EXAM 2 Flashcards
(150 cards)
1
Q
Planning
A
Setting goals and deciding how to achieve them (action plan)
Dealing with uncertainty by formulating future courses of actions to achieve specified results.
2
Q
Business plan
A
A written document that defines the firm’s objectives, strategy, and measures of success. Includes the business model.
Should determine the structure of a company. EX) an agile start-up should choose a flexible structure.
3
Q
Business model
A
Describes the firm’s position, operations, competitive advantage, marketing strategy, method of financing, and expected revenues and expenses.
4
Q
Strategy
A
The large scale action plan that sets the direction for an organization.
It is a “best guess” at how to achieve long-term prosperity.
5
Q
Strategic management
A
The use of managers from all parts of the organization to formulate and implement strategies and strategic goals.
6
Q
Cost of planning
A
Is time consuming
7
Q
Benefits of planning
A
Provides direction and momentum. (without a plan, managers focus too much on the present and forget to predict future opportunities)
Planning encourages innovation and creativity
Planning develops and maintains a competitive advantage
8
Q
What makes a plan fail
A
Information overload
Bad group dynamics
Faulty assumptions about the future
Poor judgement about the organization’s capacity
Having a detailed plan, but no strategy
9
Q
Mission statement
A
Expresses the organization’s reason for operating.
Is written by the BOD and top management.
Outlines the goods and services and org. will provide and its reason for providing them.
Answers the question: why do you operate?
10
Q
Vision statement
A
Expresses what the organization envisions itself becoming.
States what an org. wishes to become and the actions needed to get there.
Answers the question: what is your future goal?
11
Q
3 types of planning:
A
Strategic, Tactical, Operational
12
Q
Strategic planning
A
Done by top managers.
Determine what the org.’s long-term goals are and the overall direction of the organization.
Top managers must be future oriented, understand the market environment, and be comfortable with uncertainty and competition.
Most firms don’t strategically plan until they encounter a crisis.
13
Q
Tactical planning
A
Done by middle managers or product-line managers.
Determine what contributions their departments can make with their given resources.
Managers must implement strategic plans and supervise operational managers. They must often make decisions without a detailed procedure developed by top management.
14
Q
Operational planning
A
Done by first-line managers or team leaders.
Determine how to accomplish specific tasks with their given resources.
These managers must supervise the daily tasks of non-managerial employees. Decisions at this level are routine and well-defined by middle managers.
15
Q
Goals (objectives)
A
Specific commitments to achieve a measurable result within a stated period of time.
16
Q
Means-end chain
A
Describes the hierarchy of organizational goals (operational, tactical, strategic) - the means are the lower end goals and the ends are the higher level goals.
17
Q
3 types of goals:
A
Strategic, tactical, operational
18
Q
Strategic goals
A
Set by and for top management.
Focuses on objectives for the org. as a whole.
19
Q
Tactical goals
A
Set by and for middle managers.
Focuses on the actions needed to achieve strategic goals.
20
Q
Operational goals
A
Set by and for first-line managers.
Are concerned with short-term matters associated with realizing tactical goals.
21
Q
Action plan
A
Defines the course of action needed to achieve a stated goal. Is the basis for an operating plan.
22
Q
Operating plan
A
Defines how a business will be conducted and identifies clear targets such as revenue, cash flow, and market share.
23
Q
Standing plans
A
Plans developed for activities that occur repeatedly over a period of time.
Rules, procedures, policies
24
Q
Rule
A
A standing plan that states a specific required action, with no room for interpretation.
25
Procedure
A standing plan that outlines the response to a particular problem or situation.
26
Policy
A standing plan that outlines the general response to a designated problem or situation.
27
Single use plans
Plans developed for activities that are not likely to be repeated in the future.
Projects and programs
28
Project
A single-use plan that includes a smaller range of tasks or activities than a program.
29
Program
A single-use plan that includes a range of projects or activities.
30
Deadlines
Are a strong motivator that help people prioritize tasks and provide feedback about finished work.
31
Planning/control cycle
Is a continuous feedback loop for each level of planning. Includes 2 planning & 2 controlling steps:
1: Make the plan
2: Carry it out
1: Control the direction (compare results with plan)
2: Control the direction (take corrective action) - either correct deviations or edit/revise the current plan
32
Who is the leading expert on competitive strategy?
Michael Porter (from Harvard)
33
Strategic positioning
Attempts to achieve sustainable competitive advantage by preserving what is distinct about a company.
