Term
| Define Strategic Management |
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Definition
| the process through which organizations analyze and learn from their internal and external environments, establish strategic direction, create strategies that are intended to help achieve established goal, and execute those strategies, all in an effort to satisfy key organizational stakeholders. |
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Term
| What factors influence the broad environment? |
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Definition
Sociocultural forces
technological forces
economic forces
political/legal forces |
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Term
| What factors influence the task environment? |
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Definition
Government agencies/administrators
suppliers
competitors
unions
financial intermediaries
local communities
activist groups
customers |
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Term
| CHAPTER 2: Exhibit 2.5 highlights various stakeholder groups that firms may need to partner with and what partnering tactics firms might use. As an example, what are the partnering tactics that the text states may be appropriate for cooperating with customers? |
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Definition
Involvement in design teams or in product testing
joint training/service programs
appointments to board of directors |
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Term
| What are the five general categories that internal resources/capabilities fall into? |
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Definition
Human resources
Physical resources
financial resources
knowledge and learning resources
General organizational resources |
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Term
| What makes a resource or capability a core competence? |
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Definition
If the business has the following characteristics and also can apply them to more than one business area within the same company:
1. The resources or capabilities are valuable
2. the resources or capabilities are unique
3. The organization is suited to exploitation of the resource or capability
4. the firm's managers are aware of the potential of the resource or capability to lead to a competitive advantage and have taken steps to realize the advantage.
5. the resources are difficult or expensive to imitate
6. There are no readily available substitutes. |
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Term
| What are some examples of human resources? |
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Definition
superior CEO characteristics
Governance/board of directors
experienced managers
well trained, motivated, loyal employees
special skills and abilities |
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Term
| What are some examples of physical resources |
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Definition
machinery
superior locations
raw material access
patents, trademarks, secrets |
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Term
| What are some examples of Financial resources? |
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Definition
strong cash flow
strong balance sheet
capacity to borrow/credit ratings
superior past performance |
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Term
| What are some examples of knowledge and learning resources |
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Definition
superior technology
strong R&D program
excellent innovation and learning processes |
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Term
| What are some examples of general organizational resources? |
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Definition
reputation
well-known brands
excellent structure and culture
superior management systems
strong relationships with external stakeholders
excellence in a particular functional area. |
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Term
| What are the primary responsibilities of a CEO? |
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Definition
1. create or design the organization's purpose, vision, and core values.
2. oversee the creation of policies, strategies, and structure that translate purpose, vision, and core values into business decisions
3. create an environment for organizational learning by serving as a coach, teacher, and facilitator.
4. serve as stewards for their organizations in the sense that they care about the organization and the society in which it operates. |
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Term
| Define the term -strategic direction- |
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Definition
| ;established and communicated through tools such as missions, visions, business definitions, value statements, sustainability statements, and codes of ethics. |
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Term
| In agency theory, who are the agents? What is the agency problem? |
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Definition
| The top managers are the agents, and the problems arise when managers attempt to maximize their own self-interests at the expense of shareholders. |
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Term
| What does the book say the relationship is between high performance of the firm and social responsibility? |
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Definition
| high performance allows the firm to be socially responsible and social responsibility leads to high performance |
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Term
| Define two offensive tactics |
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Definition
Aggressive competition: some firms use their abundant resource positions to overwhelm their rivals by rendering counter-moves ineffective
2. First mover: be the first to develop a product and have your brand associated with the industry. |
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Term
| Can a second mover be successful? |
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Definition
| Yes. They can simply learn from the mistakes of the first-mover and capitalize on the growing market. |
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Term
| What defense tactics designed to prevent? |
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Definition
| Preventing competitors from engaging in particular behaviors |
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Term
| Describe the two major defensive tactics |
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Definition
Threat of Retaliation: firms may threaten this in an effort to prevent competition from taking actions that ay be damaging to their own competitive position.
