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Exam 2 Learning Guide

Chapter 5 Global Management and Cultural Diversity p. 104: Any misstep in global management will quickly be met by what? By bad press, public, criticism, damaged reputation, and consumer defections. p. 108: Schermerhorn points out six reasons for pursuing international business. Whats his point about profits? Global operations offer new and greater profit potential. What is his point about customers? Global operations offer new markets to dell products. Suppliers? Global operations offer access to needed products and services. Capital? Global operations offer access to financial resources. Labor? Global operations offer access to lower labor costs. And risk? Global operations spread assets among multiple countries. p. 109, margin: What happens in global sourcing? Materials or services are purchased around the world for local use. p. 110, margin: What is exporting? Local products are sold abroad to foreign customers. What is importing? It involves the selling in domestic markets of products acquired abroad. What is a licensing agreement? It's when a local firm pays a fee to a foreign firm for rights to make or sell its products. What does the license typically grant? Access to a unique manufacturing technology, special patent, or trademark. What does foreign direct investment involve? Involves setting up and buying all or part of a business in another country. What is a joint venture? It operates in a foreign country through co-ownership by foreign and local partners. p. 111: What is a foreign subsidiary? It is a local operation completely owned by a foreign firm. p. 112: What is the World Trade Organization? It is a global organization established to promote free trade and open markets around the world. What are WTO members supposed to do? They agree to negotiate and resolve disputes about tariffs and trade restrictions. Whats a tariff? Taxes that governments impose on imports.

What does protectionism give? Favorable treatment to domestic businesses. p. 113: The goal of most tariffs and protectionism is what? It to protect local firms from foreign competition and save jobs for local workers. Margin: What is NAFTA? It is the North American Free Trade Agreement linking Canada, the US, and Mexico in an economic alliance. p. 114, margin: What is the European Union? It is political and economic alliance of European countries. Margin: What is a global corporation? It is multinational enterprise (MSE) or multinational corporation (MNC) that conducts commercial transactions across national boundaries. p. 117: What are sweatshops? They employ workers at very low wages for long hours in poor working conditions. p. 118: What is culture? Is a shared set of beliefs, values, and patterns of behavior common to a group of people. What is culture shock? It is the confusion and discomfort a person experiences when in an unfamiliar culture. p. 121: Geert Hofstede identified five cultural dimensions that can be useful for gaining a better understanding of another countrys culture. One of these dimensions is power distance. What is it? It is the degree to which a society accepts or rejects the unequal distribution of

power among people in organizations and the institutions of society. p. 122: What is individualism-collectivism? It is the degree to which a society emphasizes individuals and their selfinterests. Uncertainty avoidance? It is the degree to which a society is uncomfortable with risk, change, and situational uncertainty, versus having tolerance for them. Masculinity-femininity? It is the degree to which a society values assertiveness and materialism versus feelings, relationships, and quality of life. p. 123: What is time orientation? It is the degree to which a society emphasizes short-term or long-term goals and gratifications. p. 124: Schermerhorn instructs that we should always be looking for new management ideas, but what caveat1 does he follow that up with? But we should hesitate to accept any practice, no matter how well it appears to work somewhere else, as a universal prescription to action. Chapter 6 Entrepreneurship and New Ventures p. 133: What is self-management? It's an ability to use an objective understanding of one's strengths and weaknesses to continuously improve and adapt to meet life's challenges. What point is Schermerhorn making in his think of it this way paragraph? 1 A modifying or cautionary detail to be considered
when evaluating, interpreting, or doing something.

In order to be strong in self-management you must have the ability to understand yourself individually and in the social context, to access personal strengths and weaknesses, to exercise initiative, to accept responsibility for accomplishments, to work well with others, and to adapt by continually learning from experiences in the quest for self-improvement. One of the best ways to check your capacity for self-management is to examine how you approach college, your academic courses, and the rich variety of development opportunities available on and off campus. What questions does Schermerhorn offer for conducting this self examination? What activities are you involved in? How well do you balance them with academic and personal responsibilities? Do you miss deadlines or turn in assignments pulled together at the last minute? Do you accept poor or mediocre performance? Do you learn from mistakes? p. 135: What is a classic entrepreneur? Someone who is willing to pursue opportunities in situations others view as problems or threats. Margin: What does a first-mover advantage come from? From being first to exploit a niche or enters a market. p. 138, Management Smarts 6.1: Entrepreneurs are born, not made, right? Why or why not? Not true! Talent gained and enhanced by experiences is a foundation for entrepreneurial success. Are entrepreneurs gamblers? Not true! Entrepreneurs are risk takers, but the risks are informed and calculated.

