MGMT 309 1nd EditionExam # 2 Study Guide Lectures: 8 - 12Lecture 8 (February 11)Chapter 7: Basic Elements of Planning and Decision MakingGoals – provide a control mechanism and are used in making Plans;- Can be classified by Level:-Mission Statement-Strategic goals – Set by and for top management; broad (Usually Long term)-Tactical goals – Set by and for middle managers (Usually Intermediate Term)-Operational – Set by and for lower-level managers (Usually short term)- Can be classified by area- Can be Classified by Time Frame: Long Term (More than 5 years), Intermediate term (1-5 years) and short (Less than a year)Effective goals are: - Specific and measureable- Cover key result areas- Challenging but realistic- Defined time period- Linked to rewardsPlans – All goals require plans to guide in their achievement; Can be Long-range, Intermediate, or short-range; Kinds include:- Strategic plan- General plans set by and for top management- Tactical plans- Plan aimed at achieving goals set by and for middle management- Operation plans- Short term plan that are set by and for lower-level managerso Contingency Planning- Planning for what could happeno Crisis Management- Response to unplanned event Those responsible for planning:- Planning staff – a job, Not short term- Planning Task Force – Temporary organization for a special circumstance- Board of Directors – Establish corporate mission and strategy- Chief Executive officer- Has major role in planning and implementing the strategy- Executive committee- Top executives that meat with CEO to review strategic plans- Line management – Help formulate strategy by providing informationBarriers to Goals and planning: Inappropriate goals and reward system, complex environment, Reluctance to establish goals and change, and constraintsTypes:- Single Use: Program (Broad) or Projects (Specific)- Standing Plan – Policy(Most Broad), Standard operating Procedure (Little more specific), and Rules and Regulations (Most specific)Management by Objectives- Integrate formal goal setting and giving subordinated a voiceBe sure to go over the effectiveness of formal goal setting list. Lecture 9 (February 13) Chapter 8: Managing Strategy and Strategic PlanningStrategy: Comprehensive plan for accomplishing an organization’s goals; Effective ones promotesuperior alignment between an organization and its goals; Components include:- Distinctive competence – something you do well- Scope- range in which you do well- Resource deployment- How organization will distribute its resourcesStrategic Management: formulating and implementing strategies to take advantage of business opportunities and meet competitive challengesTypes include:- Business-level strategy- How do we compete; Porter’s generic strategies include:o Differentiation strategy – Let themselves apart through quality (Usually means higher prices)o Overall cost leadership- Aim to be the cheapesto Focus Strategy- Concentrate on specific market, product like or group of buyers (EX: all natural)- Corporate-level strategy- what kind of business are we ino Single Product Strategy- Company has one product; Most start hereo Related diversification- synergy between projects; Organization operates in several markets that are somehow linked (Similar technology, Common distribution, Common brand name and reputation, and common customers)o unrelated diversification- Multiply businesses that are not logically associated with another;- Deliberate Strategy – plan chosen and implemented to support specific goals; seen a lot today- Emergent Strategy – pattern of action that develops over time; May not have resources for thisSWOT Analysis-Strengths- Something an organization does well- Common Organizational Strengths- All organizations are able to do the same thing- Distinctive Competencies- Useful for competitive advantage- Sustained competitive advantage: Distinctive competence cannot be easily duplicated;This occurs when it is based on unique historical circumstances or a complex phenomenon. - Imitation of distinctive competencies- Removes the competitive advantage of the companyWeaknesses- can be overcome by investments to obtain the strengths needed; Competitive disadvantage occurs when an organization fails to implement strategies being implemented by others.Opportunities- areas in the environment that may generate high performanceThreats- Areas in environment that make it difficult for organization to achieve high performance goalsLecture 10 (February 18)Chapter 8: Managing Strategy and Strategic Planning ContinuedStrategy Types:- Prospector- Creativity- Defender- Defends its current markets- Analyzer- Combo of prospector and defender- Reactor- Has no clear strategyProduct life Cycle:- Introduction – Low sales; Product has just been introduced.- Growth Stage- Sales are higher; Profits are highest here; - Mature Stage- Peak of sales; Focus on low costs and new products- Decline stage- Sales start to dip; Happens naturallyDiversification strategies- Intern development of new products- Developing within boundaries of traditional business operations- Replacement of suppliers-o Backward vertical integration- Buy supplierso Forward vertical integration- Sell directly to customers- Merger- AcquisitionTools for managing diversification:- Organizational Structure- Portfolio management techniques- Two important portfolio management techniqueso BCG Matrix (2 X 2) -Stars Question MarkCash Cow DogsLow HighMarket Shareo GE Business Screen (3 X 3)Winner Winner Question MarkWinner Average Business LoserProfit Producer Loser LoserGood Medium HighCompetitive PositionInternational and Global Strategies:- Global efficiencies- Multimarket Flexibility- Worldwide learningStrategic alternatives:- Home Replication- Change nothing and bring to another nation- Multi-Domestic Strategies- Treat corporation as collection of independent operating subsidiaries- Global Strategy- View world as single marketplace- Transnational Strategy- Combination of Multi-Domestic strategy and Global StrategyChapter 9: Managing Decision Making and Problem SolvingRightMarket Growth RateLowHighIndustry AttractivenessMediumLowProcess: Recognizing and defining the decision situation -> Identify alternative strategies-> Choose the best alternative -> putting the alternative into practice Lecture 11 (February 20)Chapter 9: