Chapter 12 Notes
Why Do We Have Capital markets?
Capital markets bring together investors and borrowers
investors - corporations with surplus cash, individuals, and non-bank financial
borrowers - individuals, companies, and governments
Control Systems Notes
1.Personal controls personal contact with subordinates
most widely used in small firms
2.Bureaucratic controls a system of rules and procedures that directs the actions of
budgets and capital spending rules
Chapter 14 Notes
What is organizational architecture?
Organizational architecture is the totality of a firms organization including
the formal division of the organization into subunits
the location of decision-making responsibi
Chapter 13 Notes
What Is Strategy?
A firms strategy refers to the actions that managers take to attain the goals of the firm
Firms need to pursue strategies that increase profitability and profit growth
Profitability is the rate of return the firm makes o
A eurocurrency is any currency banked outside its country of origin
About two-thirds of all eurocurrencies are Eurodollars
dollars banked outside the U.S.
Other important eurocurrencies are the euro-yen, the euro-pound, and the euroeur
Global Equity Market Notes
The global equity market allows firms to
1.Attract capital from international investors
many investors buy foreign equities to diversify their portfolios
2.List their stock on multiple exchanges
this type of trend may result in
Location Economies Notes
Location economies are economies that arise from performing a value creation activity
in the optimal location for that activity, wherever in the world that might be
By achieving location economies, firms can
lower the costs of val
Local Responsiveness Notes
When are pressures greatest?
Pressures for local responsiveness arise from
1.Differences in consumer tastes and preferences
strong pressure emerges when consumer tastes and preferences differ significantly
Global Expansion Notes
What happens when firms expand globally?
When firms expand internationally, they often group all of their international activities
into an international division
Over time, manufacturing may shift to foreign markets
firms with a fun