Term
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Definition
| an economy where wealth is created through the effective management of knowledge workers instead of by the efficient control of physical and financial assets |
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Term
| Intellectual Capital (CH 4) |
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Definition
the difference between the market value and the book value of the firm, including assets such as reputation, employee loyalty and commitment, customer relationships, company values, and the experience and skills of employees.
= Market value of firm - Book value of the firm |
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Term
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Definition
| The individual capabilities, knowledge, skills, and experience of a company's employees and managers |
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Term
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Definition
| the network of friendships and working relationships between talented people both inside and outsife the organization |
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Term
| Explicit Knowledge (CH 4) |
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Definition
| knowledge that is codified, documented, easily reporiduced, and widely distributed |
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Term
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Definition
| Knowledge that is the mind of employees and is based on their experiences and backgrounds |
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Term
| Intellectual Property Rights |
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Definition
| Intangible property owned by a firm in the forms of patents, copyrights, trademarks, or trade secrets. |
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Term
| Diamond of national advantage (CH 7) |
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Definition
| a framework for explaining why countries foster successful multinational corporations, consisting of four factors - factor endowments; demand conditions; related and supporting industries; and firm strategy, structure, and rivalry |
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Term
| Factor endowment (national advantage) (CH 7) |
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Definition
| a nation's position in factors of production |
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Term
| Demand Conditions (national advantage) (CH 7) |
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Definition
| the nature of home-market demand for the industry's product or service |
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Term
| Related and suporting industries (national advantage) (CH 7) |
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Definition
| the presence, absense, and quality in the nation of suplier industries and other related industries that suply services, support, or technology to firms in the industry value chain |
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Term
| Firm strategy, structure, and rivalry (national advantage) (CH 7) |
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Definition
| the conditions in the nation governing how companies are created, organized, and managed, as well as the nature of domestic rivalry |
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Term
| Motivations for International Expansion - Increase Market Size (CH 7) |
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Definition
increase the size of potential markets for a firm's products and services
China and India because ranks of middle class have increased |
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Term
| Motivations for International Expansion - Arbitrage opportunities (CH 7) |
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Definition
| an opportunity to profit by buying and selling the same good in different markets. |
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Term
| Take advantage of arbitrage opportunities |
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Definition
second advantage of national expansion
firm can buy where it is cheap and sell where capital is expensive
more variable to larger firm's - buy in bulk |
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Term
| Extend a Product's Life Cycle |
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Definition
| of a product - it is in maturity stage in a firm's home country but that has greater demand potential elsewhere |
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Term
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Definition
| potential threat to a firm's operations in a country due to ineffectiveness of the domestic political system |
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Term
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Definition
| potential threat to a firm's operations in a country due to economic policies and conditions, includinh propety rights laws and enforcement of those laws |
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Term
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Definition
| potential threat to a form's operations in a country due to the problem that managers have making decisions in the contect of foreign markers |
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Term
| International strategy (CH 7) |
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Definition
| strategy based on firm's diffusion and adaptation of the parent companies' knowledge and expertise to foreign markets, used in industries where the pressures for both local adaptation and lowering costs are low |
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Term
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Definition
| strategy based on firm's centralizion and control by the corporate office, with the primary emphasis on controlling costs, and used in industries where the pressure for local adpatation is low and the pressure for lowering costs is high |
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Term
| Multidomestic strategy (CH 7) |
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Definition
| a strategy based on firms' differentiating their products and services to adpat to local markets, used in industries where the pressure for local adaptation is high and the pressure for lowering costs is low |
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Term
| Transnational Strategy (CH 7) |
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Definition
| strategy based on firm' optimizing the tradeoffs associated with efficiency, local adaptation, and learning, used in industries where the pressures for both local adaptation and lowering costs are high |
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Term
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Definition
| increasing international exchanging of goods, services, money, people, ideas, and information; and the increasing similarity of culture, laws, rules, and norms within a region such as Europe, North American, or asia |
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Term
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Definition
| groups of countries agreeing to increase trade between them by lowering trade barriers |
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Term
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Definition
| producing goods in one country to sell to residents of another country |
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Term
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Definition
| a contractual arrangement in whicha company receives a royalty oe fee in exchange for the right to use its trademark. patent, trade secret, or other valuable intellectual property |
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Term
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Definition
| a contractual arrangement in which a company receives a royalty ir fee in exchange for the rights to use its intellectual propert; it usually involves a longer time period that licensing and includes other factors, such as monitoring of operations, training, and advertising |
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Term
| Wholly Owned Subsidiary (CH 7) |
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Definition
a business in which a multinational company owns 100 percent of the stock
Pros and Cons ? |
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Term
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Definition
| the creation of new value by an existing organization or new venture that involves the assumptions of risk |
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Term
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Definition
a family business, broadly defined, is a privately held firm in which family members have some degree of control over the strategic directions of the firm and intend for business to remain within the family
comprise 80-90% of all business enterprises in the U.S. |
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Term
| Opportunity Recognition (CH 8) |
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Definition
| the process of discovering and evaluating changes in the business environment, such as a new technology, sociocultural trends, or shifts in consumer demand, that can be exploited |
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Term
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Definition
| the opportunity must be attractive in the marketplace; there must be market demand for the new product or service |
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Term
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Definition
| the opportunity must be practical and physically possible |
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Term
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Definition
| the opportunity must be attractive long enough for the development and deployment to be successful; that is, the window of opportuntiy must be open long enough for it to be worthwhile |
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Term
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Definition
| the opportunity must be potentially profitable; that is, the beneficial must surpass the cost of development by a significant margin |
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Term
