ADMS 4900 Lecture Notes - Lecture 5: Market Power, Call Option, Cash Flow

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taupedog644

28 Mar 2018

School

York University

Department

Administrative Studies

Course

ADMS 4900

Professor

Barry O' Brien

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Document Summary

Business level (how to achieve sustainable advantage in given business) vs. corporate-level strategy (choice of businesses a corporation should compete in, and how those businesses should be managed to jointly create more value than free-standing units) Firms need to consider various types of diversification, rationale for contemplating each type of diversification, and means to achieve diversification. Diversification initiatives (i. e. m & as, strategic alliances, and internal development) must be justified by creation of value for shareholders & stakeholders. Though diversification is expensive & risky for companies, they diversify in hopes of creating organic synergy. Elements that firms need to think about when looking for synergy: Primary potential benefits come from the sharing of intangible resources (i. e. brand, technology) & tangible resources (i. e. production, distribution) so costs are spread over larger revenue base. Primary potential benefits come from value created by the corporate office (i. e. leveraging support activities in the value chain such as information systems or hr practices.

Related Questions

Business management

QUESTION 1

Which of the following outlines the organization's purpose, assumptions, values, and direction?

Mission

Purpose

Strategic plan

Strategic goal

Tactical goal

2 points

QUESTION 2

Scientific management focuses on

		improving the efficiency of the individual worker.
		managing the overall organization.
		using capital more efficiently.
		enhancing the social aspects of the workplace.
		creating mathematical models of organization processes.

2 points

QUESTION 3

The idea that manufacturing costs per unit decrease as the number of units produced increases is known as

economies of scale.

venture capitalism.

a franchising agreement.

first-mover advantage.

None of these.

2 points

QUESTION 4

The component of strategy that indicates how the organization intends to allocate resources is

resource deployment.

scope.

competitive advantage.

synergy.

None of these.

2 points

QUESTION 5

The process of choosing one alternative from among many alternatives is called

satisficing.

problem solving.

bounded rationality.

decision making.

None of these.

2 points

QUESTION 6

Mercedes-Benz sells high quality automobiles at high prices. It uses a(n)

differentiation strategy.

low-cost strategy.

diversification strategy.

related diversification strategy.

BCG strategy.

2 points

QUESTION 7

Which of the following is NOT generally considered to be a role performed by small businesses?

		Creation of new jobs
		Development of new products
		Manufacture of materials for large businesses
		Distribution of products made by large businesses
		Provision of capital for expansion of large businesses

2 points

QUESTION 8

Which of the following is a disadvantage of group decision making?

		More alternatives are likely to be generated.
		More information will be brought to bear on the problem.
		More time will be needed to make the decision.
		More communication about the decision will result.
		All of these.

2 points

QUESTION 9

Which of the following is an example of an owner of a business?

		Individual investors who buy stock in that business
		Partners
		People who have legal property rights to that business
		Individuals who finance and start up a new business
		All of these.

2 points

QUESTION 10

The best alternative is the most ____ alternative.

efficient

controllable

profitable

effective

valid

2 points

QUESTION 11

Which of the following decision-making models is based on the belief that human behavior is often imperfect?

Rational

Emotional

Classical

Behavioral

Sequential

2 points

QUESTION 12

A disadvantage of using interacting groups to make decisions is

group politics.

a void of expert opinion.

an increase in programmed costs.

faster decision making.

too much brainstorming.

2 points

QUESTION 13

Nokia and Samsung make cell phones that operate on the Microsoft system. They operate in the ____ industry.

transportation

manufacturing

retailing

services

wholesaling

2 points

QUESTION 14

All of the following are advantages of group decision making EXCEPT

groupthink may occur.

better decisions generally emerge.

enhanced communication may result.

more information and knowledge are available.

None of these.

2 points

QUESTION 15

Facebook operates in which industry?

Construction

Wholesaling

Manufacturing

Services

All of these.

