110 Cards in this Set
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Six silent killers of strategy
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1. Top-down laissez-faire senior management style
2. Unclear strategy and conflicting priorities
3. An ineffective senior management team
4. Poor vertical communication
5. Poor coordination across functions, businesses, or borders
6. Inadequate
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Strategy execution
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- most important but most difficult part
- Strategy must be skillfully executed
"Strategy is easy, but execution is hard"
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Alignment
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Requires all aspects of the organization to focus on strategy goals
- everyone is moving in the same direction
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Strategic Flexibility
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managers must be prepared to change and adjust strategy quickly
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Strategic Partnerships
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Collaboration with other organizations is important
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Global Strategy
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a coherent strategy to provide synergy among worldwide operations for the purpose of fulfilling common goals
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Action Plans used by major departments
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- Marketing
- Production
- Finance
- Human Resources
- Research and Development
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Product attributes
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Something the company thinks the customer will be willing to be pay more for
ex: crest whitening, crest sensitive
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Conformance
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how does it conform to industry standards? Some companies do not want their product to conform to industry standards
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Channel Differentiation
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Where the customer inquires information about you and your product - internet, newspaper, friend, store, etc
- Trade show, Direct Channel, Online Channel, Indirect channel
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Unrelated Diversification
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Expansion into new lines of business
- can be a difficult strategy
- many companies are giving up on unrelated diversification
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Diversification
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where a company decides to go into a new market, product category, customer, etc
- may not require synergy, the same core competencies or the same value
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Vertical Integration
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Expands into businesses that supply to the business or are distributors
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Strategic Business Units (SBUs) have:
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a unique mission, products and competitors
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Companies manage the mix of SBUs for:
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- synergy and competitive advantage
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Formulation
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- the stage of strategic management that involves the planning and decision making that lead to the establishment of the organization's goals and of a specific strategic plan
- Assessing the external environment and internal problems to create goals and strategy
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Execution
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The use of managerial and organizational tools to direct resources toward accomplishing strategic results
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Explicit Strategy
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is the plan of action
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Competitive Advantage
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the organization's distinctive edge for meeting customer needs
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Strategies should:
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- exploit core competencies
- build synergy
- deliver value
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Strategic Management
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Decisions and actions used to formulate and execute strategies that will provide competitively superior fit between the organization and its environment to achieve organizational goals
- strategic management is a specific type of planning
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Thinking strategically impacts:
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performance and financial success
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Corporate-Level Strategy
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What business are we in?
- Pertains to the organization as a whole and the combination of business units and product lines that make it up
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Business-Level Strategy
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How do we compete?
- pertains to each business unit or product line within the organization
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Functional-Level Strategy
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How do we support the business-level strategy?
- pertains to all the organization's major departments
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Organizational Control
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is the systematic process through which managers regulate organizational activities to make them consistent with expectations established in plans, targets, and standards of performance
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total quality management
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infuse quality into every aspect of the business, all day to day activities
continually improves
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the balanced scorecard
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balanced perspective of company performance
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Work Specialization
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the degree to which activities in the organization are subdivided into separate jobs
- efficient use of employees skills
- efficient use of organizational resources
- individuals specialize in doing part of an activity rather than the entire activity
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Chain of Command
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an unbroken line of authority that links all individuals in the organization and specifies who reports to whom
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Organizing Structure Designs
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the set of formal tasks assigned to individuals and departments
Formal reporting relationships
the design of the systems to ensure effective coordination
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The deployment of organizational resources to achieve strategic goals
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division of labor
lines of authority
coordination
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Authority
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The formal & legitimate right of a manager to make decisions, issue orders and allocate resources to achieve organizationally desired outcomes
- comes with the position, not with the person
- accepted by subordinates (doesn't mean they like it, but they accept it)
- flows down the vert…
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Accountability
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The fact that the people with authority and responsibility are subject to reporting and justifying task outcomes to those above them in the chain of command
is the mechanism through which authority and responsibility are aligned
- can give someone authority but can not give up all of th…
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Delegation
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the process managers use to transfer authority and responsibility down the chain
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Line Departments
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perform primary business tasks
- sales
- production
- make, sell, and deliver the product to the customer
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Staff Departments
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more in support of line departments
- marketing
- human resources
- accounting
- research
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Span of management