Financial Resources (CH 8)
Angel Investors |
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Definition
| private individuals who provide equirt investments for seed capital during the early stages of a new venture |
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Term
| venture capitalists (CH 8) |
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Definition
| companies organized to place their investors' finds in lucrative business opportunities |
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Term
| entrepreneurial leadership |
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Definition
| leadership appropriate for new ventures that requires courage, belief in ones convictions, and energy to work hard even in difficult circumstances; and embody vision, dedication and drive, and commit to excellence. |
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Term
| entreneurial strategy (CH 8) |
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Definition
| a strategy that enables a skilled and dedicated entrepreneur, with a viable access to sufficient resources, to successfully launch a new venture |
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Term
| poineering new entry (CH 8) |
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Definition
| a firm's entry into an industry with a radical new product or highly innovative service that changes the way busness is conducted |
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Term
| imitative new entry (CH 8) |
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Definition
| a firm's entry into an industy with products or services that capitalize on proven market successes and that usually has a strong marketing orientation |
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Term
| adaptive new entry (CH 8) |
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Definition
| a firm's entry in an industry by offering a product or service that is somewhat new and sufficiently different to create value for customers by capitalizing on current market trends |
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Term
| New competitive action (CH 8) |
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Definition
| acts that might provoke competitors to react, such as new market entry, price cutting, imitating successful products, and expanding production capacity |
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Term
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Definition
| a firm's awareness of its closest competitors and the kinds of competitive actions they might be planning |
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Term
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Definition
major commitments of distinctive and specific resources to strategic initiatives
entering new markets
new product introductions
changing production capacity
mergers/alliances |
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Term
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Definition
refinements or extensions of strategues usually involving minor resource commitments
price cutting (or increases)
Product/service enhancements
Increased marketing efforts
New distribution channels
easy |
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Term
| Informational control (CH 9) |
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Definition
| a method of organizational control in which a firm gathers and analyzes information from the internal and external environment in order to obtain the best fit between the organization's goals and stategic environment |
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Term
| Behavioral control (CH 9) |
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Definition
| a method of organizational control in which a firm influences the actions of employees through culture, rewards, and boundries |
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Term
| corporate governance (CH 9) |
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Definition
the relationship among various participants in determining the direction and performance of corporations. the primary participants are
1. shareholders
2. management
3. the board of directors |
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Term
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Definition
| theory of the relationship between principals and their agents, with emphasis on two problems: (1) the conflicting goals of principals and agents, along with the difficulty of principals to monitor the agents, and (2) the different attitudes and preferencs toward risk and principles and agents |
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Term
| board of directors (CH 9) |
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Definition
a group that has fiduciary duty to ensure that the company is run consistently with the long0term interest sof the ownders, or shareholders, of a corporation and that acts as an intermediary between the shareholders and management
1. Select, regularly evaluatie, and if neccessary, replace the CEO. Determin management compensation. Review succssion planning.
2. Review and, where appropriate, approve the financial objectives, major strategies, and plans of the corporation.
3. Provide adviceand councel to top management |
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Term
| simple organizational structure (CH 10) |
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Definition
| an organizational form in which the owner-manager makes most of the decisions and controls activities, and the staff serves as an extension of the top exectutive |
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Term
| functional organization structure |
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Definition
an organizational form in which the major functions of the firm, such as productuon, marketing, R&D, and accounting, are group internally
know advantage and disadvantage |
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Term
| divisional structure (CH 10) |
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Definition
an organiztional form in which products, projects, or product markets are grouped internally
adv and dis |
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Term
matrix organizational structure (CH 10)
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Definition
| an organizational form in which there are multiple lines of authority and some individuals report to at least two managers |
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Term
| modular organization (CH 10) |
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Definition
| an organization in which nonvital functions are outsourced, which uses the knowledge and expertise of outside suppliers while retaining strategic control |
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Term
| virtual organization (CH 10) |
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Definition
| a continaully evolving network of independent companies that are linked together to share skills, costs, and access to one another's markets |
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Term
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Definition
| the process of transforming organizations from what they are to what the leader would have them become |
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Term
| setting a direction (CH 11) |
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Definition
| a strategic leadership activity of strategy analysis and strategy formulation |
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Term
| designing the organization(CH 11) |
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Definition
| a strategic leadership activity if building structures, teams, systems, and organizational processess that facilitate the implementation of leader's vision and strategies |
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Term
| excellent and ethical organizational culture (CH 11) |
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Definition
| an organizational focused on core competencies and high ethical standards |
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Term
| integrative thinking(CH 11) |
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Definition
| a process of reconciling opposing thoughts by generating new alternatives and creative solutions rather than rejecting one thought in favor of another |
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Term
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Definition
| take stock of what features of the decision you consider relevant and important. |
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Term
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Definition
| make a mental map of the casual relationships between the features, that is, how the various features are related to one another |
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Term
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Definition
| use the mental map to arrange a sequence of decisions that will lead to a specific outcome |
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Term
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Definition
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Term
| barriers to change (CH 11) |
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Definition
| characteristics of individuals and organizations that prevent a leader from transforming an organization |
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Term
| wested in the status quo (CH 11) |
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Definition
| a barrier to change that stems from people's risk aversion |
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Term
| potential Downside to social capital |
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Definition
| groupthink - a tendency in an organization for individuals not to question shared beliefs |
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Term
| dynamic capabilities (CH 4) |
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Definition
| a firm's capacity to build and protect a competitive advantage, which rests on knowledge, assets, competencies, complementary assets, and technologies. Dynamic capabilities include the ability to sense and seize new opportunities, generate new knowledge, and reconfigure existing assets and capabilities |
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