2 points

QUESTION 16

Four friends home from college want to start a moving business to earn money during the summer. To determine whether this is a good idea, they need to find the answer to which of the following questions?

		Who are my customers, and where are they?
		Who are my competitors, and where are they?
		How can I differentiate my product from that of my competitors?
		In what quantities and at what price will my customers buy my service?
		All of these.

2 points

QUESTION 17

The classical management perspective consists of

		scientific management and administrative management.
		management science and scientific management.
		behavioral management and the operations management.
		contemporary management and behavioral management.
		contingency management and universal management.

2 points

QUESTION 18

Which of the following persons is a manager?

		Cardinal Timothy Dolan, Archbishop of New York
		Nick Saban, football coach at the University of Alabama
		Linda Kaplan Thaler, chief creative officer of Kaplan Thaler Group
		Marissa Mayer, CEO of Yahoo
		All of these.

2 points

QUESTION 19

Organizations that provide resources to other organizations are known as

suppliers.

competitors.

regulators.

interest groups.

importers.

2 points

QUESTION 20

A(n) ____ strategy requires little initial investment, is heavily regulated, and provides little opportunity to modify products for local conditions.

importing/exporting

licensing

joint venture

direct investment

global sourcing

2 points

QUESTION 21

All of the following are included in the task environment of organizations EXCEPT

competitors.

customers.

regulators.

suppliers.

the economy.

2 points

QUESTION 22

"Decision making under risk" means the decision maker

		has no data on which to base his or her decision.
		is risk-averse, avoiding risky investments.
		knows all the risks involved in the decision.
		can estimate decision data with some probability.
		is making an important decision with long- term consequences.

2 points

QUESTION 23

A standing plan that outlines the steps to be followed in a particular circumstance is called a(n)

SOP.

single-use plan.

policy.

contingency plan.

program.

2 points

QUESTION 24

Which of the following is NOT one of the reasons for new business failure described in your text?

Sufficient capital

Incompetence

Neglect

Weak control systems

Inexperience

2 points

QUESTION 25

Interpersonal skills enable managers

		to take an overall view of how the parts of the organization interrelate and to think strategically.
		to solve detailed problems for their subordinates.
		to understand and interact effectively with others in the organization.
		to diagnose organizational problems correctly.
		None of these.

2 points

QUESTION 26

Herbert Simon noted that managers generally fail to make rational decisions because they are limited by their own values, skills, habits, and unconscious reflexes as well as by incomplete information. What name did Simon give this phenomenon?

Satisficing

Bounded rationality

Brainstorming

Rational decision making

Decision framing

2 points

QUESTION 27

Nike and Reebok are best described as

strategic allies.

competitors.

customers.

regulators.

suppliers.

2 points

QUESTION 28

The first person to identify the managerial functions of planning, organizing, leading, and controlling was

Elton Mayo.

Lillian Gilbreth.

Henri Fayol.

Hugo Munsterberg.

Mary Parker Follett.

2 points

QUESTION 29

Strategic goals are set by

first-line managers.

middle managers.

top managers.

stockholders.

All of these.

2 points

QUESTION 30

Using the BCG matrix, SBUs are classified on the basis of

		market growth rate and cash generation potential.
		market share and market growth rate.
		competitive advantage and financial strength.
		a strategic business unit and product life cycle.
		None of these.

2 points

QUESTION 31

____ skills are needed for specialized tasks within the organization.

Human

Organizational

Conceptual

Technical

None of these.

2 points

QUESTION 32

McGraw Hill operates in publishing and construction. This is an example of ____ diversification.

differentiation

unrelated

single-product

BCG

related

2 points

QUESTION 33

The management pioneer who performed the Hawthorne studies at Western Electric was

Lillian Gilbreth.

Elton Mayo.

Henry Gantt.

Frank Gilbreth.

Frederick Taylor.

