-the process by which people respond to oppurtunities and threats by choosing goals, analyzing options, and selecting courses of action

non-routine that occurs in response to unusual, unpredictable, and unique opportunities and threats, when there are NO rules to follow, and decisions are made based on uncertain or ambiguous information using intuition and judgment

-had the most money and best contracts

-1962 the dominate record company

–they dismissed the Beatles because they didn’t like their sound

CEO of Lucnet (telecommunications)

-Motorola CEO

-He wanted to review every decision and wanted to give everything his personal attention –Motorola couldn’t keep up with the growth of the industry because of his decisions gone bad

Classical Novel of Decision Making

-tradition theory, elementary           

 1. assumes that decision maker can identify and evaluate all possible alternatives               

2. assumes that we can clearly attach a known consequence to every possible alternative           

3. assumes that we will only use reason, logic, and analysis to make decisions (rationale)- not biased by opinions or emotions-not subjective

-how we making decisions with bounded rationality

1. A lot of emotion influencing the decision

2. A lot of pressure for conformity

3. Will not tolerate criticism

4. If one person tends to dominate

How to use a Devil's advocate

1. Appoint one person to be the DA for the meeting

2. will not be randomly cynical; will point our problems

3. devil’s advocate will stand up for unpopular ideas

4. will point out problems in the way the final alternative is selected

-selling, generating revenue

-the actual question

1. manager must provide employees with opportunity and ability to take risk 

2. remember that when people take risks they will occasionally fail

3. periodically you must reward the right kind of failure (let failure go and recognize the effort)

1. must be face to face           

2. everyone must say things that are crazy, wrong, off the wall           

3. group members are not allowed to evaluate these crazy, wrong statements (no negative reactions)           

4. write everything on a board – make all visible           

5. say something good AND bad about every idea

1. WHO: Who are out target customers? Who are we trying to serve?           

2. WHY: Why are we in business? Do I know the needs and the wants of these target customers? What is the unmet need?           

3. WHAT: What types of products and services can I use?           

4. WHERE: What geographic markets?           

5. HOW: How will we position ourselves relative to the competition?

1. Will define the business

2. Allows you to set major goals

3. Provides a sense of direction

4. Stretches everyone towards superior performance

1. strategic planning

2. tactical planning

3. operating/operational plans

1. Concentration strategy (a.k.a. Focus strategy)

2. Diversification

3. Vertical Integration

4. International Expansion

5. Low Cost/Cost Leader Strategy

6. Differentiation Strategy

-one single thing in a single line of business and you do it well. All attention and resources are focused to this one thing.

A. Related Diversification- many types of business, but they all have some kind of relationship

B. Unrelated Diversification-many different kinds of businesses

A. Forward Vertical Integration- when you move closer to the customer

B. Backward Vertical Integration-eliminate middle man and therefore get more profit, control everything about the supply chain, reduce risk

A. Multidomestic- customize locally, more effective

B. Global- standardize, more efficient

Q: To what extent do we customize our products for different national cultures versus standardizing our product worldwide for global efficiency? (max output with min input)

-sell for cheap price, but make up for it with the mass quantity you sell

customize, make expensive products and do not sell many, but make up for it in expensive cost

-management structure for personal space products

-for international expansion strategy

-where organizational learning is very important

-knowledge must be shared across company

-downfall: have 2 bosses

-for high-tech companies

-good for law firms and advertising agencies

- horizontal concept- number of people who directly report to you –should be 6, 7, 8           

-important b/c too little that report to you is wasteful and too many is inefficient           

-the higher up the position, the narrower the span of control

-vertical concept- how many layers of management from top to bottom           

-long chain is bad for first hand information for the CEO

Procuring- finding and getting things that are unreachable Transform- assembling, refining, manufacturing

Holding- inventory

Promoting- creates value, people will pay more for value

Distribution- getting the product where the customers are

Service- customer service creates value

-When you get home write them a THANK YOU LETTER, not an email it is more thoughtful!

-A thank you letter is just as important as a cover letter, HANDWRITTEN

-General Motors – huge loss

-management is messy b/c its complex

-overseas in doing very well but home market is doing poorly                            (paradox)

-has used more expensive materials to improve vehicles, but                            consumers do not want more expensive cars

Cubical Culture: A Modern Conundrum

-when work is invisible so are its satisfactions

-it’s hard to find gratification from invisible work

- have to find ways to give them sense of accomplishment

-Forget Yahoo!

– basic commodities –the things    that will shape our future (iron ore, copper, raw materials)           

-the old world stuff is now new (no longer digital, now basic industries)

- the cutting edge is in low tech. (the highest tech is going into this industry)

-wanted honest constructive feedback from boss 

-wasting time on Ebay- boss said nothing           

-too kind in the short run is really being too heartless in the long run           

-paradox

The fat part is the discernment (the top)

"Insecure people are on a continual quest for...

...he turns and looks for the fault within himself."

1. They anticipate problems

2. They accept the truth

3. They see the big picture

4. They handle one thing at a time

5. They don't give up a major goal when they're down