S. Management

A multidomestic strategy is an international strategy in which strategic and operating decisions are decentralized to the strategic business unit in each country so as to allow that unit to tailor products to the local market.

An international strategy is a strategy through which the firm sells its goods or services outside its domestic market.

A global strategy is an international strategy through which the firm offers standardized products across country markets, with competitive strategy being dictated by the home office.

A transnational strategy is an international strategy through which the firm seeks to achieve both global efficiency and local responsiveness.

The establishment of a new wholly owned subsidiary is referred to as a Greenfield venture.

International diversification is a strategy through which a firm expands the sales of its goods or services across the borders of global regions and countries into different geographic locations or markets.

A firm uses a business–level cooperative strategy to grow and improve its performance individual product markets.

are business–level alliances in which firms share some of their resources and capabilities complementary ways to develop competitive advantages.

A cooperative strategy is a strategy in which firms work together to achieve a shared objective.

A firm uses a corporate–level cooperative strategy to help it diversify in terms of ducts offered or markets served, or both.

A cross–border strategic alliance is an international cooperative strategy in which firms with headquarters in different nations decide to combine some of their resources and capabilities to create a competitive advantage.

A diversifying strategic alliance is a corporate–el cooperative strategy which firms share some heir resources and abilities to diversify new product or market areas.

An equity strategic alliance is an alliance in which two or more firms own different percentages of the company they have formed by combining some of their resources and capabilities to create a competitive advantage.

is a corporate–level cooperative strategy in which a firm (the franchisor) uses a franchise as a contractual relationship to describe and control the sharing of its resources and capabilities with partners (the franchisees).

A joint venture is a strategic alliance two or more firms create a legally independent company to share some of their resources and capabilities to develop a competitive advantage.

A network cooperative strategy is a cooperative strategy wherein several firms agree to form multiple partnerships to achieve shared objectives.

A nonequity strategic alliance is an alliance in which two or more firms develop a contractual relationship to share some of their unique resources and capabilities to create a competitive advantage

A strategic alliance is a cooperative strategy in which firms combine some of their resources and capabilities to create a competitive advantage.

A synergistic strategic alliance is a corporate–level cooperative strategy in which firms share some of their resources and capabilities to create economies of scope.

are the sum of incentive costs, monitoring costs, enforcement costs, and individual financial losses incurred by principals because governance mechanisms cannot guarantee total compliance by the agent.

An agency relationship exists when one or more persons (the principal or principals) hire another person or persons (the agent or agents) as decision–making specialists to perform a service.

The board of directors is a group of elected individuals whose primary responsibility is to act in the owners’ interests by formally monitoring and controlling the corporation’s top–level managers.

is the set of mechanisms used to manage the relationship among stakeholders and to determine and control the strategic direction and performance of organizations.

is a governance mechanism that seeks to align the interests of managers and owners through salaries, bonuses, and long–term incentive compensation, such as stock awards and options.

are financial institutions such as stock mutual funds and pension funds that control large–block shareholder positions.

typically own at least 5 percent of a corporation’s issued shares.

is the seeking of self–interest with guile (i.e., cunning or deceit).

The market for corporate control is an external governance mechanism that becomes active when a firm’ internal controls fail.

Both the number of large–block shareholders and the total percentage of shares they own define ownership concentration.

The combination structure is a structure drawing characteristics and mechanisms from both the worldwide geographic area structure and the worldwide product divisional structure.

The competitive form is an M–form structure characterized by complete independence among the firm’s divisions which compete for corporate resources.

The cooperative form is an M–form structure in which horizontal integration is used to bring about interdivisional cooperation.

are largely objective criteria used to measure the firm’s performance against previously established quantitative standards.

The functional structure consists of a chief executive officer and a limited corporate staff, with functional line managers in dominant organizational areas such as production, accounting, marketing, R&D, engineering, and human resources.

The multidivisional (M–form) structure consists of a corporate office and operating divisions, each operating division representing a separate business or profit center in which the top corporate officer delegates responsibilities for day–to–day operations and business–unit strategy to division managers.

guide the use of strategy, indicate how to compare actual results with expected results, and suggest corrective actions to take when the difference is unacceptable.

The simple structure is a structure in which the owner–manager makes all major decisions and monitors all activities while the staff serves as an extension of the manager’s supervisory authority.

are largely subjective criteria intended to verify that the firm is using appropriate strategies for the conditions in the external environment and the company’s competitive advantages.

The worldwide geographic area structure emphasizes national interests and facilitates the firm’s efforts II to satisfy local differences.

In the worldwide product divisional structure, decision–making authority is centralized in the worldwide division headquarters to coordinate and integrate decisions and actions among divisional business units.

The Strategic business unit (SBU) form consists of three levels: corporate headquarters, strategic business units (SBUs), and SBU divisions.

The balanced scorecard is a framework firms can use to verify that they have established both strategic and financial controls to assess their performance.

involves specifying the image and character the firm seeks to develop over time.

A heterogeneous top management team is composed of individuals with different functional backgrounds, experience, and education.

refers to the knowledge and skills of a firm’s entire workforce.

An internal managerial labor market consists of a firm’s opportunities for managerial positions and the qualified employees within that firm.

involves relationships inside and outside the firm that help the firm accomplish tasks and create value for customers and shareholders.

is the ability to anticipate, envision, maintain flexibility, and empower others to create strategic change as necessary.

The top management team is composed of the key individuals who are responsible for selecting and implementing the firm’s strategies.

An organizational culture consists of a complex set of ideologies, symbols, and core values that is shared throughout the firm and influences the way business is conducted.

An external managerial labor market is the collection of managerial career opportunities and the qualified people who are external to the organization in which the opportunities exist.

is the use or application of entrepreneurship within an established firm.

The person with an entrepreneurial mindset values uncertainty in the marketplace and seeks to continuously identify opportunities with the potential to lead to important innovations.

are conditions in which new goods or services can satisfy a need in the market.

are individuals, acting independently or as part of an organization, who perceive an entrepreneurial opportunity and then take risks to develop an innovation to exploit it.

is the process by which individuals, teams, or organizations identify and pursue entrepreneurial opportunities without being immediately constrained by the resources they currently control.

is the adoption of a similar innovation by different firms.

is the process of creating a commercial product from an invention.

is a process in which firms creatively discover and exploit opportunities that are outside their domestic markets in order to develop a competitive advantage.

is the act of creating or developing a new product or process.

is taking entrepreneurial actions using a strategic perspective.

specifies the firm’s formal reporting relationships, procedures, controls, and authority and decision–making processes.