2 points

QUESTION 34

An organization's obligation to protect and enhance the society in which it operates is called

legal responsibility.

ethical responsibility.

social responsibility.

cultural responsibility.

societal responsibility.

2 points

QUESTION 35

An entrepreneur does all of the following EXCEPT

operate.

organize.

plan.

assume risk.

hire a professional manager.

2 points

QUESTION 36

The primary purpose of the management process is to

		develop organizational goals and make logical decisions.
		organize the various functions in a logical manner.
		ensure that all employees are working together effectively.
		achieve organizational goals efficiently and effectively.
		make sure things go as planned.

2 points

QUESTION 37

How do top managers spend most of their time?

		Overseeing day-to-day operations
		Routine administrative tasks
		Implementing plans of first-line managers
		Making decisions and creating goals
		Coordinating the work of first-line managers

2 points

QUESTION 38

In the classical decision making model, "optimization" means

		implementing two or more alternatives simultaneously.
		choosing the alternative with the best overall expected outcomes.
		gathering the most complete information before making the decision.
		reaching a satisfactory level of performance.
		None of these.

2 points

QUESTION 39

A written summary of the business strategy and its implementation plan is known as

a niche summary.

a first-mover advantage.

a business plan.

economies of scale.

a franchise agreement.

2 points

QUESTION 40

The aspects of a business that the firm performs at a higher level than its competitors are known as the firm's

niches.

capital-intensiveness.

distinctive competencies.

strategic weakness.

first-mover advantage.

2 points

QUESTION 41

For a Perkins restaurant, which of the following would be considered to be a supplier?

