MAN 320F Lecture 8 Outline of Last Lecture I. Composition II. Size III. Cohesiveness IV. G r o u p Processes: Prototyping V. Group Processes: Conflict VI. Functional vs. Dysfunctional Conflict VII.Types of Conflict A. Task B. Process C. Relationship VIII. Conflict and Group PerformanceIX. Iceberg of Interpersonal ConflictX. Five Conflict Management StylesA. Avoidance B. Accommodation C. Competition D. Compromise E. Collaboration XII. Conflict Management Techniques XIII. Why have teams become so popular? XIV.MB Readings XV. Chapter 9: Strategic Management XVI. Strategy: Think-‐Pair-‐Share XVII. Business model XVIII. Why is Strategy Important? The Strategic Management Process Outline of Current Lecture XIX. Organizational Mission and Goals XX. Strategic Analysis Tools A. External Analysis i. STEEP (remote environment) ii. 5-‐Forces (industry environment) B. Internal Analysis i. Resource Based View C. Decision Analysis i. SWOTXXI. Sustainable Competitive Advantage .A. The Question of ValueB. The Question of RarenessC. The Question of ImitabilityD. The Question of SubstitutabilityE. The Question of ExploitationXXII. SWOT MatrixXXIII. Types of Organizational StrategiesXXIV. Corporate Portfolio Analysis-‐The BCG MatrixXXV. Competitive-‐Level Strategies XXVI. Functional Level Strategies XXVII. Strategic Management Today XXVIII. Manager’s BookshelfCurrent LectureChapter 13 (Continued), Chapter 9•Organizational Mission and Goalso Mission: Statement of organization’s purpose§ The scope of its products and services§ Examples: UT, Seton, 3Mo o Goals: Measurable performance targets§ Foundation for further planning§ Example: McCombs School•Strategic Analysis Toolso External Analysis (Opportunities/Threats)§ STEEP (remote environment)§5-‐Forces (industry environment)o Internal Analysis (Strengths/Weaknesses)§ Resource Based View (RBV)** Easier resource than in booko Decision Analysis§ SWOT-‐strengths, weaknesses, opportunities, threats•External Analysis: STEEP (Laczniak & Lusch, 1986)o Socialo Technologicalo Economico Ecologicalo Political•External Analysis: 5-‐Forces (Porter, 1980)o Defines how profit friendly the industry iso o What is driving the emergence of “healthy alternatives” in fast food/snack foodindustries?§ Public desire for healthy food§ Copying competitors§ Responding to substitutes (home cooking)§ All of the above•Internal Analysiso Assessment of the organization’s resources and performance capabilitieso Used to identify§ Strengths and Weaknesses for SWOT analysis§ Core competencies = unique/exceptional organizational capabilities or resources(potential source of competitive advantage)o Internal Analysis: Resource Based View of the Firm (RBV) -‐Barney 1991§ Tangible Assets•Items on balance sheet•Bigger generallyis better§ Intangible Assets•Reputation•Employee morale•Learning culture§ Organizational Capabilities (Processes)•Customer service•Supply chain management•Knowledge management•Sustainable Competitive Advantageo To produce SCA, the resource/capability must:o 1. Produce valueo 2. Be rareo 3. Imperfectly imitable i.e. not easily§ Imitated§ Substitutedo 4. Be exploitable by the organizationo The Question of Value§ Increase efficiency (outputs:inputs)•Information system reduces employees required, or increases the number of calls each employee can answer§ Increase effectiveness (enable new capability)•Opening a new regional campus enables outreach to a new market of studentso The Question of Rareness:§ Resources/capabilities shared by lots of firms in an industry cannot becreate SCA§ Which of these are rare?•A web server•An MIS instructor•A state-‐of-‐the-‐art stamping press•None of the aboveo The Question of Imitability§ Ways imitation can be avoided:•Unique historical conditions (Enron)•Causal ambiguity (Apple)o Others cannot duplicate SCA because they do not understand why it is successful•Social Complexity (SW Airlines)o trust, teamwork, informal relationshipso The Question of Substitutability§ No equivalent resources exist that can be used to implement the samestrategies§ Examples of substitutability:•A superior marketing strategy for a recognized brand name.•A superior technical support group for an intelligent diagnostic software packageo The Question of Exploitation:§ Is a firm organized to exploit the full competitive potential of itsresources and capabilities?§ Are systems in place to enable firms to support the execution of a particular strategy?•E-‐Toys•Notes on “Sustainable”o Barney: When the efforts by competitors to copy/beat the advantage stopo Porter: When advantage provides above-‐average returns in the long runo Sustainable does not mean the advantage will last forever•Gap Analysis: SWOTo Internal Analysis§ Strengths§ Weaknesses§ Matching firm’s resources and capabilitieso External Analysis§ Opportunities§ Threats§ To the competitive environment where it operates•SWOTo A firm shouldn’t judge opportunities by pure financial measureso Competitive advantage often lies in identifying§ A fit between the firm’s strengths and upcoming opportunities§ A weakness that must be dealt with to allow the firm to pursue an upcoming opportunityo Use information to evaluate companies§ Business Source Complete (Publication type: SWOT analysis)•SWOT Matrix-‐TEST QUESTION*Strengths WeaknessesOpportunitiesS-‐OW-‐OThreatsS-‐TW-‐To S-‐O - -‐ ‐ pursue opportunities that fit with company strengthso W-‐O – overcome company weaknesses to pursue opportunitieso S-‐T – identify ways to use strengths to reduce vulnerability to current threatso W-‐T – establish a defensive plan to prevent weaknesses from making firm highlysusceptible to external threats•Types of Organizational Strategies••Corporate-‐Level Strategieso What businesses a company should be ino Growth-‐She will give examples*§ Concentration•Keep opening new stores§ Vertical integration•Backward: buy suppliers•Forward: buy distributors§ Horizontal integration•Buying up competitors•Combine operations with competitor§