34
3 principles of strategic positioning
Create a unique and valuable position
Use competitive tradeoffs (by pursuing one strategy, you implicitly choose not to pursue another)
Create a "fit" among activities (your strategies should align with an organization's activities)
35
3 sources of strategic positiong
Serving the FEW needs of MANY customers
Serving the BROAD needs of a FEW customers
Serving the BROAD needs of MANY customers
36
Difference between small and large firms
Small firms focus on personal connections and customer loyalty.
Large firms focus on making customers "captive" by selling them a device and then selling them content (ex: amazon sells kindles and books)
37
5 steps of strategic management process:
(DADIM)
Determine a mission and vision
Assess the current reality
Develop the grand strategy
Implement the grand strategy
Maintain strategic control
38
Characteristics of an effective mission statement:
Identifies:
```
Customers
Major products and services
Geographical areas it serves
Technology used by the org.
Commitment to economic objectives
Basic beliefs, aspirations, and values
Public responsibility
Attitude towards employees
```
39
Characteristics of an effective vision statement:
```
Is appropriate for the org. and time
Sets high standards and ideals
Clarifies direction and purpose
Encourages commitment
Inspires enthusiasm
Easily understood
Reflect uniqueness and comptencies
Is ambitious
```
40
Current reality assessment (organizational assessment)
Evaluate the firm at its present state and identify how it could be improved to achieve the organization's mission
Forecasting & benchmarking
41
Grand strategy
Identifies how the org. will accomplish the mission
42
Strategy formulation
The process of choosing the best strategy or altering several strategies to fit the organization's needs.
Is very time consuming
Conducted using Porter's 5 forces and strategies
43
Strategy implementation
W/out good implementation, the strategy is ineffective.
Must eliminate roadblocks, such as organizational culture and employee resistance.
44
Strategic control
Monitor the execution of the strategy and make adjustments if necessary.
Use a feedback look to continuously reformulate plans, rethink policies, and take corrective action
45
Environmental scanning
Carefully monitoring an organization's internal and external environments to detect opportunities and threats
One technique: SWOT analysis (situational analysis)
46
Forecast
A vision or projection of the future
2 types:
Trend analysis
Contingency planning
47
Trend analysis
Is a hypothetical extension of a past series of events into the future
EX) using historical sales data to project future sales
*if the historical data is wrong, the prediction will also be wrong
48
Contingency planning (scenario planning)
Is the creation of alternative hypothetical, but equally likely, future conditions (ex: economic conditions, budget levels, etc.)
49
Benchmarking
Comparing the firm's performance with that of other successful orgs in the industry.
50
Porter's 5 forces model
Threat of new entry
Supplier's bargaining power (the more concentrated the industry, the greater the bargaining power of suppliers)
Buyer's bargaining power (the more substitutes a good has, the greater the bargaining power of buyers)
Threat of substitutes (the internet has increased this threat)
Competitive rivalry
51
3 types of grand strategies
Growth strategy
Stability strategy
Defensive strategy
52
Stability strategy
Focuses on making little to no changes in the business
Used when an org. can't handle rapid growth or needs a period of stability in order to quality control its growth.
How to implement:
- Use a no-change strategy
- Use a little-change strategy
53
Defensive strategy (retrenchment strategy)
Focuses on reducing the organization's efforts. Often used to try to "save" a business."
How to implement:
- Reduce costs (ex: halt hiring)
- Liquidate assets
- End certain production
- Sell of entire departments or subsidiaries
- Declare bankruptcy
54
Growth strategy
Focuses on expanding a certain aspect of the business.
EX: number of employees, number of customers, market share, etc.
How to implement:
- Improve products
- Introduce new products
- Increase marketing
- Expand vertically (get new distributors/manufacturers)
- Expand horizontally (get new retailers)
- Merge w/ another company
55
Porter's 4 competitive strategies:
Cost-leadership
Differentiation
Cost-focus
Focused-differentiation
56
Cost-leadership strategy
Targets a wide market.
Aims to have the lowest price of competitors by reducing internal costs.
Focus on research, development, and cost-efficient marketing.
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Differentiation strategy
Targets a wide market.
Aims to offer a product that is unique and superior to those of competitors.
Focus on research, development, customer service, and marketing.
**may create brands to differentiate their products.
58
Cost-focus strategy
Targets a narrow market.
Aims to have the lowest price of competitors by reducing internal costs.
Usually sell these low-end products in discount stores.
59
Focused-differentiation
Targets a narrow market.
Aims to offer a product that is unique and superior to those of competitors.