A family of 5

Wendy

browntermite908

What valuable company is nobody building? This question is harder than it looks, because your company could create a lot of value without becoming very valuable itself. Creating value isn't enough -- you also need to capture some of the value you create. This means that even very big businesses can be bad businesses. For example, U.S. airline companies serve millions of passengers and create hundreds of billions of dollars of value each year. But in 2012, when the average airfare each way was $178, the airlines made only 37 cents per passenger trip. Compare them to Google, which creates less value but captures far more. Google brought in $50 billion in 2012 (versus $160 billion for the airlines), but it kept 21% of those revenues as profits -- more than 100 times the airline industry's profit margin that year. Google makes so much money that it is now worth three times more than every U.S. airline combined. The airlines compete with each other, but Google stands alone. Economists use two simplified models to explain the difference: perfect competition and monopoly. "Perfect competition" is considered both the ideal and the default state in Economics 101. So-called perfectly competitive markets achieve equilibrium when producer supply meets consumer demand. Every firm in a competitive market is undifferentiated and sells the same homogeneous products. Since no firm has any market power, they must all sell at whatever price the market determines. If there is money to be made, new firms will enter the market, increase supply, drive prices down and thereby eliminate the profits that attracted them in the first place. If too many firms enter the market, they'll suffer losses, some will fold, and prices will rise back to sustainable levels. Under perfect competition, in the long run no company makes an economic profit. The opposite of perfect competition is monopoly. Whereas a competitive firm must sell at the market price, a monopoly owns its market, so it can set its own prices. Since it has no competition, it produces at the quantity and price combination that maximizes its profits. To an economist, every monopoly looks the same, whether it deviously eliminates rivals, secures a license from the state or innovates its way to the top. I'm not interested in illegal bullies or government favorites: By "monopoly," I mean the kind of company that is so good at what it does that no other firm can offer a close substitute. Google is a good example of a company that went from 0 to 1: It hasn't competed in search since the early 2000s, when it definitively distanced itself from Microsoft and Yahoo! Americans mythologize competition and credit it with saving us from socialist bread lines. Actually, capitalism and competition are opposites. Capitalism is premised on the accumulation of capital, but under perfect competition, all profits get competed away. The lesson for entrepreneurs is clear: If you want to create and capture lasting value, don't build an undifferentiated commodity business. How much of the world is actually monopolistic? How much is truly competitive? It is hard to say because our common conversation about these matters is so confused. To the outside observer, all businesses can seem reasonably alike, so it is easy to perceive only small differences between them. But the reality is much more binary than that. There is an enormous difference between perfect competition and monopoly, and most businesses are much closer to one extreme than we commonly realize. The confusion comes from a universal bias for describing market conditions in self-serving ways: Both monopolists and competitors are incentivized to bend the truth. Monopolists lie to protect themselves. They know that bragging about their great monopoly invites being audited, scrutinized and attacked. Since they very much want their monopoly profits to continue unmolested, they tend to do whatever they can to conceal their monopoly -- usually by exaggerating the power of their (nonexistent) competition. Think about how Google talks about its business. It certainly doesn't claim to be a monopoly. But is it one? Well, it depends: a monopoly in what? Let's say that Google is primarily a search engine. As of May 2014, it owns about 68% of the search market. (Its closest competitors, Microsoft and Yahoo!, have about 19% and 10%, respectively.) If that doesn't seem dominant enough, consider the fact that the word "google" is now an official entry in the Oxford English Dictionary -- as a verb. Don't hold your breath waiting for that to happen to Bing. But suppose we say that Google is primarily an advertising company. That changes things. The U.S. search-engine advertising market is $17 billion annually. Online advertising is $37 billion annually. The entire U.S. advertising market is $150 billion. And global advertising is a $495 billion market. So even if Google completely monopolized U.S. search-engine advertising, it would own just 3.4% of the global advertising market. From this angle, Google looks like a small player in a competitive world. What if we frame Google as a multifaceted technology company instead? This seems reasonable enough; in addition to its search engine, Google makes dozens of other software products, not to mention robotic cars, Android phones and wearable computers. But 95% of Google's revenue comes from search advertising; its other products generated just $2.35 billion in 2012 and its consumer-tech products a mere fraction of that. Since consumer tech is a $964 billion market globally, Google owns less than 0.24% of it -- a far cry from relevance, let alone monopoly. Framing itself as just another tech company allows Google to escape all sorts of unwanted attention. Non-monopolists tell the opposite lie: "We're in a league of our own." Entrepreneurs are always biased to understate the scale of competition, but that is the biggest mistake a startup can make. The fatal temptation is to describe your market extremely narrowly so that you dominate it by definition. Suppose you want to start a restaurant in Palo Alto that serves British food. "No one else is doing it," you might reason. "We'll own the entire market." But that is only true if the relevant market is the market for British food specifically. What if the actual market is the Palo Alto restaurant market in general? And what if all the restaurants in nearby towns are part of the relevant market as well? These are hard questions, but the bigger problem is that you have an incentive not to ask them at all. When you hear that most new restaurants fail within one or two years, your instinct will be to come up with a story about how yours is different. You'll spend time trying to convince