COMM 210 Contemporary Business Thinking Week 2 Building Successful Organizations

Objectives for today

Differentiate between contestable and unproblematic claims Identify Chandlers claims & discuss their validity Understand and practice the uses of concept maps Consider the Samsung case

Sharpen your analytical skills

Critical thinking = Analyzing the validity of arguments presented in a text
Identify the authors major conclusions Describe & evaluate supporting evidence Uncover assumptions & values Determine soundness of causal logic Deconstruct use of persuasive language

CLAIMS

Identify the authors claims

A claim is the major conclusion of a piece of writing that the author is trying to persuade you to accept Explicitly or implicitly stated Likely locations Cue words
Very beginning, title, near the end

therefore, thus, in summary, I believe that, clearly, in short ()

Identify the authors claims

Unproblematic claims
Consistent with our own experiences and observations
I like hiking; I-40 is congested from 2-5pm

Facts independent of interpretation

Quebec is larger than Nova Scotia

Agreement among experts or strongly supported general claims that are common sense
You cant be physically in two places at one time

Technical or mathematical claims

Identify the authors claims

Contestable claims
Not commonly accepted knowledge
Excellent in academic, poor in entrepreneurship

Often introduce new ideas that awaken curiosity

Usage of LinkedIn helps find jobs sooner

Sometimes presented as if it were a fact

In fact..; Obviously.

Cannot stand on their own

Identify the authors claims

Presenting claims

Writing effectively

In an accurate and concise manner Concept lists & concept maps Present main ideas with clarity and emphasis
Claim near the beginning or end Cue words Make your titles work for you Make claim memorable for your readers

Identify the authors claims

Practice with Exercise 2.1: #4 (p. 19)
State the major claim Is it a contestable claim?

Samsung: The next big bet

Review the second paragraph of the Samsung article (The handsome payoffs.)
Summarize the information in a claim Is this a debatable claim?

Business terms and popular expression

Board of directors Bottom Line Chief Executive Officer Emotional intelligence Globalization Knowledge workers Outsourcing R&D Shareholders Vision

*More information & examples in Critical Thinking pg 92-101

Alfred Chandler (1918-2007)

Credited with creating the field of business history
According to one of his students, Dr Chandler could "explain the sea to the fish who swim in it."

Two key concepts

Economies of scale:

Large plants can produce products at a much lower cost than small ones because the cost per unit drops as the volume of output rises

E.g., Rockefeller combined Standard Oil and 39 allied companies to form the standard Oil Trust

Two key concepts

Economies of scope:

Large plants can use many of the same raw and semi-finished materials and intermediate production processes to make a variety of different products

E. g., large German plans were producing more than 500 different dyes and pharmaceuticals at low unit costs

Chandlers major claims

But for firms to benefit from these economies: Flow of materials must be kept constant National (and international) marketing and distribution functions must be created Teams of lower and middle managers need to be recruited

Chandlers secondary claims

Once a firm loses the opportunity to be a first mover, it is difficult to regain competitive advantage First movers challengers have to:
Build plants of comparable size Create distribution and sales channels to capture markets Recruit management teams Catch up with first movers who already invest in R&D to improve processes and products

E.g., IBM-first movers to commercialize computers

However, size is not all!

Chandlers secondary claims

Growth through unrelated diversification is a poor corporate strategy

The Curvilinear Relationship between Diversification and Performance

Chandler: Concept list

First movers Economies of scale Economies of scope Geographical expansion Marketing and distribution channels Management hierarchy Research & development Related diversification

Group exercise

A group of 4 to 6 students Complete your concept map of Chandlers ideas Put your names on it

FIRST MOVER INVESTMENTS

Global

R&D
Expansion Economies of Scale & Scope Management Hierarchy

Related Diversification

Chandlers theory

Samsung: The next big bet

Is the Samsung case consistent with Chandlers ideas? First movers Related diversification Economies of scale R&D Make a claim about what Samsung should do to overcome the challenges ahead

Preparation for next week

Readings for next week

Dont forget to check your mailbox and our class folder on FirstClass

Greiners article about the organizational life cycle (On library website) Born Global, Business strategy review (On electronic reserve in Webster library) Global niche players, The Economist, Feb 2, 2013 (On electronic reserve in Webster library) Textbook (Dyer), Evidence (chapter 3) Team project guidelines posted on First Class

Before you leave

Take a minute to write down (1 minute paper)

Turn in

Your name What you answered/said in todays class today What you learned today Your individual 1 minute paper Your group concept map