Operations Strategy in a Global Environment MGT 475

Operations Strategy in a Global Environment MGT 475. 01 &. 02 Fall 2008

On-Line Assignment for 8/29/08 • Read Chapter 2 in the text. • Run this Power. Point slide show. • Complete the quiz on the last slides and turn in your Scantron Quizstrip 815 -E at the beginning of class on 9/3/08. • Do problem 2. 6 on page 48 of the text (for practice—not to be turned in). MGT 475. 01 &. 02 Fall 2008

Reasons to Globalize The text lists 6 reasons to globalize in Figure 2. 1. They all are focused on becoming more effective and efficient in serving customers. MGT 475. 01 &. 02 Fall 2008

Cultural Issues for Globalization • Country Risk Assessment (would you want to locate a business in Iraq this year? ) • Currency Conversion Risk (will the dollar strengthen or weaken? At what value will I be able to bring profits from overseas operations back to the U. S. ? ) • Political Risk Assessment (how likely is it that the current government policies will continue into the future? ) MGT 475. 01 &. 02 Fall 2008

Cultural Issues Continued • How well will my current managerial policies work in another culture? • Language issues. • Possible differences in cultural values. • What is legal (and often expected) in the host country may not be legal at home (e. g. bribes). MGT 475. 01 &. 02 Fall 2008

Developing Mission and Strategies Mission – The purpose or rational for an organization’s existence. Enables an organization to focus on a common purpose. Strategy – How an organization expects to achieve its mission and goals. An action plan designed to achieve the mission. MGT 475. 01 &. 02 Fall 2008

Developing Mission and Strategies The organizational mission should be developed with participation throughout the organization. As Figure 2. 4 shows, Functional Area and Departmental missions must be consistent with the Organization mission. Organization Mission Functional Area Mission MGT 475. 01 &. 02 Fall 2008 Departmental Mission

Strategy Development and Implementation: SWOT Analysis Strengths Weaknesses Opportunities Threats Internal External MGT 475. 01 &. 02 Fall 2008

CSF and Activity Maps Identify Critical Success Factors (CSF) which are key to achieving competitive advantage. Use Activity Maps to link competitive advantage, CSFs, and supporting activities (Figure 2. 8). MGT 475. 01 &. 02 Fall 2008

Operations Strategy Table 2. 1 lists 10 strategic operations decision areas. MGT 475. 01 &. 02 Fall 2008

Homework Assignment For practice—not to be turned in: Do Problem 2. 6 on p. 48 of the hardbound edition of the text. MGT 475. 01 &. 02 Fall 2008

Quiz Answer the questions on the next slides. Select the BEST answer. Record your answers on a Scantron Quizstrip Form 815 -E. You must turn in your Quizstrip at the beginning of class on 9/3/08. MGT 475. 01 &. 02 Fall 2008

Quiz 1. Which of the following did the authors not suggest as a reason for globalizing operations: a. reduce costs d. attract new markets b. improve the supply chain e. all of the above were suggested c. stockholder approval ratings 2. The term maquiladora is most synonymous with: a. free trade zone d. areas that do not meet US safety b. Chinese forced labor camps standards c. home-based industry e. none of the above 3. Critical Success Factors are those relatively few activities that make a difference between having and not having a competitive advantage. a. True b. False MGT 475. 01 &. 02 Fall 2008

Quiz 4. Which of the following is true about business strategies? a. An org. should stick with its strategy for the life of the business. b. All firms within an industry will adopt the same strategy. c. Well defined missions make strategy development much easier. d. Strategies are formulated independently of SWOT analysis. e. Organizational strategies depend on operations strategies. 5. The acronym MNC stands for: a. Mexican National Committee for trade b. Maquiladora Negates Competition c. Maytag-Nestle Corporation d. Multinational Corporation e. none of the above. MGT 475. 01 &. 02 Fall 2008

Quiz 6. It is safe to assume that the management style that works in one culture will be equally effective in another culture. a. True b. False 7. The risk that a new government might nationalize the assets of foreign owned firms with operations in their country is assessed in: a. country risk assessment b. CSF analysis c. political risk assessment d. overseas business plan e. currency risk assessment 8. Departmental missions may differ significantly from the overall organization’s mission. a. True b. False MGT 475. 01 &. 02 Fall 2008

Quiz 9. ___________ are the set of actions designed to enable the organization to achieve its mission. a. Goals d. CSFs b. Tactics e. Strategies c. Action plans 10. The organization’s mission should normally be developed at the top levels of the organization without input from lower levels. a. True b. False MGT 475. 01 &. 02 Fall 2008