Chapter 2 Strategic Management

false

true/false most organization have formal visions that employees embrace

makes aspirations clear, inspires employees to improve performance

two characteristics of good visions

performance measures, performance referents

two important aspects of organizational performance

capture organization's identity, answer question of who we are, explain what role company plays in society to gain support of stakeholders

two things that mission statement tries to do?

keeps managers from just focusing on financial measures-provides balanced view of difference measures that are important for understanding organizational activities that lead to sustained, long term performance

advantage of balanced scorecard

triple bottom line

approach to assessing performance that emphasizes social responsibility, environmental sustainability, and profit ex-Starbucks tries to be profitable, purchase coffee beans from farmers who work under humane conditions, and establish greener retail stores

organizational performance because you need to know how well the organization is performing to determine what strategic changes should be made

assessing ___________ _____________ is really important part of strategic management. why?

number of new skills employees learn each year ex-Starbucks encourages employees to learn new skills through tuition reimbursement. helps reward/retain high achieving employees

couple examples of learning and growth measures

no rare, not organized

competitive disadvantage resource?

rare, organized

competitive parity resource?

profit

difference between average cost and average price represents what

customer value

difference between average price and what customers are willing to pay represents what

referents

financial measures need to be coupled with

be aligned across elements of value chain

firms need to do what to exploit sources of competitive advantage

inspiring employees to work hard to improve organizational performance

important ability for CEOs

vision looks to future, mission statement captures key parts of company's past and present

key difference between vision and mission statement

balanced scorecard

main way to help organize performance measures

target employees' efforts in the same direction

mission statement and vision should do what

goals

narrower aims that should provide clear and tangible guidance to employees as they perform their work on a daily basis

goals

organizations create _______ to work toward achieving their missions and visions

performance referents ex- comparing profit margins to margins of entire industry and rivals

part of assessing organizational performance benchmark used to make sense of an organization's standing along a performance measure

performance measures, understand how well organization is competing in the market

part of assessing organizational performance metrics along which the organization can be gauged>helps organization understand what? ex-profits, stock prices, sales

measures of performance that look at effectiveness and profits how shareholders view the company ex-financial ratios, profits, stock price

part of balanced scorecard what are financial measures, what question does it answer?

relate to organizational efficiency helps answer ? of what company needs to excel at ex-time it takes to manufacture good or deliver service, time it takes to create a good + bring to market DECREASE ORDER fulfillment time

part of balanced scorecard what are internal business process measures? what ? do they answer?

provide insight into whether company can continue to improve and create value, bc companies need to develop new ways to add value as organisation continues to adapt to changing environment

part of balanced scorecard what are learning and growth measures? why is it important?

relate to customer attraction, satisfaction, and retention provide insight into how customers see the company ex-number of new customers, % of repeat customers

part of balanced scorecard what are customer measures? what ? do they answer

warehouse, purchasing department

some example of inbound logistics resources?

warehouse, refrigeration, dining room, menu, staff

some examples of marketing and sales/service resources?

equipment, personnel to make it, quality control, finished goods warehouse

some examples of operations resources?

trucks, delivery personnel, salesforce, warehouse to store inventory

some examples of outbound logistics resources?

valuable, rare, organized

temporary competitive advantage resource?

changes and improvements in other areas spending more money in sales and marketing by having your finance department save money in other areas of the organization, such as divesting from non-core parts of the business

value chain improvements in one area need to be supported by what ex-?

specific, measurable, aggressive, realistic, time-bound

what are SMART goals?

goals that provide a challenge to the organization but are still obtainable forces company to test limits of their abilities

what are aggressive goals? advantage?

goals that can be quantified ex-if your goal is improve water efficiency by 20%, you easily calculate water efficiency

what are measurable goals

goals that are feasible ex-reducing water efficiency by 20% is difficult, but possible

what are realistic goals

goals that have deadlines. motivating because they help structure work time ex-setting deadline of 2020 for water efficiency goal

what are time-bound goals, why are they helpful

innovation and whether company can continue to improve and create value

what do learning and growth measures focus on?

reason for the organization's existence

what is a mission statement?

how well an organization is doing to reach its vision, mission, and goals

what is organizational performance

approach to assessing organizational performance that focuses on four areas: financial, customer, learning and growth, internal business processes

what is the balanced scorecard? what areas does it look at?

what the organization hopes to become in the future, used by exces to inspire people in organization ex-"to be the best company in the world-in the eyes of customers, shareholders, communities, and people"

what is vision? what is used for?

period after goal is accomplished-will org take on new challenges or rest on laurels?

what period relating to goals is also important

use a variety of measures and referents because they provide different information about an organization's functions ex-liquidity, leverage, profitability, efficiency

what should you do when looking at performance measures and referents? why?

if they are explicit rather than vague, helps make it clear where people should be directing their effort ex-we're going to improve water efficiency by 20%

when are goals specific? why if it helpful?

because employees work just hard enough to reach the goal

why are easily obtainable goals bad?

people get discouraged or just give up

why are impossible goals bad

leave people unsure of what to do

why are vague goals bad?