MGMT 370 Study Guide Exam 2
MGMT 370 Study Guide Exam 2 MGMT 370
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This 7 page Study Guide was uploaded by ANM Notetaker on Tuesday March 1, 2016. The Study Guide belongs to MGMT 370 at Iowa State University taught by Professor Smith in Winter 2016. Since its upload, it has received 209 views. For similar materials see MANAGEMENT OF ORGANIZATIONS in Business at Iowa State University.
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MGMT 370 Exam 2: CHAPTER 5 Global business (globalization): A strategy in which organizations treat the entire world or major regions of it as the domain for conducting business International Business: The buying, selling, and trading of goods and services across national boundaries. Cartel: A group of firms or nations that agree to act as a monopoly and not compete with each other. Webb-‐Pomerene Export Foreign Corrupt Practices U.K Bribery Act Trade Act Act (FCPA) Allows selected American Outaws direct payoffs to All organizations with firms desiring and bribes of foreign business operations in the international trade to form governments or business United Kingdom can be monopolies in order to officials by American held liable for bribery, compete with foreign companies even if the bribery did not cartels occur within the United Kingdom Import tariff: A tax levied by a nation on goods bought outside its borders and imported into the country. Exchange Controls: Restrictions on the amount of a particular currency that may be ought or sold. Quota: The maximum number of units of a particular product that may be imported into a country Embargo: The suspension of trade in a particular product by the government. Dumping: Occurs when a country or business firm sells products at less then what it costs to produce them GDP: The market value of a nation’s total output of goods and services for a given period Infrastructure: The physical facilities that support its economic activities, such as railroads, highways, ports, airfields, utilities and power plants, schools, hospitals, communication system and commercial distribution system Exchange rate: the ratio at which one nation’s currency can be exchanged for another nation’s currency for gold. World Trade International Organization of Organization World Bank Monetary Fund Economic (WTO) (IMF) Cooperation and Development (OECD) A global association Formally known as Oversee the An international of member countries the International international economic that promotes free Bank for monetary system organization trade Reconstruction and and help ensure comprised of 30 Development stable currencies and countries that accept exchange rates basic principles of -‐ loan money to throughout the free-‐market underdeveloped and world economies and developing countries representative democracy; -‐Promotes policies to improve the well-‐ being of consumers and societies across the world Exporting: the sale of goods and services to foreign markets Importing: the purchase of goods and services from a foreign source. Countertrade agreements: exporting that involves bartering products for other products instead of for currency. Trading company: Acquires foods in one country and sells them to buyers in another country Licensing: A trade arrangement in which company allows other company to use its name, patents, brands and etc for exchange for a fee or royalty. Franchising: a form of licensing which company agrees to provide a franchisee a name, logo and etc in return for a financial commitment and the agreement to conduct business in accordance with the franchiser’s standard of operations. Contract Manufacturing: Occurs when a company hires a foreign company to produce specifies volume of the firm’s product to specification; the final product carries the domestic firm’s name. Joint Venture; when a company that wants to do business in another country finds a local partner. Strategic Alliance: A partnership formed to create competitive advantage on a worldwide basis. Direct investment: the purchase of overseas production and marketing facilities; a company may control the facilities outright. Outsourcing: involves transferring manufacturing or other functions to countries where labors are less expensive. Multinational Corporation North American Free European Union (EU) Trade Agreements (NAFTA) A corporation such as Eliminating tariffs ad An economic and political IBM, Nestle that operates trade restrictions on union of 28 member on a worldwide scale. agricultural and nations that is located manufactured products primarily in Europe. among the three countries Association of Southeast Asian Nations Southern Common Market (Mercosur) (ASEAN) Comprised of then Southeast Asian A political agreement among Bolivia, countries with the goal to promote Argentina, Brazil, Venezuela, Uruguay economic growth and overall progress in and Paraguay the area via trade and security Self reference criterion: an unconscious referencing to the way things are done in one’s own culture and experiences in making global business decisions. CHAPTER 6 Plan: a set of activities intended to achieve goals, whether for an entire organization, department or an individual Mission: a definition of an organization’s fundamental purpose and its basic philosophy Mission statement: a formal written declaration of the organization’s mission. Goal: the final result that a