Is money the key to entrepreneurial success? Not true! Money is no guarantee of success. There's a lot more to it than that; many entrepreneurs start with very little. Do you have to be young to be an entrepreneur? Not true! Age is no barrier to entrepreneurship; with age often comes experience, contacts, and other useful resources. Do you have to have a degree in business to be an entrepreneur? Not true! You may not need a degree at all. Although a business degree is not necessary, it helps to study and understand business fundamentals. p. 141: What is a franchise? It's when a business owner sells to another the right to operate the same business in another location. Margin: What is a startup? It is a new and temporary venture that is trying to discover a profitable business model for future success. p. 146: What is a business plan? It describes the details needed to obtain start-up financing and operate a new business. How do banks and other financiers use them? They want see it before they loan money or invest in a new venture; senior managers want to see one before they allocate scarce organizational resources to support a new entrepreneurial project. How is the detailed thinking required to prepare a business plan helpful? It can contribute to the success of the new initiative.

p. 149: Schermerhorn discusses two major ways an entrepreneur can obtain outside financing needed to sustain and grow a new venture. What is debt financing? It involves going into debt by borrowing money from another person, bank, or financial institution. What is equity financing? It is an alternative to debt financing that involves giving ownership shares in the business to outsiders in return for their cash investments. Equity financing is usually obtained from who? Investors. What is an initial public offering? It is when shares of stock in the business are first sold to the public and begin trading on a stock exchange. Chapter 7 Information and Decision Making p. 163: What is problem solving? The process of identifying a discrepancy between an actual and a desired state of affairs, and then taking action to resolve it. p. 166: The ability to handle crises may be the ultimate test of a managers problemsolving capabilities. Unfortunately, research indicates what? That managers may react to crises by doing the wrong things - isolating themselves and trying to solve the problem alone or in a small closed group. p. 167, Management Smarts 7.1: What does Schermerhorn say about value the skeptic? Dont look for and too comfortable with agreement; appreciate skeptics and let them help you see things differently.

p. 169: Step 1 in the decision-making process is to identify and define the problem. Schermerhorn says three common mistakes can occur during this critical first step in decision making. What is mistake number 1? Defining the problem too broadly or too narrowly. How should managers define problems? Managers should define problems in ways that gives them the best possible range of problem-solving options. p. 170: What is mistake number 2? Focusing on symptoms instead of causes. What does Schermerhorn say about root causes? Although managers should be alert to spot problem symptoms (e.g. a drop in performance) they must dig deeper to address root causes (such as discovering that a worker needs training in the use of a new computer system). What is mistake number 3? Choosing the wrong problem to deal with at a certain point in time. What does Schermerhonr say about have to set priorities? That we have to set priorities and deal with the most important problems first. p. 171: What does Schermerhorn say about ultimately, any course of action? That it can only be as good as the quality of the alternatives considered; the better the pool of alternatives, the more likely that any actions taken will help solve the problem at hand. What is a common decision-making error? Abandoning the search for alternatives too quickly. This often happens when?

Under pressure of time and other circumstances. What is one way to minimize this error? Through consultation and involvement. Margin: What does an optimizing decision do? It gives the absolute best solution to the problem. p. 172: What is the lack-of-participation error? (This is . . . for implementation)
This is a failure to adequately involve in the process those persons whose support is necessary to implement the decision. Managers who use participation wisely get the right people involved in problem solving from the beginning. When they do, implementation typically follows quickly, smoothly, and to everyones satisfaction. Participation in decision making makes everyone better informed and builds the commitments needed for implementation.

