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MGMT 4842 notes week of 9/26-30/2016

by: Lindsay Taylor

MGMT 4842 notes week of 9/26-30/2016 MGMT 4842

Marketplace > East Carolina University > Management > MGMT 4842 > MGMT 4842 notes week of 9 26 30 2016
Lindsay Taylor
GPA 3.47
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About this Document

chapter 8 and chapter 9 notes; towards exam 2 Prati class at ECU
Strategic Management
Dr. Prati
Class Notes
Management, ethics, diversification




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This 3 page Class Notes was uploaded by Lindsay Taylor on Thursday September 29, 2016. The Class Notes belongs to MGMT 4842 at East Carolina University taught by Dr. Prati in Fall 2016. Since its upload, it has received 6 views. For similar materials see Strategic Management in Management at East Carolina University.


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Date Created: 09/29/16
MGMT  4842  Notes  for  the  week  9/26-­‐30/2016   *highlighted  parts  are  likely  test  Qs   CHAPTER  8   •   Two  types  of  diversification:     1.  Related:  you  know  the  industry  &  value  chain  and  are  trying  ot  acquire   companies  within  that  industry;  you  are  looking  for  a  “strategic  fit”   between  the  two  companies;  strategic  fit:  allows  for  efficiency  and  cost   savings;  found  all  along  the  value  chain   2.  Unrelated:  buy  into  a  totally  different  industry  (ex:  Pepsi  bought  Frito -­‐ Lay);  organizations  focus  on  building  and  maintaining  a  portfolio  of   industries;  NOT  strategic  fit,  more  of  a  “financial  resources  fit”;                    financial  resources  fit:  trying  to  balance  portfolio  to  decrease  risks   and  increase  profits;  Stars,  Cash  Cows,  Cash  Hogs  (?’s  and  Dogs)     •   Tests  for  Diversification   Cost  of  Entry  Test     How  much  does  it   Related   cost  to  enter  the   Unrelated   industry?   Industry   Potentially  valuable   Related     Attractiveness  Test   returns  on   Unrelated   investment   Better  Off  Test   Provides  competitive   Related  ONLY   advantage  (ONLY   applies  to  strategic   fit)     •   Why  Related  Diversification?   Increased  market  share   Keep  up  with  new  technologies   Keep  up  with  new  customer  demands   Find  strategic  fit  for  cost  and  efficiency   Get  into  emerging  markets   Save  yourself  from  a  dying  industry  (VHS  tapes  for  example)   Protect  against  industry  risks   •   Why  Unrelated  Diversification?   Lower  overall  risk   Expand  from  dying  company   Increase  market  share   However,  disadvantages  include:  increased  administration  and   management  scope,  no  competitive  advantage  shared  between  two   companies   •   Stars:  emerging  markets  that  are  expected  to  make  profits   •   Cash  Cows:  never  disappear  and  always  making  money   •   Cash  Hogs  (?’s  and  Dogs):  have  high  potential  but  little  profit;  dying   industries     CHAPTER  9   •   Ethics  change,  Laws  do  not   •   Ethical  Relativism:  when  in  Rome  do  as  the  Romans  do   •   Ethical  Universalism:  same  ethics  applied  EVERYWHERE   •   Moral  manager:  ethical  and  lawful   •   Immoral  manager:  looks  only  for  their  gain;  no  regar d  for  ethics   •   Motivation  in  an  organization  for  unethical  behavior:   1.  Selfish  interests   2.  Pressure  from  above  (upper  management)   3.  Culture  (workplace  norms)   2   •   How  can  you  control  employees  and  their  ethics?   1.  Setting  norms  of  ethical  behavior   2.  Establishing  policies  that  are  ethical   •   Why  do  businesses  need  to  establish  ethical  policies?   1.  Corporate  image  protection   2.  Monetary  loss  protection   3.  Protection  form  things  like  sexual  harassment  suits   •   Why  is  Social  Responsibility  good?   1.  Good  PR     3  


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