firm wishes to achieve. Strategic plans: plans that are intended to achieve strategic goals: Tactic plans: plans that are designed to achieve tactical goals: Operational plans: plans that are intended to achieve operational goals Distinctive competence: what a firm does well relative to its competitors. SWOT: the evaluation of the organizations internal strengths and weaknesses and opportunities and threats associate with the business external environment. Corporate strategy: the scope and resource deployment components of strategy for the enterprise as a whole Business-‐level strategy: the area of responsibility usually assigned to divisional level managers. Diversification: a strategy of acquiring or developing other businesses that must ultimately be justified by its ability to build stockholder wealth. Related diversification: a firm’s acquisition of a business that has some connection with the company’s existing business Unrelated diversification: the action of diversifying into any business that is potentially profitable of the organization Conglomerates: firms that pursue unrelated diversification strategies. Divestment: a strategy if selling off business that the company no longer wishes to maintain. Strategic business unit: a separate division within a company that has its won mission, goals, strategy and competitors: Portfolio analysis; a technique allowing for managers to visualize their businesses as a set or portfolio using certain common criteria such as growth potential Stars: those businesses that have high markets shares and operate industries experiencing major growth. Question marks: those business that are viewed positively in the sense that they are located in attractive markets, but there is a questions as to their ability to compete given low market shares Cash cows: those businesses that tend to generate excess cash over what is needed due to high market shares in a slow growing market. Dogs: businesses that have only minimal profit or losses due to their low market shares in slow growing economy. Cost leadership: a business level strategy aimed at achieving the overall lowest cost structure in the industry. Differentiation: a business strategy in which the strategic business unit offers a unique service to a customer at a premium price Focus: a business strategy in which the business concentrates on one part or segment of the market and tries to meet the demands of that segment Product life cycle: the cycle of birth, growth, maturity and decline of a product. Birth: initial stage of a product life cycle Growth: dramatic increases in the product’s market share Maturity: product’s market share either slow or no growth Decline: a decrease in the product’s market share. Contingency plans: alternate courses of action to be undertaken if certain organizational or environmental conditions change. CHAPTER 7 Decision: a choice made from alternative courses of action Problem: difference between desired situation and actual situation Programmed decisions: decisions made in response to situations that are routine, structured and fairly repetitive Non-‐programmed decision: decisions made in response to situations that are unique or of major consequence to the organization. Certainty: the condition that exists when decision makers are fully informed about a problem, and its respective outcomes. Risk: the condition that exists when decision makers must rely on incomplete yet reliable information Uncertainty: the condition that exists when little or no factual information is available about a problem, its alternative solutions and its respective outcomes. Classical model: Administrative model: Political Model: -‐A prescriptive approach -‐ A descriptive approach -‐ Based on the idea that (managers are logical, recognizing that people do certain individuals or rational individuals who not always make decisions groups will be able to make decisions that are n with logic and rationality, influence others to the best interest) that that outlines how achieve their goals outlines how managers managers actually do should make decisions. make decisions: also known as the organizational, neoclassical or behavioral model. Decision styles: determines from patterns among an individual’s predispositions such as which situations to avoid, what kind of jobs an individual enjoys, which things he or she dislikes, how an individual communicates, how an individual approaches problems and how he or she makes decisions. Intuition: the immediate comprehension that something is the case, seemingly without the use of any reasoning process conscious analysis. Framing: the tendency to view positively presented information favorably and negatively presented information unfavorably. Escalation of commitment: the tendency to persist with a failing course of action. Risk propensity: a person’s willingness to take risks when making decision. Escalation of commitment: the tendency to persist with a failing course of action. Nominal group technique: a process that involves the use of a highly structured meeting agenda and restricts discussion or interpersonal communication during the decision making process. Devil’s advocate: when a member of the team argues for an alternative position; can be helpful in avoiding groupthink because it encourages team members to carefully consider alternative courses of action.
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