Management Midterm Review Management and Organization Theory a. What defines the competitive landscape of business? i. Globalization 1. Coming soon: A Post-American world – CBS. Passing the Torch video a. China could be the commercial leader in the world i. By 2035, China’s economy will be bigger than ours (twice the size) b. Future being shaped by foreign people c. Shift is fundamental i. Many other nations are getting good at capitalism d. Everyone else is rising but we are staying the same (end of “golden age”) e. China wants to globally establish Chinese brands “global challengers” i. iPhone – global brand with Chinese technology behind brands ii. Japanese cars – Toyota, not GM iii. Haier America 1. Owned by Chinese, trying to buy GE 2. Number 1 brand in China, trying to be 3 in US 3. Staffed and run by American, but owned by Chinese iv. Huawei 1. Offers good quality at low cost 2. China company one of world’s most influential 3. Number 3 in market share of mobile network equipment equipment f. We must change to hang onto our wealth i. 179 countries growing faster tan us ii. Post-America can be a failure or a glory 1. “America globalized the world, but it forgot to globalize itself” ii. Collaboration across organizational “boundaries” 1. Wikinomics – how mass collaboration changes everything a. Book by Son Tapscott – “new art and science of collaboration” b. Organizational boundaries get pourus, more than outsourcing c. Social networks transform collaboration within firms d. Examples: i. Linden Lab – game players create content ii. – innovation from outside the company iii. Beoing and BMW open designs to partnering companies iii. Change b. What are the essential success drivers for competitive advantage? i. ii. Quality iii. Service iv. Speed v. Cost Competitiveness vi. Technology i. Caterpillar –
1. World’s leading manufacturer of farm and construction machines 2. 44% in US, 56% of business abroad 3. Faced same challenges as auto companies 4. Innovation (distinguish from knockoffs – onboard computer) 5. Getting Lean (cut manufacturing costs, shifted decision making to different business units) a. Cost competitiveness b. Confront the union c. Coddle your dealers—working with dealers to deliver strong service c. Believing that management is common sense produces some dangerous half truths i. Financial incentives drive company performance 1. Get the rewards right and everything else will follow 2. Financial incentives are very important for driving company performance 3. Reward systems signal what is important 4. Money motivates and directs behavior 5. Incentives matter, but … a. Sometimes you get what you pay for but don’t want it b. Surveys show people at work are motivated by many factors that they rate as more important than money c. Extrinsic incentives can undermine intrinsic motivation d. Monetary rewards are expensive and lose their effectiveness ii. Strategy is #1
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