Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin Chapter Six Managing in the Global Environment

5-2 What Is the Global Environment?  Global Environment ≈ Set of forces and conditions in the world outside the organization’s boundaries that affect the way it operates and shape its behavior ≈ Changes over time ≈ Presents managers with opportunities and threats

5-3 Task Environment  Task Environment ≈ Set of forces and conditions that originate with suppliers, distributors, customers, and competitors ≈ Affects an organization’s ability to obtain inputs and dispose of its outputs ≈ Most immediate and direct effect on managers

5-4 The General Environment  Economic Forces ≈ factors that affect the general health and well- being of a country or world region ≈ Interest rates, inflation, unemployment, economic growth

5-5 Process of Globalization  Globalization ≈ Set of specific and general forces that work together to integrate and connect economic, political, and social systems across countries, cultures, or geographical regions ≈ Result is that nations and peoples become increasingly interdependent

5-6 Hofstede’s Model of National Culture Figure 6.4

5-7 Hofstede’s Model of National Culture  Individualism ≈ A worldview that values individual freedom and self-expression and adherence to the principle that people should be judged by their individual achievements rather their social background.  Collectivism ≈ A worldview that values subordination of the individual to the goals of the group and adherence to the principle that people should be judged by their contribution to the group

5-8 Hofstede’s Model of National Culture  Power Distance ≈ Degree to which societies accept the idea that inequalities in the power and well-being of their citizens are due to differences in individuals’ physical and intellectual capabilities and heritage

5-9 Hofstede’s Model of National Culture  Achievement versus Nurturing Orientation ≈ Achievement-oriented societies value assertiveness, performance, and success and are results-oriented. ≈ Nurturing-oriented cultures value quality of life, personal relationships, and service.

5-10 Hofstede’s Model of National Culture  Uncertainty Avoidance ≈ Societies and people differ in their tolerance for uncertainty and risk. ≈ Low uncertainty avoidance cultures (e.g., U.S. and Hong Kong) value diversity and tolerate a wide range of opinions and beliefs. ≈ High uncertainty avoidance societies (e.g., Japan and France) are more rigid and expect high conformity in their citizens’ beliefs and norms of behavior.

5-11 Hofstede’s Model of National Culture  Long-term vs. Short-term Orientation ≈ Cultures with a long-term orientation rest on values such as thrift and persistence in achieving goals ≈ Cultures with a short-term orientation are concerned with maintaining personal stability or happiness and living for the present

Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin Chapter Seven Decision Making, Learning, Creativity and Entrepreneurship

5-13 The Nature of Managerial Decision Making  Decision Making ≈ The process by which managers respond to opportunities and threats that confront them by analyzing options and making determinations about specific organizational goals and courses of action.

5-14 Decision Making  Programmed Decision ≈ Routine, virtually automatic process ≈ Decisions have been made so many times in the past that managers have developed rules or guidelines to be applied when certain situations inevitably occur

5-15 The Classical Model of Decision Making Figure 7.1

5-16 The Administrative Model  Administrative Model ≈ An approach to decision making that explains why decision making is inherently uncertain and risky and why managers can rarely make decisions in the manner prescribed by the classical model

5-17 Six Steps in Decision Making Figure 7.4

5-18 Group Decision Making  Superior to individual making  Choices less likely to fall victim to bias  Able to draw on combined skills of group members  Improve ability to generate feasible alternatives

5-19 Organizational Learning and Creativity  Organizational learning ≈ Managers seek to improve a employee’s desire and ability to understand and manage the organization and its task environment so as to raise effectiveness.  Learning organization ≈ Managers try to maximize the people’s ability to behave creatively to maximize organizational learning.

5-20 Organizational Learning and Creativity  Creativity ≈ The ability of the decision maker to discover novel ideas leading to a feasible course of action.  A creative management staff and employees are the key to the learning organization.

5-21 Building Group Creativity  Nominal Group Technique ≈ Provides a more structured way to generate alternatives in writing and gives each manager more time and opportunity to come up with potential solutions ≈ Useful when an issue is controversial and when different managers might be expected to champion different courses of action

Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin Chapter Eight The Manager as a Planner and Strategist

5-23 Planning and Strategy  Planning ≈ Identifying and selecting appropriate goals and courses of action for an organization.  The organizational plan that results from the planning process details the goals and specifies how managers will attain those goals.

5-24 Levels of Planning  Corporate-Level Plan ≈ Top management’s decisions pertaining to the organization’s mission, overall strategy, and structure. ≈ Provides a framework for all other planning.  Corporate-Level Strategy ≈ A plan that indicates in which industries and national markets an organization intends to compete.

