Management Chapter Five – Flashcards
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planning
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the conscious, systematic process of making decisions about goals and activities that an individual, group, work unit, or organization will pursue
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cycle
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Planning moves in a _____.
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situational analysis
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a process planners use, within time and resource constraints, to gather, interpret, and summarize all information relevant to the planning issue under consideration
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goals
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targets or ends that management desires to reach
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SMART
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acronym for goals
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specific, measurable, attainable, relevant, time-bound
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SMART
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plans
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the actions or means managers intend to use to achieve organizational goals
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scenario
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a narrative that describes a particular set of future conditions
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single-use, standing, contingency
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three types of plans
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single-use plans
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designed to achieve a set of goals that are not likely to be repeated in the future
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standing plans
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focus on ongoing activities designed to achieve an enduring set of goals
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contingency plans
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specify actions to take when a company's initial plans have not worked well or events in the external environment require a sudden change
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contingency plan
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A different _____ is attached to each scenario.
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strategic managers
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top-level managers
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tactical managers
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middle-level managers
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operational managers
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frontline managers
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strategic planning
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a set of procedures for making decisions about the organization's long-term goals and strategies
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strategic goals
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major targets or end results relating to the organization's long-term survival, value, and growth
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strategy
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a pattern of actions and resource allocations designed to achieve the organization's goals
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active, get there, marketplace, fast, sequence, financial returns
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Five Questions About How the Organization Will Meet its Objectives: 1) Where will we be _____? 2) How will we _____? 3) How will we win in the _____? 4) How _____ will we move, and in what _____ will we make changes? How will we make _____?
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tactical planning
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a set of procedures for translating broad strategic goals and plans into specific goals and plans that are relevant to a particular portion of the organization, such as a functional area like marketing
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operational planning
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the process of identifying the specific procedures and processes required at lower levels of the organization
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tactical planning
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focuses on the major actions a unit must take to fulfill its part of the strategic plan
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aligned
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All levels of planning should be _____.
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strategic management
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a process that involves managers from all parts of the organization in the formulation and implementation of strategic goals and strategies
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mission
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an organization's basic purpose and scope of operations
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strategic vision
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the long-term direction and strategic intent of a company
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stakeholders
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groups and individuals who affect and are affected by the achievement of the organization's mission, goals, and strategies
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financial analysis, human resources assessment, marketing audit, operations analysis
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four components of internal resource analysis
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financial analysis
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examines financial strengths and weaknesses through financial statements such as a balance sheet and an income statement and compares trends to historical and industry figures
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human resources assessment
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examines strengths and weaknesses of all levels of managers and employees and focuses on key human resources activities, including recruitment, selection, placement, training, labor union relationships, compensation, promotion, appraisal, quality of work life, and human resources planning
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marketing audit
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examines strengths and weaknesses of major marketing activities and identifies markets, key market segments, and the organization's competitive position (market share) within key markets
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operations analysis
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examines the strengths and weaknesses of the organization's manufacturing, production, or service delivery activities
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resources
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inputs to a system that can enhance performance
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core capability
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a unique skill and/or knowledge an organization possesses that gives it an edge over competitors
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SWOT analysis
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a comparison of strengths, weaknesses, opportunities, and threats that helps executives formulate strategy
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strengths, weaknesses, opportunities, threats
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What do the letters in SWOT stand for?
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tangible and intangible
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two broad categories of assets
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intangible assets
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things such as company reputation, culture, technical knowledge, and patents, as well as accumulated learning and experience
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benchmarking
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the process of assessing how well one company's basic functions and skills compare with those of another company or set of companies
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corporate strategy
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the set of businesses, markets, or industries in which an organization competes and the distribution of resources among these entities
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concentration
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a strategy employed for an organization that operates a single business and competes in a single industry
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vertical integration
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the acquisition or development of new businesses that produce parts or components of the organization's product
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related diversification
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a strategy used to add new businesses that produce related products or are involved in related markets and activities
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unrelated diversification
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a strategy used to add new businesses that produce unrelated products or are involved in unrelated markets and activities
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concentration, vertical integration, related diversification, unrelated diversification
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four basic alternatives for a corporate strategy (in order from very specialized to highly diverse)
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business portfolio
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what the diversified businesses of an organization are sometimes called
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BCG matrix
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a popular technique for analyzing a corporation's strategy for managing its portfolio
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question marks, stars, cash cows, dogs
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four categories of businesses in the BCG matrix
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question marks
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high-growth, weak-competitive position businesses that require substantial investment to improve their position, or else they should be divested
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stars
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businesses with high growth and a strong competitive position that requrire heavy investment but whose strong position lets them generate the needed revenues
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cash cows
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low-growth businesses with a strong competitive position that generate revenues in excess of their investment needs, so that they fund other businesses
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dogs
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low-growth, weak-competitive-position businesses that should be divested after their remaining revenues are realized
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market growth, relative competitive position
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The vertical axis of the BCG matrix is _____, and the horizontal axis is _____.
