Chapter 11 Vocab
Chapter 11 Concepts
Chapter 12 Vocab
Chapter 12 Concepts
Case Discussions
100

Ethical dilemmas

What is:

situations where there is no agreement over exactly what the accepted principles of right and wrong are, or where none of the available alternatives seems ethically acceptable

100

2 types of stakeholders and give examples of each

What is:

  • Internal – stockholders, employees, managers, board members
  • External – customers, suppliers, creditors, governments, unions, local communities, general public
100
Five elements that refer to the make up of a firm's organizational architecture 

What is:

Formal organizational structure

Control and incentive systems

Organizational culture

Organizational processes

People (human capital)

100

As an organization gets larger it tends to become taller than flatter in terms of organizational structure hierarchy. Why?

There is a limit to the amount of information management can process and the control they can exert over day-to-day operations (stretched too thin and losing control)

Growing organizations often undertake more activities, expanding their product line, diversifying into adjacent activities, vertically integrating, or expanding into new regional or national markets

100

What was the name of the company that HP acquired in the case study?

What is Autonomy

200

Opportunistic Exploitation

unethical behavior sometimes used by managers to unilaterally rewrite the terms of a contract with suppliers, buyers, or complement providers in a way that favors the firm

200

A purpose of strategic control systems and employee incentives (governance mechanisms inside a company)

What is:

  • establish standards and targets to measure performance
  • create systems for measuring and monitoring performance on a regular basis
  • compare actual performance against established targets
  • evaluate results and take corrective action, if necessary
200

Span of Control

What is the number of a manager's direct reports?

200

Two of the five main arguments for decentralization

What is:

1. Top management can become over burdened when decision-making authority is centralized.

2. Motivation research favors decentralization.

3. Decentralization permits greater flexibility--more rapid response to environmental changes.

4. Decentralization can result in better decisions because they are made closer to the individuals who have the information.

5. Decentralization can increase control.

200

Why do you think Apotheker was so eager to make an acquisition when he became CEO?

-new CEO who was intent on making a high-impact acquisition that would transform the firm from being primarily a hardware manufacturer into a fast growing software firm

300

Information Manipulation 

What is:

  • when managers use their control over corporate data to distort or hide information in order to enhance their own financial situation of the competitive position of the firm
300

1 of the 7 things managers can do to ensure that basic ethical principles are adhered to

What is

  • Hire and promote people based on a well-grounded sense of ethics
  • Organizational culture that places high value on ethical behavior
  • Leaders articulate the rhetoric of ethical behavior as well as act in a manner consistent with that rhetoric
  • Create decision-making processes that require employees to consider the ethical dimension of business decisions
  • Embed ethics officers
  • Strong governance processes
  • Enable moral courage
300

Why would an organization use a matrix structure?

To achieve tight coordination between functions particularly R&D, production, and marketing

300

Compare and contrast (1 of each) centralization and decentralization in a firm's vertical differentiation

What is both are a structure in how decision-making authority is based in a firm

Centralization - decision-making authority is concentrated at a high level in the management hierarchy

Decentralization - decision-making authority is distributed to lower-level managers or other employees

300

Is there anything that HP and Autonomy could have done differently to avoid the public backlash and share price drop the company suffered?

-Only half of the board evaluated the proposal of Autonomy as the other half was busy analyzing the decision to jettison the PC business

-Oracle had decided that even if Autonomy's financial statement's were accurate the value wasn't there

-Cash flow analysis wasn't extensive

400

On-the-job Consumption

What is:

a term used by economists to describe the behavior of senior management’s use of a company’s funds to acquire perks (lavish offices, jets, etc.) that will enhance their status, instead of investing the funds to increase stockholder returns

400

Three ways to address the agency problem (governance mechanisms)

What is:

  • Create a Board of Directors that includes both inside directors and outside directors
  • Stock-based compensation
  • Financial Statements and Auditors
  • The Takeover Constraint
  • Governance Mechanisms Inside a Company
400

Norms

What is social rules and guidelines that prescribe the appropriate behavior in particular situations
400

The 3 different dimensions of organizational structure

What is vertical differentiation, horizontal differentiation, and integrating mechanisms

400

Does innovation at apple come from the bottom up? Or the Top down. (Implying executives at the top, lower employees at the bottom.)

What is top down

500

Anticompetitive behavior

What is:

  • Anticompetitive behavior – a range of actions aimed at harming actual or potential competitors, most often by using monopoly power, and thereby enhancing the long-run prospects of the firm
500

What are the 4 types of Balances Scorecard Models and what does each one address?


What is:

  • Financial perspective – ROIC, cash flows, and revenue growth
  • Customer perspective – satisfaction, product reliability, on-time delivery, level of service
  • Internal perspective - efficiency, timeliness, employee satisfaction
  • Innovation and learning - # new products introduced, % revenues generated from new, R&D
500

Performance Ambiguity

What is the difficulty of identifying with precision the reason for the high (or low) performance of a subunit such as a function or team
500

How can culture be used as a control mechanism?

  • culture can be viewed as a control mechanism that mandates expected behavior (Ex: Bill Gates)
500

What does DRI stand for in apple’s reference to accountability?

Directly responsible individual

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