Spanish Intermediate
Autor: Mikki • October 31, 2017 • 20,810 Words (84 Pages) • 637 Views
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Of course, it will rarely be the case that all five forces in an industry will be equally threatening at the same time. This can sometimes complicate the anticipation of the average level of firm performance in an industry. Consider, for example, the four industries in Table 2.6. It is easy to anticipate the average level of performance of firms in the first two industries: In Industry I, this performance will be high; in Industry II, this performance will be low; however, in Industries III and IV it is somewhat more complicated. In these mixed situations, the real question to ask in anticipating the average performance of firms in an industry is: “Are one or more threats in this industry powerful enough to appropriate most of the profits that firms in this industry might generate?” If the answer to this question is yes, then the anticipated average level of performance will be low. If the answer is no, then this anticipated performance will be high.
Even more fundamentally, the five forces framework can be used only to anticipate the average level of firm performance in an industry. This is all right if a firm´s industry is the primary determinant of its overall performance. However, as described in the Research Made Relevant section, research suggests that the industry a firm operates in is far from the only determinant of its performance.”
Table. 2.6 Estimating the Level of Average Performance in an Industry
Industry I
Industry II
Industry III
Industry IV
Threat of Entry
High
Low
High
Low
Threat of Rivalry
High
Low
Low
High
Threat of Substitutes
High
Low
High
Low
Threat of Suppliers
High
Low
Low
High
Threat of Buyers
High
Low
High
Low
Expected Average Firm
High
Low
?
?
Performance
Professor Koljatic thinks that the book is wrong in this part. In fact, he wrote a mail to Jay Barney, who acknowledged the mistake. What is the mistake that Jay Barney made? (10 points)
PAUTA
Course: Leadership and Business Strategy , EAA 305a
First semester 2013 First Mid Term Exam
Please write your name in all pages.
This is an “open book” exam.
You have 80 minutes to complete your answers.
You may answer in English or in Spanish.
Question Nº 1
The October 8, 2012 issue of Fortune magazine included a section on “The Greatest Business Decisions of all Time”, in which Henry Ford’s decision to double his workers’ wages, was ranked as the best management decision ever. The story, as reported by Fortune, is as follows:
Henry Ford had a problem. He was becoming too successful. The growing popularity of the Model T was causing him to rethink his ideas about mass production. In 1913, he had introduced the moving assembly line at his plant in Highland Park (Michigan) and it had worked far better than he could have imagined. The year before the assembly line was installed; he had doubled production of the Model T by doubling the size of his workforce. The following year he nearly doubled production again, but this time he did it with the same number of workers. The assembly line had made the plant so efficient that Highland Park payroll actually fell.
The trouble was that employee turnover was accelerating at an alarming rate. The dispiriting, mind-numbing work on the line was causing workers to quit en masse. The men (and it was all men back then) reacted to their narrowly defined, repetitive, and physically demanding jobs by leaving them.
Acting on the advice of his devoted lieutenant, James Couzens, Ford decided to take radical action. On Jan. 5, 1914, Ford and Couzens summoned newspaper reporters to the plant to publicize changes in employment policies at Highland Park that they hoped would improve employee retention. First, the company would reduce the work day from nine hours to eight. Second, it was moving to three shifts a day instead of two, opening up lots of new jobs. But the big news came in the third announcement: subject to certain conditions, Ford would more than double the basic rate of pay to $5 dollars a day. The 11 year old company was willing to spend an additional $10 million dollars annually to improve productivity and the lives of its workers.
The news spread quickly beyond southeast Michigan. “A magnificent act of generosity” declared the New York Evening Post. But the Five Dollar Day turned out to be an excellent investment. Within a year, annual labor turnover fell from 370% to 16%; productivity was up 40% to 70%. Between 1910 and 1919, Henry Ford reduced the Model T’s price from around $800 to $350, solidified his position as the world’s greatest automaker, and made himself a billionaire. And by raising wages he expanded the overall market for the Model T.
“We believe in making 20,000 men prosperous and contented rather than follow the plan of making a few slave drivers in our establishment, millionaires”, Ford said to reporters that January.
End
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