It occurs when focusing only on information that confirms a decision already made. Chapter 8 Planning Processes and Techniques p. 187: Planning should focus on what? It should focus attention on objectives and goals that identify the specific results or desired outcomes that one intends to achieve. What are stretch goals? Performance targets that we have to work extra hard and really stretch to reach. Schermerhorn lists four ways good planning helps us. What does he mean by priority oriented? Making sure that the most important things get first attention. What does he mean by action oriented? Keeping a results-driven sense of direction. What does he mean by advantage oriented? Ensuring that all resources are used to best advantage. What does he mean by change oriented? Anticipating problems and opportunities so they can be best dealt with. And like other decision making in organizations, the best planning includes what? The best planning includes the active participation of those people whose work efforts will eventually determine whether or not the plans are well implemented. p. 188: Planning helps avoid the complacency trap. What is that? Simply being carried along, by the flow of events, and it (planning) directs our attention toward priorities.

p. 174: When does the availability bias occur? When people assess a current event or situation by using information that is readily available from memory. p. 175: When does the representativeness bias occur? When people assess the likelihood of something happening based on its similarity to a stereotyped set of occurrences. Anchoring and adjustment bias? Occurs when decisions are influenced by inappropriate allegiance to a previously existing value or starting point. p. 176: Framing error? Occurs when a problem is evaluated and resolved in the context in which it is perceived either positively or negatively. What is confirmation error?

p. 189: The first step in the planning process setting objectives and standardsis a prerequisite to effective control. The objectives set by planning make it easier to do what? To measure results and take action to improve things as necessary. p. 190: And unless everyone understands an organizations long-term plans and objectives, what? (There is . . . significant results.) There is always risk that the pressures of daily events will divert attention from important tasks. p. 191: What are strategic plans? These are longer-term plans that set broad directions for an organization and create a framework for allocating resources for maximum performance impact. Margin: What is a vision? It clarifies the purpose of the organization and expresses what it hoped to be in the future. p. 193: Procedures describe what? They describe rules for what actions are to be taken in specific situations. How does a procedure differ from policy? (Whereas) Whereas a policy sets a broad guideline, procedures to define precise actions to be taken. p. 194: What is forecasting? It is the process of predicting what will happen in the future. pp. 194195: What does contingency planning identify? Alternatives courses of action that can be implemented if circumstances change. p. 195: What does scenario planning involve?

Identifying several alternative future scenarios or states of affairs that may occur. p. 196: What is benchmarking? The use of external and internal comparisons to better evaluate ones current performance and identify possible ways to improve for the future. What are best practices? Things that people and organizations do that help them achieve superior performance. p. 198: Great goals tend to be specific, timely, measurable, challenging, and attainable. What is meant by specific? Clearly target key results and outcomes to be accomplished. What is meant by timely? Linked to specific timetables and due dates. What is meant by measurable? Described so results can be measured without ambiguity. What is meant by challenging? Include a stretch factor that moves toward real gains. What is meant by attainable? Although challenging, realistic and possible to achieve. Goal alignment is when goals set everywhere in the organization help advance its overall mission and goals and plans are well integrated across the many people, work units, and levels of an organization. Why is goal alignment important? (We sometimes work)

We sometimes work very hard to accomplish things that simply dont make of difference in organizational performance. p. 200: What is one of the things that research is most clear about? That when people participate in setting goals they gain motivation to work hard to accomplish them. What are some key things participation and involvement in the planning process can increase? (The understanding . . . improving implementation) It can also increase the understanding and acceptance of plans, as well as commitment to their success. And even though participatory planning takes more time, it can improve results by improving implementation. Behaviors Associated with Success in MGMT 201 Buying the textbook before the semester begins Bringing your textbook to every class meeting Not sitting next to a someone who will distract you in class Keeping up with the professor on the exam study guide Listening carefully when the professor talks Reading and periodically reviewing the tips listed at the top of the Managers Manual format Using the Writing Room to improve your writing Tracking your credits on Blackboards Grade Center and promptly bringing any discrepancies to your professors attention Keeping hardcopies of your completed Managers Manual sections until youve received credit for them on Blackboard

Maintaining good class attendance Finding someone who can do a good job as a fresh pair of eyes (i.e., proofreading) for you