Usually used for luxury or niche goods.
60
Single-product strategy
When a company makes and sells only 1 product within its market.
Benefits: can focus on one product, scout competition, upgrade production, and eliminate defects
Downfall: competition or a twist of fate can ruin the entire business
61
Diversification strategy
When a company operates several businesses to spread out the risk.
Benefits:
- An org. can spread out its admin costs and avoid duplication of costs.
- An org. can achieve synergy (when the value of these businesses is greater together than they would be apart)
Unrelated diversification: when an org. operates several unrelated businesses under 1 ownership
Related diversification: when an org. operates several related businesses under 1 ownership
62
BCG Matrix
Used to evaluate businesses based on their market growth rate and market share.
Stars
Cash cows
Question marks
Dogs
63
Stars
High market growth and high market share
64
Cash cows
Low market growth but high market share
**finance stars and question marks
65
Question marks
High market growth but low market share
**usually new ventures
66
Dog
Low market growth and low market share
**should be sold or gotten rid of
67
How to properly execute a strategy:
Use questions, analysis, and follow-through to align people with goals and achieve promised results.
**managers should take a hands-on role in this process and immerse themselves in the details of the business
68
3 core processes of execution:
```
People (focus on jobs ppl can do in the future)
Strategy
Operations (should provide a path that describes short-term objectives of each activity)
```
69
7 habits of good managers:
```
Personally engage with people and the business.
Be realistic.
Focus on clear priorities.
Emphasize accountability and follow-up.
Reward top performers.
Provide good feedback.
Be authentic, self-aware, and humble.
```
70
2 types of decision making models:
System 1: is automatic and intuitive
| System 2: is deliberate and analytical
71
The curse of knowledge
The phenomenon that people with greater knowledge and expertise often find it difficult to see things from a less-informed person's point of view.
EX) an engineer developing a phone that has complex functions that customers don't understand
72
Rational decision making model (classical model)
Describes how managers SHOULD make decisions, not how they ACTUALLY make decisions.
Assumes that managers will make the most favorable and logical decisions.
Is prescriptive, not descriptive.
73
4 steps to rational decision making:
- Identify the problem or opportunity (requires a diagnosis, which is analyzing the underlying causes)
- Generate alternatives (creative solutions)
- Evaluate alternatives & pick one (look at cost, quality, ethicality, feasibility, and effectiveness)
- Implement the solution and evaluate it
* Managers must carefully plan
* Employees can be resistant
* If unexpected errors occur, you can wit them out, adjust the plan, or start over
74
Faulty assumptions of rational decision making:
Managers have complete information
Managers can separate emotions from analysis
Managers can make the best decisions for the org. (they often have competing loyalties)
75
Non-rational decision making model:
Explains how managers ACTUALLY make decisions.
Assumes that decision making is uncertain and risky.
Is descriptive, not prescriptive.
76
2 types of non-rational decision making models:
Satisficing model: managers seek alternatives until they find one that is satisfactory, not necessarily optimal
*Herbert Simon*
Intuition model: managers use intuition (a choice without the use of conscious thought or logical inference) to make quick decisions with limited resources
* *Types of intuition:
- Holistic hunches - based on expertise
- Automated experience - based on feelings
77
Bounded rationality
The ability of decision makers to be rational is limited by numerous constraints:
- info overload
- complexity
- time
- money
78
Decision-making style
How an individual perceives and responds to information
79
Value orientation
Refers to whether a person focuses on either people and social concerns or tasks and technical concerns when faced with decision making
80
4 decision-making styles:
Low tolerance for ambiguity:
Directive style:
Efficient, practical, systematic, logical, action-oriented, and decisive (focus on facts about the short run and exercises power and control)
Behavioral style:
Is people-oriented, avoids conflict, shows concern for others, likes suggestions, but is wishy-washy.
High tolerance for ambiguity:
Analytical style:
Considers a lot of info and alternatives. Takes more time. Responds well to new situations.
Conceptual style:
Uses a broad perspective, looks at many options, focuses on the long term. Takes risks, is creative, uses intuition, but is indecisive.