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high, strong
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Stars are _____ in market growth and have _____ relative competitive position.
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high, weak
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Question marks are _____ in market growth and have _____ relative competitive position.
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low, strong
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Cash cows are _____ in market growth and have _____ relative competitive position.
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low, weak
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Dogs are _____ in market growth and have _____ relative competitive position.
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business strategy
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the major actions by which an organization competes in a particular industry or market
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low-cost strategy
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a strategy an organization uses to build competitive advantage by being efficient and offering a standard, no-frills product
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differentiation strategy
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a strategy an organization uses to build competitive advantage by being unique in its industry or market segment along one or more dimensions
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unwilling, unable
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The most effective strategy is one that competitors are _____ or _____ to imitate.
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functional strategies
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strategies implemented by each functional area of the organization to support the organization to support the organization's business strategy
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strategic control system
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a system designed to support mangers in evaluating the organization's progress regarding its strategy and, when discrepancies exist, taking corrective action
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strategic tasks, organization capabilities, implementation agenda, implementation plan
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Four Steps of Strategy Implementation: 1. define _____, 2. assess _____, 3. develop an _____, and 4. create an _____.
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certainty
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the state that exists when decision makers have accurate and comprehensive information
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uncertainty
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the state that exists when decision makers have insufficient information
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risk
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the state that exists when the probability of success is less than 100 percent and losses may occur
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programmed decision
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used when the problem is frequent, repetitive, and routine, with much certainty regarding cause-and-effect relationships
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programmed decision
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depends on policies, rules, and definite procedures
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nonprogrammed decision
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used when the problem is novel and unstructured, with much uncertainty regarding cause-and-effect relationships
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nonprogrammed decision
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needs creativity, intuition, tolerance for ambiguity, and creative problem solving
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identify, diagnose, alternative solutions, evaluate, choice, implement, evaluate
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Six Stages of Formal Decision-Making: _____ and _____ the problem, generate _____, _____ alternatives, make the _____, _____ the decision, and _____ the decision.
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situational analysis
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strategic planning step associated with "identifying and diagnosing the problem"
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alternative goals and plans
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strategic planning step associated with "generating alternative solutions"
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goal and plan evaluation
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strategic planning step associated with "evaluating alternatives"
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goal and plan selection
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strategic planning step associated with "making the choice"
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implementation
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strategic planning step associated with "implementing"
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monitor and control
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strategic planning step associated with "evaluation"
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ready-made solutions
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ideas that have been seen or tried before
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custom-made solutions
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new, creative solutions designed specifically for the problem
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maximizing
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a decision realizing the best possible outcome
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satisficing
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choosing an option that is acceptable, although not necessarily the best or perfect
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optimizing
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achieving the best possible balance among several goals
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illusion of control, framing effects, discounting the future
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three psychological biases
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illusion of control
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a belief that one can influence events even when one has no control over what will happen
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framing effects
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a decision bias influenced by the way in which a problem or decision alternative is phrased or presented
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discounting the future
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a bias weighing short-term costs and benefits more heavily than longer-term costs and benefits
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real-time information, effectively, efficiently, realistic view
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Three Tactics for Managing Time Pressures: Focus on _____, involve people more _____ and _____ in the decision-making, and take a _____ of conflict.
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information, perspectives, discussion, group process, commitment
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Advantages of Using Groups: 1. more _____ improves decisions, 2. different _____ enhance problem solving, 3. group _____ spurs thinking, 4. involvement in _____ leads to enhanced understanding of decisions, and 5. participation in problem solving increases _____ to decisions.
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dominates, satisficing, groupthink, displaced
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Disadvantages of Using Groups: 1. one person _____ the discussion and undermines the group process, 2. group produces a _____ decision, 3. pressure to avoid disagreement leads to _____, and 4. original goals are _____ by new, less important goals.
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groupthink
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a phenomenon that occurs in decision making when group members avoid disagreement as they strive for consensus
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goal displacement
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a condition that occurs when a decision-making group loses sight of its original goal and a new, less important goal emerges
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devil's advocate
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a person who has the job of criticizing ideas to ensure that their downsides are fully explored
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dialectic
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a structured debate comparing two conflicting course of action
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brainstorming
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a process in which group members generate as many ideas about a problem as they can; criticism is withheld until all ideas have been proposed
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leadership style, disagreement, conflict, creativity
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Effectively managing group decision making has three requirements: 1. appropriate _____, constructive use of _____ and _____, and 3. enhancement of _____.
