Chapters 1-4 – Objectives – Strategic Management – Flashcards
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What is strategic management?
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Management consisting of the analysis, decisions, and actions an organization undertakes to create and sustain competitive advantages.
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What are the four key attributes of strategic management?
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1. Concern with overall objectives 2. involves multiple stakeholders 3. Incorporates short and long term perspectives 4. recognizes tradeoffs between effectiveness and efficiency.
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Effectiveness and Efficiency
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Effectiveness is "doing the right thing" and efficiency "doing things right"
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What are three processes of strategic management?
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Analysis, formulation, and implementation
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Ambidexterity
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the challenge managers face of both aligning resources to take advantage of existing product markets as well as proactively exploring new opportunities.
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Corporate Governance
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Essential to ensuring that the actions of a firm's management are consistent with the goals of its owners.
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Who are the primary participants of corporate governance?
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1. Shareholders (owners) 2. Management (led by the chief executive officer) 3. Board of directors (elected by the shareholders to represent their interests.
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Symbiosis
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Various stakeholder's interests are considered interdependent and can be attained simultaneously.
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Zero Sum Game
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Various stakeholder's compete for the organization's resources: the gain of one individual or group is the loss of another individual or group.
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Social responsibility
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Expectation that businesses or individuals will strive to improve the overall welfare of society.
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Shared Value
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Policies and operating practices that enhance the competitiveness of a company while simultaneously advancing the economic and social conditions in which it operates.
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The Triple Bottom Line
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The assessment of a firm's financial, social, and environmental performance.
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Describe the three types of leaders.
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Local Line leaders - who have significant profit-and-loss responsibility. Executive leaders - who champion and guide ideas, create a learning infrastructure, and establish a domain for taking action. Internal networkers - who, although they have little positional power and formal authority, generate their power through the conviction and clarity of their ideas.
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In order to be meaningful, Strategic Objectives need to be ...
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Measurable, specific, realistic, and timely
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Strategic Objectives
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A set of organizational goals that are used to operationalize the mission statement and that are specific and cover a well-defined time frame.
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Vision
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Organizational goal(s) that evoke(s) powerful and compelling mental images.
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Mission statement
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a set of organizational goals that include both the purpose of the organization, its scope of operations, and the basis of its competitive advantage.
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Hierarchy of goals
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organizational goals ranging from, at the top, those that are less specific yet able to evoke powerful and compelling mental images, to, at the bottom, those that are more specific and measurable.
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Romantic view of leadership
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Situations in which the leader is the key force determining the organization's success - or lack thereof.
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External control view of leadership
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Situations in which external forces - where the leader has limited influence - determine the organization's success.
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Strategy
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The ideas, decisions, and actions that enable a firm to succeed.
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Competitive advantage
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A firm's resources and capabilities that enable it to overcome the competitive forces in it's industries.
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Operational effectiveness
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Performing similar activities better than rivals.
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Intended strategy
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Strategy in which organizational decisions are determined only by analysis.
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Realized strategy
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Strategy in which organizational decisions are determined by both analysis and unforeseen environmental developments, unanticipated resource constraints, and/or changes in managerial preferences.
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Strategy analysis
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Study of firms' external and internal environments, and their fit with organizational vision and goals.
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Strategy formultion
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Decisions made by firms regarding investments, commitments, and other aspects of operations that create and sustain competitive advantage.
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Strategy implementation
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Actions made by firms that carry out the formulated strategy, including strategic controls, organizational design, and leadership.
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What processes do managers use to develop forecasts?
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Scanning, monitoring, and competitive intelligence
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Environmental Scanning
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Surveillance of a firm's external environment to predict environment changes and detect changes already under way.
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Environmental monitoring
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A firm's analysis of the external environment that tracks the evolution of environment trends, sequences of events, or streams of activities.
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Competitive Intelligence
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A firm's activities of collecting and interpreting data on competitors, defining and understanding the industry, and identifying competitors' strengths and weaknesses.