81
4 ineffective reactions to decision making:
Relaxed avoidance (takes no action because they believe there will be no neg. consequences)
Relaxed change (opts for the 1st available alternative that involves low risk)
Defensive avoidance (when you can't find a good solution so they put it off and deny responsibility)
Panic (when you can't deal with a problem sensibly)
82
Deciding to decide
When a manager decides they MUST take some course of action
83
Decision making biases (based on Heuristics, which are strategies that simplify decision making)
Availability bias - using info that is readily available from memory to make judgements
Representative bias - the tendency to generalize from a small sample or single event
Confirmation bias - when a person seeks info that supports his/her point of view and discounts other data
Sunk cost bias - when managers see all the money they've already put into a project and say it's too costly to simply abandon it
Anchoring adjustment bias - the tendency to make decisions based on an initial figure
Overconfidence bias - when people have more subjective confidence in their decision making than their objective accuracy
Hindsight bias - when people view past events as more predictable than they really were
Framing bias - when people are influenced by the way a problem is presented
Escalation of commitment bias - when a person increases their commitment to a project, despite negative info
84
Prospect theory
People dislike taking losses more than they dislike losing potential gains
This is the reason why ppl enter the lottery
85
Organizational/corporate culture
A system of shared beliefs and values that develops within an organization and guides the behavior of its members.
Can provide organizational identity and competitive advantage.
86
Organizational structure
A system of task and reporting relationships that coordinate and motivate an organization's members so they can work together the achieve goals
87
Person-org fit
The extent that corporate culture fits with your own personality
A good fit is important for high levels of performance
88
4 kinds of organizational culture
Clan culture
- Has an internal focus
- Values flexibility, cohesion, job satisfaction, collaboration, employee development, and commitment
- Fosters happier/more committed employees
Adhocracy culture
- Has an external focus
- Values flexibility, adaptivity, creativity
- Usually present in innovative/start-up companies
Market culture
- Has a strong external focus
- Values stability, control, profit, productivity, results
- Doesn't value job satisfaction and employee dev.
- Employees who work hard are rewarded
- Usually produces the best results
Hierarchy culture
- Has an internal focus
- Values stability, control, efficiency, effectiveness
89
3 layers of organizational culture:
Observable artifacts
- Include physical manifestations of culture
- How employees dress, how managers act, how the office is decorated
Espoused values
- The explicitly stated norms and values PREFERRED by the org.
- Enacted values are the values and norms ACTUALLY exhibited by the org.
Basic assumptions
-Unobservable core values that are taken for granted and hard to change
90
How culture is transmitted to employees
Symbols: objects, acts, qualities, or events that convey meaning
Stories: narratives based on true events to emphasize a particular view
Hero: a person who embodies the values of an org.
Rites & rituals: the activities and ceremonies that celebrate important occasions in the org.
91
Organization
A system of consciously coordinated activities or forces of 2 or more people
92
3 types of organizations:
For-profit
-formed to make money
Nonprofit
-formed to offer services to certain clients
Mutual-benefit
-voluntary collectives used to advance the members' interests
93
Organizational chart
A box-and-lines illustration that shows the formal lines of authority and the organization's official positions or work specializations
Vertical hierarchy of authority
-By looking up and down the chart, you can see the chain of command and official communication network
Horizontal specialization
-By looking left to right on the chart, you can see the different jobs and work specializations
94
Edgar Schein's 4 common elements of an org.
A common purpose - unifies employees
Coordinated effort
Division of labor - discrete tasks for specialists
A hierarchy of authority - multiple-tiered hierarchy is best
**unity of command: employees should only have to report to 1 manager to avoid conflicting priorities
95
Other common elements of an org.
Span of control - the # of ppl reporting to a manager
* *Tall orgs have many levels with narrow spans of control
* *Wide orgs have few levels with wide spans of control (becoming more popular)
Authority - the rights inherent to a management position
* *Accountability - employees are obligated to report to their superiors
* *Responsibility - employees are obligated to complete assigned tasks
* *Delegation
Centralization of authority
* *centralized authority - high level managers make the decisions and prevents duplication of efforts
* *decentralized authority - decisions are made by middle/supervisory level managers and is more efficient
96
Line vs Staff positions
Line managers - have the authority to make decisions and usually ppl report to them (solid vertical line)
Staff personnel - provide advice, recommendations, and research to line managers (dotted horizontal line)
97
Organizational design (3 types)
Traditional designs (vertical management hierarchy)
Horizontal designs
Designs that open boundaries between orgs
98
4 types of traditional organizational designs
Simple structure
- Centralized authority, flat hierarchy, few rules, low work specialization
- Used in small mom-and-pop firms
Functional structure
-People with similar specialties are put in formal groups (such as departments with individual VPs)
Divisional structure
- People with diverse specialties are put in formal groups based on similar products, regions, customers, etc.