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The number of employees that report directly to a supervisor
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Tall Organizations
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Have more levels and narrow span
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Flat Organizations
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have a wide span and fewer levels
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Centralization
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decision authority is located near the top of the organization
- crisis requires centralization
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Decentralization
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decision authority is pushed downward to all levels
- change and uncertainty are usually associated with this
- strategic fit
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Grand Strategy
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The general plan of major action by which an organization intends to achieve its long-term goals
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Growth
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The expanding of business and it can be promoted internally by investing in expansion or externally by acquiring additional business divisions
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Stability
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Means that the organization wants to remain the same size or grow slowly and in a controlled fashion
- also called pause strategy
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Retrenchment
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The organization is going through a period of forced decline by either shrinking current business units or selling off/liquidating entire businesses
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Globalization
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The standardization of product design and advertising strategies throughout the world
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Multi-domestic
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The modification of product design and advertising strategies to suit the specific needs of individual countries
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Transnational
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A strategy that combines global coordination to attain efficiency with flexibility to meet specific needs in various countries
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Strategy
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the plan of action that prescribes resource allocation and other activities for dealing with the environment and helping the organization attain its goals
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Core Competence
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a business activity that an organization does particularly well in comparison to competitors
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Synergy
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The condition that exists when the organization's parts interact to produce a joint effect that is greater than the sum of the parts acting alone
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Value Creation
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Value can be defined as the combination of benefits received and costs paid by the customers.
- Companies create value by devising strategies that exploit core competencies and attain synergy
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Internal Strengths and weaknesses
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- strengths are positive internal characteristics that the organization can exploit to achieve its strategic performance goals
- weaknesses are internal characteristics that might inhibit or restrict the organization's performance
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External opportunities and threats
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- threats are characteristics of the external environment that may prevent the organization from achieving its strategic goals
- Opportunities are characteristics of the external environment that have the potential to help the organization achieve or exceed its strategic goals
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SWOT Analysis
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Strengths, Weaknesses, Opportunities and Threats
- an analysis of the SWOT that affect organizational performance
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Portfolio Strategy
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a type of corporate-level strategy that pertains to the organization's mix of SBU's and product lines that fit together in such a way as to provide the corporation with synergy and competitive advantage
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BCG Matrix
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a concept developed by the Boston Consulting Group that evaluates strategic business units with respect to the dimension of business growth rate and market share
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Stars
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has a large market share in a rapidly growing industry
- has additional growth potential and it should be a focus of assets
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Cash Cows
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exists in a mature, slow-growing industry but is a dominant business in the industry, with a large market share
- it has a positive cash flow and does not command a large number of assets
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Question Marks
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exists in a new, rapidly growing industry but has only a small market share
- business is risky, it could become a star or fail
**It is the most difficult to identify**
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Dogs
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poor performer; it has only a small share of a slow-growth market
- provides little profit for the corporation and may be targeted for divestment or liquidation if turnaround is not possible
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Porter's Competitive Forces Model
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model that studies the competitive forces that affect a business. It helps determine a company's position in the industry market
- Potential new entrants
- Bargaining power of buyers
- Bargaining power of suppliers
- Threat of substitute products
- Rivalry among competitors
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Potential New Entrants
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faces barriers to enter markets
- capital requirements and economies of scale are examples of these potential barriers that can keep out new competitors
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Bargaining power of buyers
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Informed customers become empowered customers
- because customers are better informed, they have a better bargaining position
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Bargaining power of suppliers
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concentration of suppliers and the availability of substitute suppliers are significant factors in supplier power
- sole suppliers have greater power
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Threat of substitute products
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power of alternatives and substitutes affect a company's bargaining power
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Rivalry among competitors
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bc of competition, it is more difficult for companies to distinguish themselves from other competitors
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Differentiation
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type of competitive strategy with which the organization seeks to distinguish its products or services from competitors
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Cost Leadership
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A type of competitive strategy with which the organization aggressively seeks efficient facilities, cuts costs, and employs tight cost controls to be more effective than competitors
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Focus
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type of competitive strategy that emphasizes concentration on a specific regional market or buyer group
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Leadership
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is the ability to influence people to adopt the new behaviors needed for strategy implementation
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Structural Design
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begins with the organizational chart
- it pertains to managers' responsibilities, their degree of authority and the consolidation of facilities, departments and divisions
