MAN3025 Exam 2 NotesCHAPTER 51. Planninga. Coping with uncertainty by formulating future courses of action to achieved specified resultsb. Setting goals and deciding how to achieve them2. Planning and Strategic Management (5 steps)a. Establish the organization’s mission and visionb. Formulate the grand strategyc. Formulate the strategic plans, then the tactical and operational plansd. Implement the strategic planse. Control the strategy3. 4 Basic Strategy Typesa. Defenders – experts at producing and selling narrowly defined productsb. Prospectors – focus on developing new products and in seeking out new markets, rather than waiting for things to happenc. Analyzers – let other organizations take the risks of product development and marketing and then imitate what seems to work bestd. Reactors – make adjustments only when finally forced to by environmental pressures4. 3 Types of Planninga. Strategic planning – determine what the organization’s long-term goals should be for the next 1-5 years or beyond (top management)b. Tactical planning – determine what contributions their departments or similar work units can make during the next 6-24 months (middle management)c. Operational planning – determine how to accomplish specific tasks with available resources within the next 1-52 weeks (first-line management)5. SMART Goalsa. Strategic, Tactical, and Operational goalsb. Specificc. Measurabled. Attainablee. Results-orientedf. Target dates6. Standing vs. Single-Use Plansa. Standing plans – plans developed for activities that occur repeatedly over a period of time (policies, procedures, and rules)b. Single-use plans – plans developed for activities that are not likely to be repeated in the future7. MBOa. Jointly set objectivesb. Develop action planc. Periodically review performanced. Give performance appraisal and rewards, if any8. Planning/Control Cyclea. Make the planb. Carry out the planc. Control the direction by comparing results with the pland. Control the direction by taking corrective action in two waysi. Correcting deviationsii. Improving future plansCHAPTER 61. Sustainable Competitive Advantagea. Occurs when an organization can stay ahead in one or more of four areas:i. Being responsive to customersii. Innovationiii. Qualityiv. Effectiveness2. Strategic Positioninga. Attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company. “Performing different activities from rivals, or performing similar activities in different ways.”3. 3 Common Grand Strategiesa. Growth strategy – involves expansion – as in sales revenues, market share, number of employees, etc.b. Stability – involves little or no significant changec. Defensive – involves reduction in the organization’s efforts4. SWOT Analysisa. Strengths – skills and capabilities that give the organization special competencies and advantages in executing strategies in pursuit of its missionb. Weaknesses – drawback that hinder an organization in executing strategies in pursuit of its missionc. Opportunities – environmental factors that the organization may exploit for competitive advantaged. Threats – environmental factors that hinder an organization from achieving a competitive advantage5. Forecastinga. Trend analysis – hypothetical extension of a past series of events into the futureb. Contingency planning – creation of alternative hypothetical but equally likely future conditions6. Porter’s 5 Competitive Forcesa. Threat of new entrantsb. Bargaining power of suppliersc. Bargaining power of buyersd. Threat of substitute products or servicese. Rivalry among competitors7. Porter’s 4 Competitive Strategiesa. Cost-leadership strategy – keep the costs of a product or service below those of competitors and to target a wide marketb. Differentiation strategy – offer products that are of unique and superior value compared to those of competitors but to target a wide marketc. Cost-focus strategy – keep the costs of a product below those of competitors and to target a narrow marketd. Focused-differentiation – offer product that are of unique and superior value compared to those of competitors and to target a narrow market8. Single-Product vs. Diversificationa. Single-product strategy – company makes and sells only one product within its marketb. Diversification – operating several businesses under one ownership that are not related to one another9. BCG Matrixa. A means of evaluating strategic business units on the basis of their business growth rates and their share of the market10. Execution – consists of using questioning, analysis, and follow-through in order to mesh strategy with reality, align people with goals, and achieve results promised11. 3 Core Processes of Businessa. People – consider who will benefit you in the futureb. Strategy – consider how success will be accomplishedc. Operations – consider what path will be followed12. Control Processa. Engage peopleb. Keep it simplec. Stay focusedd. Keep movingChapter 71. Organizational Culturea. System of shared beliefs and values that develops within an organization and guides the behavior of its members2. Four Types of Organizational Culturea. Clan culture – Employee-focused, values flexibility rather than stability, and encourages collaboration among employeesb. Adhocracy culture – attempts to create innovative products by being adaptable, creative, and quick to respond to changes in the marketplacec. Market culture – focused on the external environment and is driven by competition and a strong desire to deliver resultsd. Hierarchy culture – a formalized structured work environment aimed at achieving effectiveness through a variety of control mechanisms3. 3 Levels of Organizational Culturea. Observable artifacts – physical manifestations such as dress, awards, and stories about a companyb. Valuesi. Espoused – explicitly stated values and norms preferred by an organizationii. Enacted – represent the values and norms actually exhibited in the organizationc. Basic Assumptions – represent the core values of the organization’s culture4. 4 Functions of Organizational Culture5. Common Elements of Organizationsa. Common purpose – unifies employees or members and gives everyone an understanding of the organization’s reason for beingb. Coordinated effort – the coordination of individual effort into group wide effortc. Division of labor – arrangement of having
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