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CHAPTER 1 activity at a time and often move back and forth

between the activities in unpredictable ways.


Organization – a group of people working together in a
structured and coordinated fashion to achieve a set of BASIC MANAGEMENT FUNCTIONS
goals Planning and Decision Making
Management - a set of activities (including planning and Planning - setting an organization’s goals and
decision making, organizing, leading, and controlling) deciding how best to achieve them.
directed at an organization’s resources (human,
financial, physical, and information), with the aim of Decision Making - part of the planning process
achieving organizational goals in an efficient and that involves selecting a course of action from a
effective manner set of alternatives.

Manager - someone whose primary responsibility is to Organizing - determining how activities and resources
carry out the management process are to be grouped.

Efficient - using resources wisely in a cost-effective way Leading - the set of processes used to get members of
the organization to work together to further the
Effective - making the right decisions and successfully interests of the organization.
implementing them
Controlling - monitoring organizational progress toward
Levels of Managers goal attainment.
Top Managers make up the relatively small group of FUNDAMENTAL MANAGEMENT SKILLS
executives who manage the overall organization.
Technical Skills - the skills necessary to accomplish or
Middle Managers are primarily responsible for understand the specific kind of work done in an
implementing the policies and plans developed by top organization.
managers and for supervising and coordinating the
activities of lower-level managers. Interpersonal Skills - the ability to communicate with,
understand, and motivate both individuals and groups.
First-line Managers supervise and coordinate the
activities of operating employees. Conceptual Skills - the manager’s ability to think in the
abstract.
MANAGING IN DIFFERENT AREAS OF THE
ORGANIZATION Diagnostic Skills - the manager’s ability to visualize the
most appropriate response to a situation.
Marketing Managers work in areas related to the
marketing function—getting consumers and clients to Communication Skills - the manager’s abilities both to
buy the organization’s products or services effectively convey ideas and information to others and
to effectively receive ideas and information from others.
Financial Managers deal primarily with an
organization’s financial resources. Decision-making Skills - the manager’s ability to
Operations Managers are concerned with creating and correctly recognize and define problems and
managing the systems that create an organization’s opportunities and to then select an appropriate course
products and services. of action to solve problems and capitalize on
opportunities.
Human Resources Managers are responsible for hiring
and developing employees. Time Management Skills - the manager’s ability to
prioritize work, to work efficiently, and to delegate
Administrative, or general, Managers are not
appropriately.
associated with any management specialty.
The Management Process Management involves four
basic activities—planning and decision making,
organizing, leading, and controlling. Although there is a
basic logic for describing these activities in this Theory - a conceptual framework for organizing
sequence, most managers engage in more than one knowledge and providing a blueprint for action.
FRAMEWORK OF MANAGEMENT PERSPECTIVES Management Science - focuses specifically on
the development of mathematical models.
Systems Approach – recognition of internal
interdependencies and environmental influences Operations Management - concerned with
helping the organization more efficiently
Contingency Perspective - recognition of the situational produce its products or services.
nature of management. Response to characteristics of
situations. Contemporary Management Perspective

Classical Management Perspective - consists of two System Perspective - one important contemporary
distinct branches— scientific management and management perspective
administrative management.
System - an interrelated set of elements
Scientific Management - concerned with functioning as a whole
improving the performance of individual
Open systems - a system that interacts with its
workers.
environment
Soldiering - employees deliberately
Closed systems - a system that does not
working at a slow pace.
interact with its environment
Administrative Management - focuses on
Subsystems - a system within another system
managing the total organization.
Synergy - two or more subsystems working
Behavioral Management Perspective - emphasizes
together to produce more than the total of
individual attitudes and behaviors and group processes.
what they might produce working alone
Human Relations Movement - argued that
Entropy - a normal process leading to system
workers respond primarily to the social context
decline
of the workplace.
Universal Perspectives - an attempt to identify the one
Theory X - a pessimistic and negative view of
best way to do something
workers consistent with the views of scientific
management. Contingency Perspective - suggests that appropriate
managerial behavior in a given situation depends on, or
Theory Y - a positive view of workers; it
is contingent on, unique elements in a given situation
represents the assumptions that human
relations advocates make. CHAPTER 2
Organizational Behavior - contemporary field
THE ORGANIZATION’S ENVIRONMENT
focusing on behavioral perspectives on
management. External Environment - everything outside an
organization’s boundaries that might affect it
Human Relations Movement - proposed that
workers respond primarily to the social context General Environment - the set of broad dimensions and
of work, including social conditioning, group forces in an organization’s surroundings that
norms, and interpersonal dynamics. Assumed determines its overall context
that the manager’s concern for workers would
Economic Dimension - the overall health and
lead to increased worker satisfaction and
vitality of the economic system in which the
improved worker performance.
organization operates