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Information and Control Systems
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Include reward systems, pay incentives, budgets for allocating resources, information technology systems, and the organization's rules and policies and procedures
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Human Resources
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Employees
- HR functions to recruit, select, train, transfer, promote and lay off employees to achieve strategic goals
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Implementing Global Strategies
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The larger the company, the harder it is to implement strategies
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Organizing
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the deployment of organizational resources to achieve strategic goals
- Ideal organization: problems solved at the lowest level
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Organization Structure
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the framework in which the organization defines how tasks are divided, resources are deployed and departments are coordinated
- who reports to whom
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Organization Chart
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the visual representation of an organization's structure
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Unity of Command
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each employee is held accountable to only one supervisor
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Responsibility
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the duty to perform the task or activity an employee that has been assigned
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Line authority
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a form of authority in which individuals in management positions have the formal power to direct and control immediate subordinates
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Staff Authority
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a form of authority granted to staff specialists in their area of expertise
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Span of management
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the number of employees reporting to a supervisor is called the span of control. It should be no larger than 7 people. The number is increasing
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Tall Structure
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a management structure characterized by an overall narrow span of management and a relatively large number of hierarchal levels
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Flat Structure
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a management structure characterized by an overall broad span of control and relatively few hierarchal levels
- learning organizations are flat structures
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Formalization
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where companies make written rules and procedures
- it establishes a set way of doing things and helps avoid law suits
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Coordination
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the quality of collaboration across departments
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reengineering
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the radical redesign of business processes to achieve dramatic improvements in cost, quality, service and speed
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Team
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a group of participants from several departments who meet regularly to solve ongoing problems of common interest
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Task Force
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a temporary team or committee formed to solve a specific short-term problem involving several departments
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project manager
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person responsible for coordinating the activities of several departments on a full-time basis for the completion of a specific task
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Learning Organization
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an organization in which everyone is engaged in identifying and solving problems, enabling the organization to continuously experiment, improve and increase its capability
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Traditional Organization
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the vertical structure predominates, with few task forces, teams or project managers for horizontal coordination. Information is formally communicated up and down the organizational hierarchy and is not widely shared
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Characteristics of Learning Organization
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- horizontal structure
- open information
- decentralized decision making and participative strategy
- empowered employees and shared responsibility
- Strong adaptive culture
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Horizontal structure
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a structure that is based on teams where the teams interact with customers, make decisions, and take on the responsibilities associated with job
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Open Information
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an organization where information is widely shared
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Decentralized decision making and participative strategy
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the people closest to the bottom are given the authority and responsibility for decision making
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Empowered Employees and shared responsibility
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empowerment means giving employees the power, freedom, knowledge, and skills to make decisions and perform effectively
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Strong adaptive culture
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a corporate culture that creates a sense of community, that the whole is greater than its parts, and its values change, risk-taking and improvement
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Joan Woodward
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British sociologist
- gathered data from 100 British firms to determine whether basic structural characteristics, such as administrative overhead, span of control, centralization and formalization were different across firms
- found the three basic types of production technology: small …
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Small Batch
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a type of technology that involves the production of goods in batches of one or a few products designed to customer specification
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Mass Production
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a type of technology characterized by the production of a large volume of products with the same specifications
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Continuous process
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A type of technology involving mechanization of the entire workflow and nonstop production
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Service Technology
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technology characterized by intangible outputs and direct contact between employees and customers
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Digital Technology
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Technology characterized by use of the internet and other digital processes to conduct or support business operations
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Interdependence
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the extent to which departments depend on each other for resources or materials to accomplish their tasks
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Pooled Interdependence
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means that each department is part of the organization and contributes to the common good, but each department is relatively independent because work does not flow between units
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Sequential Interdependence
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means that parts or outputs of one department become inputs of another department in serial fashion
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Reciprocal Interdependence
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means that the output of operation A is the input of operation B, and the output of operation B is the input back again to operation A.
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MGMT 371: Final Exam