people that you are exceptional instead of seriously considering whether that is true. It would be better to pause and consider whether there are people in Palo Alto who would rather eat British food above all else. They may well not exist. In 2001, my co-workers at PayPal and I would often get lunch on Castro Street in Mountain View, Calif. We had our pick of restaurants, starting with obvious categories like Indian, sushi and burgers. There were more options once we settled on a type: North Indian or South Indian, cheaper or fancier, and so on. In contrast to the competitive local restaurant market, PayPal was then the only email-based payments company in the world. We employed fewer people than the restaurants on Castro Street did, but our business was much more valuable than all those restaurants combined. Starting a new South Indian restaurant is a really hard way to make money. If you lose sight of competitive reality and focus on trivial differentiating factors -- maybe you think your naan is superior because of your great-grandmother's recipe -- your business is unlikely to survive. The problem with a competitive business goes beyond lack of profits. Imagine you're running one of those restaurants in Mountain View. You're not that different from dozens of your competitors, so you've got to fight hard to survive. If you offer affordable food with low margins, you can probably pay employees only minimum wage. And you'll need to squeeze out every efficiency: That is why small restaurants put Grandma to work at the register and make the kids wash dishes in the back. A monopoly like Google is different. Since it doesn't have to worry about competing with anyone, it has wider latitude to care about its workers, its products and its impact on the wider world. Google's motto -- "Don't be evil" -- is in part a branding ploy, but it is also characteristic of a kind of business that is successful enough to take ethics seriously without jeopardizing its own existence. In business, money is either an important thing or it is everything. Monopolists can afford to think about things other than making money; non-monopolists can't. In perfect competition, a business is so focused on today's margins that it can't possibly plan for a long-term future. Only one thing can allow a business to transcend the daily brute struggle for survival: monopoly profits. So a monopoly is good for everyone on the inside, but what about everyone on the outside? Do outsize profits come at the expense of the rest of society? Actually, yes: Profits come out of customers' wallets, and monopolies deserve their bad reputation -- but only in a world where nothing changes. In a static world, a monopolist is just a rent collector. If you corner the market for something, you can jack up the price; others will have no choice but to buy from you. Think of the famous board game: Deeds are shuffled around from player to player, but the board never changes. There is no way to win by inventing a better kind of real-estate development. The relative values of the properties are fixed for all time, so all you can do is try to buy them up. But the world we live in is dynamic: We can invent new and better things. Creative monopolists give customers more choices by adding entirely new categories of abundance to the world. Creative monopolies aren't just good for the rest of society; they're powerful engines for making it better. Even the government knows this: That is why one of its departments works hard to create monopolies (by granting patents to new inventions) even though another part hunts them down (by prosecuting antitrust cases). It is possible to question whether anyone should really be awarded a monopoly simply for having been the first to think of something like a mobile software design. But something like Apple's monopoly profits from designing, producing and marketing the iPhone were clearly the reward for creating greater abundance, not artificial scarcity: Customers were happy to finally have the choice of paying high prices to get a smartphone that actually works. The dynamism of new monopolies itself explains why old monopolies don't strangle innovation. With Apple's iOS at the forefront, the rise of mobile computing has dramatically reduced Microsoft's decadeslong operating system dominance. Before that, IBM's hardware monopoly of the 1960s and '70s was overtaken by Microsoft's software monopoly. AT&T had a monopoly on telephone service for most of the 20th century, but now anyone can get a cheap cellphone plan from any number of providers. If the tendency of monopoly businesses was to hold back progress, they would be dangerous, and we'd be right to oppose them. But the history of progress is a history of better monopoly businesses replacing incumbents. Monopolies drive progress because the promise of years or even decades of monopoly profits provides a powerful incentive to innovate. Then monopolies can keep innovating because profits enable them to make the long-term plans and finance the ambitious research projects that firms locked in competition can't dream of. So why are economists obsessed with competition as an ideal state? It is a relic of history. Economists copied their mathematics from the work of 19th-century physicists: They see individuals and businesses as interchangeable atoms, not as unique creators. Their theories describe an equilibrium state of perfect competition because that is what's easy to model, not because it represents the best of business. But the long-run equilibrium predicted by 19th-century physics was a state in which all energy is evenly distributed and everything comes to rest -- also known as the heat death of the universe. Whatever your views on thermodynamics, it is a powerful metaphor. In business, equilibrium means stasis, and stasis means death. If your industry is in a competitive equilibrium, the death of your business won't matter to the world; some other undifferentiated competitor will always be ready to take your place. Perfect equilibrium may describe the void that is most of the universe. It may even characterize many businesses. But every new creation takes place far from equilibrium. In the real world outside economic theory, every business is successful exactly to the extent that it does something others cannot. Monopoly is therefore not a pathology or an exception. Monopoly is the condition of every successful business. Tolstoy famously opens "Anna Karenina" by observing: "All happy families are alike; each unhappy family is unhappy in its own way." Business is the opposite. All happy companies are different: Each one earns a monopoly by solving a unique problem. All failed companies are the same: They failed to escape competition.