Barriers to imitation: using strong brand names, trademarks, patents etc to prevent competition from enjoying a "second-mover" advantage. |
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Term
| What is a multi-domestic approach to business level strategy? |
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Definition
| It involves custom tailoring products and services around individual market needs and may involve conducting the design, assembly, and marketing on a country-by-country or region-by-region basis. |
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Term
| What is a global approach to business level strategy? |
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Definition
| using one undifferentiated product design throughout the world. |
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Term
| What is a transnational approach to business level strategy? |
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Definition
| Combines the efficiencies of the global strategy with the local responsiveness of the multidomestic strategy. |
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Term
| What is a concentrate corporate strategy? |
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Definition
| Engaging a corporate strategy in a single business area (ex. Dominoes, Federal Express, etc.) |
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Term
| What are the four advantages of a concentration strategy? |
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Definition
1. a single business approach allows an organization to master one business area and industry environment
2. the organization may be in a better position to develop the resources and capabilities necessary to establish a sustainable competitive advantage
3. can prevent the proliferation of management levels and staff functions that often associated with large multi-business firms, and that add overhead costs and limit flexibility.
4. allows a firm to invest its profits back into the business rather than competing with other corporate holdings for investment funds. |
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Term
| What are the four disadvantages of a concentration strategy? |
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Definition
1. Since the org is dependent on one product they are more susceptible to industry change.
2. Product obsolescence and industry maturity
3. uneven cash flows and profitability
4.may not provide enough challenge or stimulation to managers. |
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Term
| What is vertical integration? |
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Definition
| describes the extent to which a firm is involved in several stages of the industry supply chain |
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Term
| What is raw materials extraction? |
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Definition
| the extraction of the initial raw materials for production such as timber, ore, or crude oil |
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Term
| what is primary manufacturing? |
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Definition
| raw materials are converted to commodities such as wood pulp or iron. Sometimes also involves creation of components that are used to assemble final products such as engines, transmissions and brake systems in automobiles. |
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Term
| what is product manufacturing? |
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Definition
| involves the creation of a product that is in its final form prior to consumption |
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Term
| What are wholesaling and retailing? |
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Definition
entails channeling final products to retail outlets
sell the products to the end consumer |
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Term
| What are the four types of products in the BCG product portfolio management matrix? |
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Definition
Stars: high growth- high mkt share
Cash cows: low growth - high market share
Dogs: low growth - low market share
Question marks: high growth - low market share |
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Term
| Well-developed function strategies should have what three characteristics? |
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Definition
1. Decisions made within each function should be consistent with each other.
2. Decisions made within one function should be consistent with those made in other functions
3. Decisions made within functions should be consistent with the strategies of the business. |
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Term
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Definition
| the plan for investing marketing efforts and resources to achieve business goals. |
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Term
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Definition
| the plan for aligning the production or service operations of the firm with the intended business strategies |
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Term
| Research and development strategy |
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Definition
| the priorties for new product and service development, long-range innovation efforts, the role of intellectual property protection and any alliances or partnerships needed to advance innovative goals. |
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Term
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Definition
| approach to recruitment, selection, training, performance evaluating, rewards and other key human resource management practices. |
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Term
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Definition
| when an organization is broadly diversified, with several business in its portfolio management may choose to form these with each one incorporating a few businesses that have something in common. |
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Term
| What is the primary purpose of financial strategy? |
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Definition
| to provide the organization with the capital structure and operating funds that are appropriate for implementing growth and competitive strategies, and to do so in a manner that maximizes financial returns to the organization. |
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Term
| What is the purpose of information systems strategy? |
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Definition
| to provide the organization with the technology and systems that are necessary for operating, planning and controlling the business. |
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Term
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Definition
| A system created by organizations to manage the flow of information throughout the entire organization. |
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Term
| The ________ specifies the number and types of departments or groups and provides the formal reporting relationships and lines of communication among internal stakeholders. |
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Definition
| formal organizational structure |
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Term
| Administrative inefficiencies, poor service to customers, communication problems, or employee frustrations may indicate a mismatch between what two things? |
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Definition
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Term
| Define a functional structure. Are people grouped on the basis of inputs, outputs, or both in this structure? |
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Definition
| It is organized around the inputs or acitivties that are required to produce products and services, such as marketing, operations, finance and RD; inputs |
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Term
| Define a divisional structure. Are people grouped on the basis of inputs, outputs, or both in this structure? |
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Definition
| organized around the outputs of the organization such as products, customers or geographical region; outputs |
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Term
| Define a matrix structure. When are matrix structures most commonly used? |
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Definition
| combines elements of the functional and divisional structures; commonly used in organizations that experience their workload in the form of projects |
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Term
| What are key characteristics of a network structure? |
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Definition
- no formal hierarchy
- information center
- communication
- task forces created on ad hoc basis |
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Term
| What is an organization’s culture? |
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Definition
| the system of shared values that guide employees |
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Term
| List 5 factors that can encourage innovation and entrepreneurship within an organization. |
