MGMT 309 1nd Edition Exam 2 Study Guide Lectures 8 12 Lecture 8 February 11 Chapter 7 Basic Elements of Planning and Decision Making Goals 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 rewards Plans 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 managers o Contingency Planning Planning for what could happen o 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 information Barriers to Goals and planning Inappropriate goals and reward system complex environment Reluctance to establish goals and change and constraints Types 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 voice Be sure to go over the effectiveness of formal goal setting list Lecture 9 February 13 Chapter 8 Managing Strategy and Strategic Planning Strategy Comprehensive plan for accomplishing an organization s goals Effective ones promote superior 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 resources Strategic Management formulating and implementing strategies to take advantage of business opportunities and meet competitive challenges Types 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 cheapest o Focus Strategy Concentrate on specific market product like or group of buyers EX all natural Corporate level strategy what kind of business are we in o Single Product Strategy Company has one product Most start here o 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 this SWOT AnalysisStrengths 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 company Weaknesses 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 performance Threats Areas in environment that make it difficult for organization to achieve high performance goals Lecture 10 February 18 Chapter 8 Managing Strategy and Strategic Planning Continued Strategy Types Prospector Creativity Defender Defends its current markets Analyzer Combo of prospector and defender Reactor Has no clear strategy Product 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 naturally Diversification strategies Intern development of new products Developing within boundaries of traditional business operations Replacement of supplierso Backward vertical integration Buy suppliers o Forward vertical integration Sell directly to customers Merger Acquisition Tools for managing diversification Organizational Structure Portfolio management techniques Two important portfolio management techniques o BCG Matrix 2 X 2 Right Market Growth Rate Stars Question Mark Cash Cow Dogs Low Low High Market Share o GE Business Screen 3 X 3 High Industry Attractiveness Winner Winner Question Mark Medium Winner Average Business Loser Profit Producer Loser Loser Low Good Medium Competitive Position High International and Global Strategies Global efficiencies Multimarket Flexibility Worldwide learning Strategic 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 Strategy Chapter 9 Managing Decision Making and Problem Solving Process Recognizing and defining the decision situation Identify alternative strategies Choose the best alternative putting the alternative into practice Lecture 11 February 20 Chapter 9 Managing Decision Making and Problem Solving Continued Types of Decisions Programmed Decision Not a lot of thought NonProgrammed decision Lots of thought and usually occurs much less often Decision Making conditions Decision Making under certainty knows all alternatives and conditions are known Decision Making under Risk There are