According to the article above by Peter Thiel do you think perfect competition is best for the economy and for consumers? Why or why not? What does Peter Thiel think about perfect competition versus monopolies?

I have a essay written up already, the problem is that I submitted it and received a 62% return from turnitin, which is totally unacceptable. It must be below 20%. Is it possible for you to look over it, make any corrections or suggestions to re-submit it. The majority of the repetitiveness was from my intro paragraph and the definitions I used in the essay. Sent at 04:42 AM The essay is attach. I will need this by this evening if that's possible. thanks

Identify the type of corporate restricting that fits with common theories of what are assumed to be causes of mergers and acquisitions.

Corporate reconstructing is more often defined as re-designing organizationâs practice and structure; so to remain competitive and sustainable in the market (s). There may be several reasons for corporate restructuring. These includes, but not limited to, re-positioning in the market, discovery of a new market or becoming more profitable and/or economical. The corporate restructuring is generally classified into or two different categories: operational reconstructing and financial reconstructing. This entails changes in the alignment of firmâs asset structure by acquiring new business outright, by partial sale, by a spin-off of companies or via product lines. This can also include downsizing through closure of non-profitable units. Financial reconstructing deals with the changes in the capital structure of the firm. Share repurchase or adding debt in capital structure; just to name. Financial limiting hardly deals with mergers and acquisitions, hence we will discuss the cause of mergers and acquisitioning and how it is related to that the operational restructuring only.

Omit the chart in the question!

There are several types of Restructuring are given below:

A merger is a combination of two or more firms who combine all operations, officers, structure and other functions of business to form a new entity. Desired effect being not just the accumulation of assets and liabilities of the distinct entities, but also to achieve several other benefits such as: economics of scale, acquisition of new technologies and having access to new markets. Additionally, the merger allows for one company giving shareholders in the other stock in exchange for surrounding the stock of the first company. And it allow for the entities to retain its original identity.

Mergers can be classified into the following categories:

Horizontal Mergers

Two merged units were doing the same business i.e. TMobile and Sprint they were competitors with one another in the market. The basic motive in this type of merger is to consolidate in the market so as to gain advantage in negotiating with customers as well as having better position with respect to other competitors.

Vertical Mergers

This type of mergers is conducted between customer and suppliers of a value chain process and main motive in this type of merger is gain maximum efficiency in supply chain and minimization of transaction cost.

Congener Mergers

In this type of mergers, the two firms will be sharing similar kind of industry structure at least in one form of their operation and therefore try to combine operation in that one form and get efficiency benefit in supply chain and other operations.

Conglomerate

A conglomerate merger is a merger between two firms having unrelated business. The motive behind a conglomerate is a.) Better utilization of financial resources b.) Increase in debt capacity, c.) Increase in the share price by increased EPS with decreased cost capital d) Cross selling and e.) Synergy

Cash-out merger

In this type of merger the share of one unit involved in merger donât want to retain their share in the merged unit and therefore are compensated with cash in place of the share.

Acquisitions or take-over has said to have happened when the acquirer company buys out majority of the shares of the acquired company and the ownership of the assets and liabilities of the acquired company get transferred to the acquirer company. The process of acquisition or take-over may be conducted in both friendly and hostile manner depending upon the specific strategy of the acquirer.

Friendly takeover

In a friendly takeover, the targetâs board and management recommend shareholdersâ approval. To gain control, the acquiring company usually will offer a premium to the current stock price. The excess of the price over the targetâs premerger share price is called a purchase premium and can vary widely by country, which reflects the perceived value of obtaining a controlling interest in the target, the value of expected synergies resulting from combining the two entities and any overpayment of the target firm. Acquirers often prefer friendly takeovers because the post-merger integrations process in usually more expeditious when both parties are cooperating fully and customer, employee attrition is less.