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Definition
1. Strategic direction that incorporates a strong innovation and entrepreneurship theme.
2. a culture that encourages creative thinking and risk taking
3. top management support of entrepreneurship through example and allocation of resources
4. open communications among levels and areas within the firm, supported by an integrated information system.
5. valuing the ideas of every employees
6. large rewards for internal entrepreneauyrs who create new value.
7. teamwork and collaboration
8. a flat management hierarchy with an emphasis on decentralized decision making
9. organizational champions who can identify a good idea and gather resources needed to turn it into reality.
focus on learning
slack resources available to invest in entr. |
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Term
| Define strategic control system |
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Definition
| a system to support managers in assessing the relevance of the organizations strategy to its progress in the accomplishment of its goals, and when discrepancies do exist, to support areas needing attention |
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Term
| While many firm’s strategic control systems are dominated by financial performance measures, what problems may an exclusive focus on these goals cause? |
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Definition
| managers focusing on short-term profits, sometimes at the expense of long term health of the firm. |
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Term
| What is a “bottom up” control system? |
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Definition
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Term
| Define feedback, concurrent and feedforward controls. |
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Definition
Feedback: provides managers with information concerning outcomes from org activities
Concurrent: provides managers with realtime info about processes and activities so that deviations from plan can be identified before they can affect org results.
Feed forward: helps managers anticipate changes in the external and internal environments, based on analysis of inputs from stakeholders and the broad enviroment |
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Term
| What are the eight characteristics of effective objectives or targets? |
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Definition
1. They are high enough to be motivating
2. they are realistic
3. they are specific
4. they are measurable
5. they are understood by all affected managers and employees
6. they are set through participative processes
7. feedback on performance is part of the process
8. they cover a specific time frame |
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Term
| What are bureaucratic and clan controls? |
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Definition
b: they inclued rules, policies and procedures that guide the behavior of members of the org.
C: socialization processes through which an individual comes to appreciate the values and expected behaviors in an org. (orientation) |
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Term
| What is premise control and how does it help the organization avoid situations in which their established strategies and goals are no longer appropriate? |
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Definition
| a type of feedforward control that involves periodically assessing the assumptions or premises that underlie strategic choices. The periodic evaluation of assumptions is a foundation concept in the iterative, ongoing assessment of the environment in strategic management. |
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Term
| What is the difference between downscoping and retrenchment? |
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Definition
d:involves reducing diversification through divesting nonessential businesses that are not related to the organization's core competencies and capabilities
r: involves tactics such as workforce reductions, closing unprofitable plants, outsources, etc. |
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Term
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Definition
| the action or process of selling off subsidiary business interests or investments. |
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Term
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Definition
| (leverage buyout) involve the private purchsae of a business unit by managers, employees, unions or private investors. |
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Term
| According to the text, successfully managing the business cycle _______ ______ ____________ depend on the ability to accurately forecast its movements. |
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Definition
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Term
| The set of capabilities that allows a firm to respond more swiftly than its rivals to key business cycle turning points and movements is referred to as a firm’s ____________ _______________ ________________. |
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Definition
| business cycle orientation |
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Term
| What are the 5 questions you answered under Step 2 of the Team Strategy Worksheet that help a firm define the strategic plan? (Questions in italics.) |
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Definition
What is your winning aspiration?
Where will you play?
How will you win?
What capabilities must be in place?
What management systems are required? |
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Term
| Where/How should firms look for innovation ideas beyond just creating new products and services (as discussed in the article, “Innovating on the Cheap”? Provide a real-world example of a company or product that has had success innovating on the cheap? |
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Definition
| Rainbird with drip irrigation. save time and effort, resources and less brown spots |
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