5-25 Levels of Planning  Business-Level Plan: ≈ Long-term divisional goals that will allow the division to meet corporate goals ≈ Division’s business-level and structure to achieve divisional goals

5-26 Levels of Planning  Functional-Level Plan ≈ Goals that the managers of each function will pursue to help their division attain its business- level goals  Functional Strategy ≈ A plan of action that managers of individual functions can take to add value to an organization’s goods and services

5-27 Determining the Organization’s Mission and Goals  Defining the Business ≈ Who are our customers? ≈ What customer needs are being satisfied? ≈ How are we satisfying customer needs?  Establishing Major Goals ≈ Provides the organization with a sense of direction

5-28 Planning and Strategy Formulation Figure 8.5

5-29 The Five Forces  Level of rivalry in an industry  Potential for new entrants  Power of large suppliers  Power of large customers  Threat of substitute products

5-30 Formulating Business-Level Strategies  Low-Cost Strategy ≈ Driving the organization’s total costs down below the total costs of rivals.  Differentiation ≈ Distinguishing the organization’s products from those of competitors on one or more important dimensions.

5-31 Formulating Business-Level Strategies  Focused Low-Cost ≈ Serving only one market segment and being the lowest-cost organization serving that segment.  Focused Differentiation ≈ Serving only one market segment as the most differentiated organization serving that segment.

5-32 Four Ways to Expand Internationally Figure 8.7

Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin Chapter Nine Value-Chain Management: Functional Strategies for Competitive Advantage

5-34 Four Ways to Create a Competitive Advantage Figure 9.1

5-35 Functional Strategies and Value-Chain Management  Functional-level strategy ≈ plan of action to improve the ability of each of an organization’s departments to performs its task- specific activities in ways that add value to an organization’s goods and services

5-36 Functional Strategies and Value-Chain Management  Value-chain management ≈ development of a set of functional-level strategies that support a company’s business- level strategy and strengthen its competitive advantage

5-37 What Do Customers Want? 1.A lower price to a higher price 2.High-quality products 3.Quick service and good after-sales service 4.Products with many useful or valuable features 5.Products that are tailored to their unique needs

5-38 Impact of Increased Quality on Organizational Performance Figure 9.4

5-39 Total Quality Management  Total quality management (TQM) ≈ focuses on improving the quality of an organization’s products and stresses that all of an organization’s value-chain activities should be directed toward this goal

5-40 Facilities Layout, Flexible Manufacturing, and Efficiency  Facilities Layout ≈ strategy of designing the machine-worker interface to increase production system efficiency  Flexible Manufacturing ≈ strategy based on the use of IT to reduce the setup costs associated with a product assembly process

5-41 Facilities Layout  Product layout ≈ machines are organized so that each operation is performed at work stations arranged in a fixed sequence  Process Layout ≈ self contained work stations not organized in a fixed sequence

5-42 Facilities Layout  Fixed-Position Layout ≈ the product stays in a fixed spot and components produced at remote stations are brought the product for to final assembly

5-43 Just-in-Time Inventory and Efficiency  Just-in-time (JIT) inventory system gets components to the assembly line just as they are needed to drive down costs  Major cost savings can result from increasing inventory turnover and reducing inventory holding costs

Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin Chapter Ten Managing Organizational Structure and Culture

5-45 Organizational Structure  Organizational Architecture ≈ The organizational structure, control systems, culture, and human resource management systems that together determine how efficiently and effectively organizational resources are used.

5-46 Designing Organizational Structure  Organizing ≈ The process by which managers establish working relationships among employees to achieve goals.  Organizational Structure ≈ Formal system of task and reporting relationships showing how workers use resources.

5-47 Factors Affecting Organizational Structure Figure 10.1

5-48 Job Design  Job Design ≈ The process by which managers decide how to divide tasks into specific jobs. ≈ The appropriate division of labor results in an effective and efficient workforce.

5-49 Job Design  Job Simplification ≈ The process of reducing the tasks each worker performs.  Job Enlargement ≈ Increasing the number of different tasks in a given job by changing the division of labor  Job Enrichment ≈ Increasing the degree of responsibility a worker has over a job

5-50 Grouping Jobs into Functions  Functional Structure ≈ An organizational structure composed of all the departments that an organization requires to produce its goods or services.

5-51 Divisional Structures  Divisional Structure ≈ Managers create a series of business units to produce a specific kind of product for a specific kind of customer ≈ Product, market, geographic

5-52 Matrix Design Structure  Matrix Structure ≈ An organizational structure that simultaneously groups people and resources by function and product. ≈ The structure is very flexible and can respond rapidly to the need for change. ≈ Each employee has two bosses

5-53 Product Team Design Structure  Product Team Structure ≈ Does away with dual reporting relationships and two-boss managers ≈ Functional employees are permanently assigned to a cross-functional team that is empowered to bring a new or redesigned product to work

5-54 Hybrid Structures  Hybrid Structure ≈ The structure of a large organization that has many divisions and simultaneously uses many different organizational structures Figure 10.7