strategies)
o Involves little or no significant change
Strategic control
o Consists of monitoring the execution of strategy and making adjustments, Strategic if
necessary.
management
o Is a process that involves managers from all parts of the organization in the
formulation and the implementation of strategies and strategic goals
Strategic positioning
o Attempt to achieve sustainable competitive advantage by preserving what is
distinctive about a company
Strategy
o Is a large scale action plan that sets the direction for an organization
SWOT analysis
o Is a search for strengths (S), weaknesses (W), opportunities (O), and threats (T)
affecting the organization
Synergy
o The economic value of separate, related business under one ownership and
management is greater together than the business are worth separately
Trend analysis
o Is a hypothetical extension of a past series of events into the future
Unrelated diversification
o Operating several business under one ownership that are not related to one
another (EX: P&G)
Chapter 7
Brainstorming
o Is a technique used to help groups generate multiple ideas and alternatives for
solving problems
Consensus
o Occurs when members are able to express their opinions and reach agreement to
support the final decision
Decision
o Is a choice made from among available alternatives
Decision making
o Is the process of identifying and choosing alternative courses of action
Defensive avoidance
o In defensive avoidance a manager cant find a good solution and follows by
(a) procrastination
(b) passing the buck
(c) denying the risk of any negative consequences
Diagnosis
o Analyzing the underlying causes
Goal displacement
o Occurs when the primary goal is subsumed by a secondary goal
Groupthink
o Occurs when group members strive to agree for the sake of unanimity and thus
avoid accurately assessing the decision situation
Heuristics
o Are strategies that simplify the process of making decisions
Non-rational models of decision making
o Explain how managers make decisions; they assume that decision making is
nearly always uncertain and risky
Satisfying managers seek alternatives until they find one that is
satisfactory, not optimal
Incremental managers take small, short-term steps to alleviate a
problem
Intuition Is making a choice without the use of conscious thought or
logical inference
Opportunities
o Situations that present possibilities for exceeding existing goals
Panic
o A manager is so frantic to get rid of the problem that it cant deal with the
situation realistically. It occurs in crisis situations
Participative management
o The process of involving employees in
Setting goals
Making decisions
Solving problems
Making changes
Predictive modeling
o Is data mining technique used to predict future behavior and anticipate the
consequences of change
Problems
o Difficulties that inhibit the achievement of goals
Rational model of decision making
o Explains how managers should make decisions; it assumes managers will make
logical decisions that will be the optimum in furthering the organizations best
interests
Risk propensity
o Is the willingness to gamble or undertake risk for the possibility of gaining an
increased payoff
Chapter 8
Accountability
o Managers must report and justify work results to the managers above them
Adaptive perspective
o Assumes that the most effective cultures help organizations anticipate and adapt
to environmental changes
Adhocracy culture (Organizational Culture)
o Has an external focus and values flexibility. Attempts to create innovative
products; employees are encourage to take risks and experiment with new ways of
getting alone.
Authority
o Refers to the rights inherited in a managerial position to make decisions, give
orders, and utilize resources
Centralized authority
o Important decisions are made by top-level managers
Clan culture (Organizational Culture)
o Has internal focus and values flexibility rather than stability control. Encourages
collaboration among employees, encourage consensus and job satisfaction.
Common purpose
o Unifies employees or members and gives everyone an understanding of the
organizations reason for being
Contingency design
o The process of fitting the organization to its environment
Coordinated effort
o Is the coordination of individual efforts into a group or organization-wide effort
Customer divisions (Divisional Structure)
o Tend to group activities around common customers or clients
Decentralized authority
o Important decisions are made by middle-level and supervisory-level managers
Delegation
o The process of assigning managerial authority and responsibility to managers and
employees lower in the hierarchy.
Differentiation
o Is the tendency of the parts of an organization to disperse and fragment; the more
subunits the more differentiated
Enacted values
o Represent the values and norms actually exhibited in the organization
Espoused values
o Are the explicit stated values and norms preferred by an organization
Fit perspective
o Assumes that an organizations culture must align, or fit, with its business or
strategic context
Geographic divisions (Divisional Structure)
o Group activities around regional locations
Hero
o Is a person whose accomplishments embody the vales of the organization
Hierarchy culture (Organizational Culture)
o Internal focus and values stability and control over flexibility. Companies have
formalized, structured work environment aimed at achieving effectiveness
through control that measures efficiency.
Hierarchy of authority
o Is a control mechanism for making sure the right people do the right thing at the
right time
Integration
o Is the tendency of the parts of an organization to draw togueter to achieve a
common purpose
Market culture (Organizational Culture)
o Strong external focus and values stability and control. strong desire to deliver
results, customers, productivity, and profits take precedence over employee
development,
Mechanistic organization
o Authority is centralized, tasks and rules are clearly specified, and employees are
closely supervised
Modular structure
o A firm assembles product chunks, or modules, provided by outside contractors
Organic organization
o Authority is decentralized, there are fewer rules and procedures, and network of
employees are encouraged to cooperate and respond quickly to unexpected tasks
Organization
o Is a system of consciously coordinated activities or forces of two or more people
Organizational life cycle
o Has a natural sequences of stages
Birth stage is the non-bureaucratic stage; when the organization is
created
Youth stage organization becomes pre-bureaucratic ;stage of growth and
expansion
Midlife stage organizations becomes bureaucratic; a period of growth
evolving into stability
Maturity stage organization becomes very bureaucratic, large and
mechanistic
Product divisions (Divisional Structure)
o Group activities around similar products or services
Responsibility
o The obligation you have to perform the tasks assigned to you
Simple structure
o Has authority centralized in a single person, a flat hierarchy, few rules, and low
work specialization
Strength perspective
o Assumes that the strength of a corporate culture is related to a firms long-term
financial performance
Symbol
o Is an object, act, quality, or event that conveys meaning to others
Team-based structure
o Teams or workgroups are used to improve horizontal relations and solve problems
throughout the organization
Unity of command
o In which an employee should report to no more than one manager
Chapter 10
Adaptive change
o Is reintroduction of a familiar practice the reimplementation of a kind of change
that has already been experienced within the same organization; low complexity,
uncertainty and cost
Benchmarking
o A process by which a company compares its performance with that of highperforming organizations
Incremental innovations
o The creation of products, services or technologies that modify existing ones
Innovative change
o Is the introduction of practices that are new to the organization; moderate
complexity, cost and uncertainty.
Intervention
o The attempt to correct the diagnosed problem
Organization development
o Is the set of techniques for implementing planned change to make people and
organizations more effective
Proactive change
o Involves making carefully thought-out changes in anticipation of possible or
expected problems or opportunities
Radically innovative change
o Involves introducing a practice that is new to the industry; more complex, higher
costs, and uncertain
Radical innovations
o The creation of products, services, or technologies that replace existing ones
Reactive change
o Making changes in response to problems or opportunities as they arise
Technology
o Any machine or process that enables an organization to gain a competitive
advantage in changing materials used to produce a finished product