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psychological biases, time pressures, social realities
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three ways that human nature erects barriers to good decisions
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establish, opportunities, threats, strengths, weaknesses, SWOT analysis, strategy, implement
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The Strategic Planning Process: 1. _____ a mission, vision, and goals, 2. analyze external _____ and _____, 3. analyze internal _____ and _____, 4. conduct a _____ and formulate _____, 5. _____ the strategy.
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information, cognitive limits, time limitations
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Herbert Simon asserts that full rationality is limited due to incomplete _____, the _____ of the decision maker, and _____.
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bounded rationality
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Herbert Simon introduced the idea of _____ in the 1950s.
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symptom, cause, why, goal, sub-goals
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We typically first become aware of an issue because of a _____, and our knee-jerk reaction is to assume a _____. Instead, we need to ask "_____?" to determine what the real _____ is and what _____ must be met to achieve it.
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imagine, steps, resources, activities, time line, responsibility
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Implementing the Decision: _____ how things will be once the decision is fully implemented, lay out the _____ necessary to achieve that end, identify _____ and _____ needed, create a _____, and assign _____.
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go wrong, externalities, targets
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Other things to consider when Implementing the Decision: What might _____? What _____ might come from this (positive and negative)? What _____ should be met along the way to help in evaluating the implementation?
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monitor, identify, gather, evaluate, recycle
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In Evaluating the Decision, you must _____ it, clearly _____ what it should achieve, _____ and _____ data, and (if necessary) _____ and go through the process again.
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time pressures
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the reality that managers are often pressed for time and thus must make quick decisions
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cause, new
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Make sure, with Time Pressures, that you solve the _____ (not the symptom) and that you use _____ information (not out of date).
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group decision making, politics, important others
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Three social realities are _____, _____, and the fact that you might try to satisfy ____.
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planning
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a purposeful effort that is directed and controlled by managers and often draws on the knowledge and experience of employees throughout the organization
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long, medium, short
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three levels of planning
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inversely, increases, shorter
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Detail and Time are _____ related so that the level of detail _____ as the time gets _____
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detail and time
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What are inversely related?
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linear, iterative, reconsideration
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While the Strategic Management Process is portrayed as _____, in practice it is likely to be _____ as things revealed at a later stage may highlight issues that require _____ of an earlier stage.
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internal, external
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In SWOT, strengths and weaknesses are _____ while opportunities and threats are _____.
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labels, shared, internalized
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When it comes to Mission and Vision, specific _____ are not as important as having a clear sense of who or what the company is, where it's trying to go, and its philosophy. To be of value, these values must be widely _____ and _____ within the company.
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context
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Categorization of something as a Strength or a Weakness or a Opportunity or Threat depends on _____. An opportunity for one organization may be a threat for another.
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best practices, performance, costs
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The goal of Benchmarking is to thoroughly understand the "_____" of other firms and to undertake actions to achieve both better _____ and lower _____.
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VRIO
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Just because a company has a resource or capability doesn't mean it can leverage it for competitive advantage. For it to allow for a competitive advantage, it must meet _____ criteria.
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valuable, rare, inimitable, organizable
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VRIO
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inimitable
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difficult to imitate
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valuable
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capabilities that either help a firm to exploit opportunities to create value for customers or to neutralize threats in the environment
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rare
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capabilities that are possessed by few, if any, current or potential competitors
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inimitable
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capabilities that other firms cannot develop easily, usually due to unique historical conditions, causal ambiguity or social complexity
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organizable
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capabilities that the firm can organize around in order to exploit
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SWOT, goals, mission, vision, goals
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You can use the outcome of the _____ along with the company's _____, _____, and _____ to determine Strategy. Bear in mind that you may need to reconsider _____ after the SWOT.
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accomplish, external, skills, abilities, culture
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Take what you learned from the external and internal parts of the SWOT analysis and look at it in light of what the company is trying to _____, the nature of the _____ environment, the _____ and _____ of the company, and the company's ______.
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corporate strategy
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asks what business or businesses do we want to be in and what relationship do we want to have among those businesses
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corporate and business
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two distinct levels of consideration with Strategy Formulation
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Porter's Generic Strategies
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describe general approaches to competing - broad categories of Product/Market and Value Proposition combinations. The specifics associated with any quadrant - i.e. what broad or narrow mean, low cost leadership or differentiation would be achieved - will vary with the industry
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tactical, operational, implementation plan
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Much of the specific implementation of the broadest strategy will be done through _____ and _____ plans. BUT you still need to create an _____ to identify key areas, resources needed, targets, etc.
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aligned, broader, revisiting
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As tactical and operational plans are created, managers need to make sure that they are truly _____ with and implementing the _____ strategy. This may mean ______ this strategy.
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data, expectations, not met
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Monitoring is essential, as managers need to find a way to quantify and image the desired outcome. Then they must establish a system for collecting necessary ______, evaluating results relative to _____, and responding/changing targets if _____.