Hostile takeover

A Hostile takeover occurs when the offer is unsolicited, the approach was contested by the targetâs management and control changed hands. The acquirer prefers hostile mode rove the friendly mode only when it becomes possible to acquire the shares in a friendly mode. The acquirer may attempt to circumvent management by offering to buy shares directly from the targets from the targetâs shareholders and buy shares in a public stock exchange. A hostile takeover can be accomplished through either a tender offer or a proxy fight.

The Pros to a merge and an acquisition is that both types of transactions include the potential increase in the competitiveness, cost-efficiency and stock value of the new enterprise. And with everything pro there has to be Cons. One disadvantage of these transactions; it could be very expensive. A significant amount of capital typically must be raided before entering negotiations. Another mergers drawback is that there is now a new owner, co-owners, in which they must now collaborate.

In conclusion any entity or entities that have chosen to merge or entering an acquisition should consider prior to move. Identify the goals of acquisition clearly, if the move is a good fit and what conditions must be met for the pursing the merge or the acquisition. An in-depth due diligence must occur; the financial records must be thoroughly examined, is the marketplace a profitable absolute, as well as the senior executives should also be conducted. There could be potential for disaster if all areas are not explored. Negotiation process is should have clear written rules and guidelines before following through with the merger or acquisition. Assembling an acquisition team can be very valuable to the success of the new owners. The team will be able to define the responsibilities of each company; considering all parties are in agreement with the new implementations such as computer systems, new HR policies and so forth. Lastly, be flexible and ready for unexpected surprises and have a supplemental plan in case of potential disasters.

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ADMS 4900 Lecture Notes - Lecture 5: Market Power, Call Option, Cash Flow

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Related Questions

		economies of scale.
		venture capitalism.
		a franchising agreement.
		first-mover advantage.
		None of these.

		resource deployment.
		scope.
		competitive advantage.
		synergy.
		None of these.

		satisficing.
		problem solving.
		bounded rationality.
		decision making.
		None of these.

		differentiation strategy.
		low-cost strategy.
		diversification strategy.
		related diversification strategy.
		BCG strategy.

		group politics.
		a void of expert opinion.
		an increase in programmed costs.
		faster decision making.
		too much brainstorming.

		groupthink may occur.
		better decisions generally emerge.
		enhanced communication may result.
		more information and knowledge are available.
		None of these.

		importing/exporting
		licensing
		joint venture
		direct investment
		global sourcing

		Sufficient capital
		Incompetence
		Neglect
		Weak control systems
		Inexperience

		Satisficing
		Bounded rationality
		Brainstorming
		Rational decision making
		Decision framing

		strategic allies.
		competitors.
		customers.
		regulators.
		suppliers.

		Mission
		Purpose
		Strategic plan
		Strategic goal
		Tactical goal

		efficient
		controllable
		profitable
		effective
		valid

		Rational
		Emotional
		Classical
		Behavioral
		Sequential

		transportation
		manufacturing
		retailing
		services
		wholesaling

		Elton Mayo.
		Lillian Gilbreth.
		Henri Fayol.
		Hugo Munsterberg.
		Mary Parker Follett.

		first-line managers.
		middle managers.
		top managers.
		stockholders.
		All of these.

		Lillian Gilbreth.
		Elton Mayo.
		Henry Gantt.
		Frank Gilbreth.
		Frederick Taylor.

		legal responsibility.
		ethical responsibility.
		social responsibility.
		cultural responsibility.
		societal responsibility.

		operate.
		organize.
		plan.
		assume risk.
		hire a professional manager.

		a niche summary.
		a first-mover advantage.
		a business plan.
		economies of scale.
		a franchise agreement.

		niches.
		capital-intensiveness.
		distinctive competencies.
		strategic weakness.
		first-mover advantage.