Technological Dimension - the methods


Quantitative Management Perspective - applies available for converting resources into products
quantitative techniques to management. or services
Political–Legal Dimension - the government Managerial Ethics - standards of behavior that guide
regulation of business and the relationship individual managers in their work
between business and government
Codes of Ethics - a formal, written statement of the
Task Environment - specific organizations or groups values and ethical standards that guide a firm’s action
that affect the organization
EMERGING ETHICAL ISSUES
Competitor - an organization that competes
with other organizations for resources  Ethical Leadership
Sarbanes–Oxley Act of 2002 - a law that requires
Customer - whoever pays money to acquire an CEOs and CFOs to vouch personally for the
organization’s products or services truthfulness and fairness of their firms’ financial
disclosures and imposes tough new measures to
Supplier - an organization that provides
deter and punish corporate and accounting fraud
resources for other organizations
and corruption
Regulator - a body that has the potential to
control, legislate, or otherwise influence the  Corporate Governance
organization’s policies and practices  Ethics and Information Technology

Regulatory Agency - an agency created by the SOCIAL RESPONSILIBITY IN ORGANIZATIONS


government to regulate business activities Social Responsibility - the set of obligations that an
Strategic Partners (also called strategic ally) - an organization must protect and enhance the societal
organization working together with one or more context in which it functions
other organizations in a joint venture or similar
 Arguments for Social Responsibility
arrangement
 Arguments Against Social Responsibility
Interest Group - a group organized by its
members to attempt to influence organizations
MANAGING SOCIAL RESPONSIBILTY

Internal Environment - the conditions and forces within Formal Organizational Dimensions
an organization Legal Compliance - the extent to which an
Owners - whoever can claim property rights to organization complies with local, state, federal,
an organization and international laws

Board of Directors - governing body that is Ethical Compliance - the extent to which an
elected by a corporation’s stockholders and organization and its members follow basic
charged with overseeing the general ethical standards of behavior
management of the firm to ensure that it is Philanthropic Giving - awarding funds or gifts to
being run in a way that best serves the charities or other worthy causes
stockholders’ interests
Informal Organizational Dimensions
THE ETHICAL AND SOCIAL ENVIRONMENT OF
Whistle-Blowing - the disclosure, by an
MANAGEMENT
employee, of illegal or unethical conduct on the
Ethics - an individual’s personal beliefs about whether a part of others within the organization
behavior, action, or decision is right or wrong

Ethical Behavior - behavior that conforms to generally


accepted social norms

Unethical Behavior - behavior that does not conform to


generally accepted social norms LEVELS OF INTERNATIONAL BUSINESS ACTIVITY
Exporting - making a product in the firm’s domestic States, Canada, and Mexico to promote trade
marketplace and selling it in another country with one another

Importing - bringing a good, service, or capital into the  The Role of the GATT and WTO
home country from abroad General Agreement on Tariffs and Trade
(GATT) - a trade agreement intended to
Licensing - an arrangement whereby one company
promote international trade by reducing trade
allows another company to use its brand name,
barriers and making it easier for all nations to
trademark, technology, patent, copyright, or other compete in international markets
assets in exchange for a royalty based on sales

Strategic Alliances World Trade Organization (WTO) - an


organization, which currently includes 140
Strategic Alliance - a cooperative arrangement member nations and 32 observer countries,
between two or more firms for mutual gain that requires members to open their markets to
international trade and to follow WTO rules
Joint Venture - a special type of strategic
alliance in which the partners share in the Organizational Culture - the set of values, beliefs,
ownership of an operation on an equity basis behaviors, customs, and attitudes that helps the
Direct Investment - when a firm builds or purchases organization’s members understand what it stands for,
operating facilities or subsidiaries in a different country how it does things, and what it considers important
from the one where it has its headquarters
CHAPTER 3
Maquiladoras - light assembly plants that are
built in Northern Mexico close to the U.S. Mission - a statement of an organization’s fundamental
border and are given special tax breaks by the purpose
Mexican government KINDS OF GOALS
THE CONTEXT OF INTERNATIONAL BUSINESS Strategic Goal - a goal set by and for an organization’s
top management
 The Cultural Environment
 Controls on International Trade Tactical Goal - a goal set by and for an organization’s
middle managers
Tariff - a tax collected on goods shipped across
national boundaries Operational Goal - a goal set by and for an
organization’s lower-level managers
Quota - a limit on the number or value of goods
that can be traded KINDS OF ORGANIZATIONAL PLAN
Export Restraint Agreements - accords reached Strategic Plan - a general plan outlining decisions about
by governments in which countries voluntarily the resource allocation, priorities, and action steps
limit the volume or value of goods they export necessary to reach strategic goals
to or import from one another
Tactical Plan, aimed at achieving tactical goals, is
 Economic Community - a set of countries that developed to implement specific parts of a strategic
agree to markedly reduce or eliminate trade plan. Tactical plans typically involve upper and middle
barriers among member nations (a formalized management and, compared with strategic plans, have
market system) a somewhat shorter time horizon and a more specific
European Union (EU) - the first and most and concrete focus.
important international market system Operational Plan - a plan that focuses on carrying out
North American Free Trade Agreement tactical plans to achieve operational goals
(NAFTA) - an agreement among the United THE NATURE OF STRATEGIC MANAGEMENT
Strategy - a comprehensive plan for accomplishing an Organizational Weakness - a skill or capability that does
organization’s goals not enable an organization to choose and implement
strategies that support its mission
Strategic Management - a comprehensive and ongoing
management process aimed at formulating and Organizational Opportunity - an area in the
implementing effective strategies; a way of approaching environment that, if exploited, may generate higher
business opportunities and challenges performance