* *product divisions
* *customer divisions
* *geographic divisions
Matrix structure
- Combines functional and divisional chains of command (both vertical and horizontal)
* *employees report to 2 bosses (functional and project manager)
* *violates concept of "unity of command"
99
Horizontal organizational design
Is a team-based design used to break down internal boundaries and improve collaboration
EX: cross-functional teams
100
Organizational designs that open boundaries between orgs
Boundaryless orgs are fluid, highly adaptive, and linked by information technology
They come together to collaborate on common tasks
Have become more common with increasing technology
```
Hollow structure (network structure):
-Uses information technology to link a central core to independent outside firms by computer connections
```
Modular structure:
-A firm which assembles product chunks provided bu outside contractors
Virtual structure:
-When firms create a "company outside a company" to respond to an attractive (temporary) market by creating a virtual organization
101
Link between strategy, culture, and structure
Organizational culture and structure should be based on the strategy the org. hopes to implement.
Culture and structure should evolve as strategy evolves
102
Human resource management
Planning, attracting, developing, and retaining an effective workforce
An org's people are its most important resource
103
Strategic human resources management process
```
Determine the mission and vision
Determine the grand strategy
Come up with a strategic plan
Determine what HRs are needed
Recruit and select people
Engage in orientation, training, and development
Appraise employee performance
```
104
Human capital
the economic or productive potential of an employee
105
Knowledge workers
Their work involves generating or interpreting info, not manual labor
106
Social capital
The economic or productive potential of strong and trusting relationships
107
How to understand current employee needs
Job analysis - determines the basic elements of a job by observing and analyzing the job
Job description - summarizes what a job entails
Job specification - describes the qualifications needed to have a specific job
108
Human resource inventory
Used to identify employees for promotion from within
Lists employees in order based on name, education, training, languages, etc.
109
Recruitment of employees
The process of locating and attracting employees
Internal recruiting:
- recruiting ppl who already work in an org. by putting up job postings (put on bulletin boards, newsletters, and the intranet)
* *Is cheap, guarantees a familiar employee, and shows that hard work is rewarded
* *It limits the pool of candidates, employees believe seniority guarantees them a promotion, and it does not remove the vacancy
External recruiting:
- attracting applicants from outside the org
- can advertise in newspapers, employment agencies, job-placement offices, and word of mouth
* *brings fresh ideas into the org.
* *is more expensive, time consuming, and risky
It's important to give a realistic job preview to potential candidates so they don't end up quitting
110
Selection process
Screening job applicants to hire the best candidate
Background information
-looking at the application and resume of a candidate
Interviewing
- unstructured interview: asking probing questions to find out about the candidates personality
- structured interview: sticking to a script of questions
- situational interview: the interviewer uses hypothetical situations to test the candidate's abilities
- behavioral-description interview: explores what an applicant has actually done in the past
Employment tests
- includes all procedures used in the selection process
- ability tests: test the physical, mental, and clerical abilities of an applicant
- performance tests: assess the applicant's performance on an actual given task
- personality tests
- integrity tests
All tests should be both reliable and valid.
111
Types of compensations and benefits:
Wages and salaries
Incentives (bonuses, stock options, commissions)
Benefits (non-monetary forms of compensation: holidays, health insurance, retirement plans, etc)
112
Onboarding
Doing everything possible to make a new employee feel welcome
113
Orientation
The process of helping a newcomer fit smoothly into a job and organization
By the end, employees should know:
- Their job routine
- The mission and operations of their job
- The work rules and employee benefits
114
Training and development
Training: educating technical and operational employees how to better do their CURRENT jobs
Development: educating professionals and managers in the skills they need to their jobs in the FUTURE
115
Performance appraisal
Assessing an employee's performance and providing the employee with feedback
**usually ineffective and based on if your employer likes you or not
The info is gathered from subordinates, peers, clients, customers, and the employee being appraised
116
Performance management
The continuous cycle of improving job performance through goal setting, feedback, coaching, and rewards
- define performance
- measure and evaluate performance
- review performance
- provide consequences
117
Objective appraisals (results appraisals)
Appraisals based on facts and are often numeric
Attempts to empower employees
EX) level of sales, customer complaints filed, etc.
118
Subjective appraisals
Appraisals based on a manager's perceptions of an employee (traits and behaviors)
BARS - behaviorally anchored rating scale
**rated based on specific behaviors
119
360 degree assessment
When an employee is appraised by supervisors, peers, subordinates, and even clients
Must be anonymous
120
Forced ranking performance review system
Involves ranking all employees against one another and putting them on a bell curve. Bad employees must improve and good employees are rewarded. Can discourage teamwork.