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Scenarios Analysis
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An in-depth approach to environmental forecasting that involves experts' detailed assessments of societal trends, economics, politics, technology, or other dimensions of the external environment.
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What are the six segments of the general environment?
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Demographic, Sociocultural, Political/Legal, Technological, Economic, and Global
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Demographic Segment
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Genetic and observable characteristics of a population, including the levels and growth of age, density, sex, race, ethnicity, education, geographic region, and income.
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Sociocultural Segment
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The values, beliefs, and lifestyles of a society.
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Political/legal Segment
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How a society creates and exercises power, including rules, laws, and taxation policies.
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Technological Segment
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Innovation and state of knowledge in industrial arts, engineering, applied sciences, and pure science; and their interaction with society.
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Economic Segment
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Characteristics of the economy, including national income and monetary conditions.
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Global Segment
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Influences from foreign countries, including foreign market opportunities, foreign-based competition, and expanded capital markets.
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What are Porter's five competitive forces?
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1. The threat of new entrants 2. The bargaining power of buyers 3. The bargaining power of suppliers 4. The threat of substitute products and services 5. The intensity of rivalry among competitors in an industry
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Value-chain analysis
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A strategic analysis of an organization that uses value-creating activities.
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What are the two activities used in a value-chain analysis?
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Primary and Support
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Primary activities
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sequential activities of the value chain that refer to the physical creation of the product or service, its sale and transfer to the buyer, and its service after sale.
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What are the five generic primary activities?
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Inbound logistics, operations, outbound logistics, marketing and sales, and Service
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Support activities
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Activities of the value chain that either add value by themselves or add by themselves or add value through important relationships with both primary activities and other support activities.
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What are the four generic support activities?
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Procurement, technology development, human resource management, and general administration.
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Resource based view of the firm
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Perspective that firms' competitive advantages are due to their endowment of strategic resources that are valuable, rare, costly to imitate, and costly to substitute.
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What are the four types of tangible resources?
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Financial, physical, technological, and organizational
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What are the three types of intangible resources?
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Human, innovation and creativity, and reputation
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Financial ratio analysis
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A technique for measuring the performance of a firm according to its balance sheet, income statement, and market valuation.
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What are the five different types of financial ratios?
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1. Short-term solvency or liquidity 2. Long-term solvency measures 3. Asset management 4. Profitability 5. Market value
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What are the two approaches of evaluating firm performance?
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The inclusion of the analysis of financial resources as well as the interests of multiple stakeholders.
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What four perspectives are measured for the balanced scorecard?
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The customer perspective, the internal business perspective, innovation and learning perspective, and financial perspective.
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Hard trend
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a projection based on measurable facts, events, or objects. It is something that will happen.
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Slow trend
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something that might happen and for which the probability that it might happen an be estimated.
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Crowdsourcing
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practice wherein the internet is used to tap a broad range of individuals and groups to generate ideas and solve problems.
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Industry
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a group of firms that produce similar goods or services.
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Competitive environment
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factors that pertain to an industry and affect a firm's strategies.
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Economies of scale
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decreases in cost per unit as absolute output per period increases.
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Product differentiation
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the degree that a product has strong brand loyalty or customer loyalty.
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Switching cost
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one-time costs that a buyer/supplier faces when switching from one supplier/buyer to another.
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Complements
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products or services that have an impact on the value of a firm's products or services.
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Strategic groups
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clusters of firms that share similar strategies/.
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What are the three processes organizations follow to build and leverage human capital?
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Attracting human capital, developing human capital, and retaining human capital.
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What are the two types of mechanisms through which social capital will flow?
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Closure relationships and bridging relationships
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Effective collaboration requires overcoming four barriers:
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1. The not-invented-here barrier (people aren't willing to provide help) 2. The hoarding barrier (people aren't willing to provide help) 3. The search barrier (people are unable to find what they are looking for) 4. The transfer barrier (people are unable to work with the people they don't know well)