Effective Strategy - a strategy that promotes a superior Organizational Threat - an area that increases the
alignment between the organization and its difficulty of an organization performing at a high level
environment and the achievement of strategic goals
FORMULATING BSUINESS-LEVEL STRATEGIES
COMPONENTS OF STRATEGY
Differentiation Strategy - a strategy in which an
Distinctive Competence - an organizational strength organization seeks to distinguish itself from competitors
possessed by only a small number of competing firms through the quality of its products or services
Scope - when applied to strategy, it specifies the range Overall Cost Leadership Strategy - a strategy in which
of markets in which an organization will compete an organization attempts to gain a competitive
advantage by reducing its costs below the costs of
Resource Deployment - how an organization distributes
competing firms
its resources across the areas in which it competes
Focus Strategy - a strategy in which an organization
TYPES OF STRATEGIC ALTERNATIVES
concentrates on a specific regional market, product line,
Business-Level Strategy - the set of strategic or group of buyers
alternatives from which an organization chooses as it
Product Life Cycle - a model that portrays how sales
conducts business in an industry or market
volume for products changes over the life of products
Corporate-Level Strategy - the set of strategic
FORMULATING CORPORATE-LEVEL STARTEGIES
alternatives from which an organization chooses as it
manages its operations simultaneously across several Diversification - the number of different businesses that
industries and several markets an organization is engaged in and the extent to which
these businesses are related to one another
Strategy Formulation - the set of processes involved in
creating or determining an organization’s strategies; it Single-Product Strategy - a strategy in which an
focuses on the content of strategies organization manufactures just one product or service
and sells it in a single geographic market
Strategy Implementation - the methods by which
strategies are operationalized or executed within the Related Diversification - a strategy in which an
organization; it focuses on the processes through which organization operates in several businesses that are
strategies are achieved somehow linked with one another

SWOT ANALYSIS Unrelated Diversification - a strategy in which an


organization operates multiple businesses that are not
SWOT - anacronym that stands for strengths,
logically associated with one another
weaknesses, opportunities, and threats organizational
strength A skill or capability that enables an Managing Diversification
organization to create and implement its strategies
Portfolio Management Techniques - methods
Organizational Strength - a skill or capability that that diversified organizations use to determine
enables an organization to create and implement its in which businesses to engage and how to
strategies manage these businesses to maximize
corporate performance
BCG Matrix

BCG (Boston Consulting Group) Matrix - a


framework for evaluating businesses relative to
the growth rate of their market and the
organization’s share of the market

Ge Business Screen - a method of evaluating businesses


along two dimensions: (1) industry attractiveness and
(2) competitive position; in general, the more attractive
the industry and the more competitive the position, the
more an organization should invest in a business

TACTICAL PLANNING
Tactical Plans - a plan aimed at achieving tactical goals
and developed to implement parts of a strategic plan;
an organized sequence of steps designed to execute
strategic plans

OPERATIONAL PLANNING
Single-Use Plan - developed to carry out a course of
action that is not likely to be repeated in the future

Program - a single-use plan for a large set of


activities

Project - a single-use plan of less scope and


complexity than a program

Standing Plan - developed for activities that recur


regularly over a period

Policy - a standing plan that specifies the


organization’s general response to a designated
problem or situation

SOP - a standard plan that outlines the steps to


be followed circumstances

Rules and Regulations - describe exactly how


specific activities are to be carried out

Contingency Planning and Crisis Management

Contingency Planning - the determination of alternative


courses of action to be taken if an intended plan is
unexpectedly disrupted or rendered inappropriate

Crisis Management - the set of procedures the


organization uses in the event of a disaster or other
unexpected calamity