121
Formal vs informal appraisals
Formal appraisals: are conducted at specific times throughout the year and are based on specific measures
Informal appraisals: are conducted randomly and have less rigorous assessments (keep employees on their toes)
122
Employee replacement
The broad term that refers to firing, promoting, transferring, or disciplining employees
123
Transferring employees
When you move an employee to a job with similar responsibilities
Done when:
- the org. needs their skills elsewhere
- the org. wants to broaden the employee's skills
- the org. wants to retain the employee's motivation and interest by giving them new challenges
- employee problems need to be resolved
124
Disciplining employees
Temporarily removing them from their job
125
Demoting employees
Permanently moving an employee to a lower level job (with lower pay and responsibilities)
126
Dismissing employees
Layoffs: is dismissed but may be rehired
Downsized: is permanently dismissed, but not due to their performance
Fired: permanently dismissed due to performance
127
Employment at will
States that anyone can be dismissed at any time for any reason
128
5 steps to dismissing employees:
```
Give them time to improve
Don't delay
Document the reasons for the dismissal
Be aware that this is hard for them
Help them find a new job
```
129
NLRB (national labor relations board)
States that employees can have unions and engage in "collective bargaining" (negotiations between management and employees)
130
Fair labor standards act of 1938
Banned child labor and established minimum living standards for workers
131
Occupational safety and health act of 1970 (OSHA)
A body of laws that protect workers from bad working conditions
132
Equal employment opportunity commission (EEOC)
Enforces anti-discrimination
133
Types of workplace discrimination
Adverse impact - when a practice or procedure negatively impacts a protected class of people
Disparate treatment - when an org. intentionally treats people from a protected group differently
134
Affirmative action
Focuses on achieving equal opportunity within an org.
Techniques:
- Active recruitment
- Minority hiring goals
- Elimination of prejudicial interview questions
135
Types of sexual harassment
Quid pro quo: when a person's job is in jeopardy if they don't give into sexual demands
Hostile environment: when an intimidating or offensive work environment is created.
136
Bullies are mostly:
Charming and successful male executives
137
Types of supertrends:
Segmentation of niche products
(offering a wide variety of products to specific groups)
Targets products with shorter time to market
(constantly trying to be the first person to put something on the market)
Radical innovation
(traditional orgs can't take full advantage of disruptive technology)
Effects of China and India
(have cheaper labor and offshoring is becoming more common)
Knowledge as a competitive advantage
(these "data workers" are becoming more useful employees)
138
Reactive vs proactive change
Reactive change - making changes in response to problems or opportunities as they arise
Proactive change - carefully thought-out changes made in anticipation of possible or expected problems and opportunities
139
External forces for change
```
Demographic changes
Changes in the market
Technological advancements
Social and political pressures
Shareholder and customer demands
```
140
Internal forces for change
Problems with employees
| Behavior of managers
141
Types of change:
Adaptive change - the reintroduction of familiar practices
Innovative change - the introduction of a practice that is new to the org
Radically innovative change - the introduction of a practice that is new to the industry
142
Lewin's change model
States that change occurs in 3 steps:
Unfreezing - managers encourage employees to give up the old ways of doing things
Changing - managers give employees the tools needed to change (benchmarking, mentors, experts, training)
Refreezing - changes are integrated into normal routines
143
Benchmarking
Comparing an org's progress to that of a high performing org.
144
Kotter's 8 steps for leading organizational change
```
Create a sense of urgency
Create a guiding coalition
Develop a vision and strategy
Communicate the change vision
Empower broad-based action
Generate short-term wins
Consolidate gains and produce more changes
Anchor new approaches in the culture
```
**he believes that successful change is a result of good leadership, not good management
145
Invention
The process of creating something new
146
Innovation
The process of coming up with new ideas and turning them into useful applications
The most innovative firms are not afraid of failure
Innovation cannot be systematized
147
Creativity
Developing something new or unique
148
Product vs process innovation
Product innovation - changing a current product or introducing a new one
Process innovation - changing the way a product is conceived, manufactured, or disseminated
149
Core vs transformational innovation
Core innovation is the modification of existing products for existing customers
Transformational innovation is the creation or replacement of new products to create new markets
150
How to foster innovation
Create a culture that celebrates failure
Assign the right people and devote the right amount of time, money, energy, and focus to innovation
Reward top-performing innovators
