Define strategic management

What 3 economic goals guide the strategic direction of almost every business?

• Survival • Profitability- Most important • Growth

Briefly describe the 3 fundamental ethical approaches that managers should consider.

• Utilitarian approach: judging an action based on a goal to provide the greater good for the greatest number of people • Moral rights approach: judging an action based on a goal to maintain the fundamental rights and privileges of individuals and groups. • Social justice approach: judging an action based on equity, fairness, and impartiality in the distribution of rewards and costs among individuals and groups

Define corporate social responsibility (CSR)

• a business that has a duty to serve society in general as well as the financial interests of stockholders. Known as a component in the decision making process of business that must determine objectives and how to maximize profit.

define agency theory

• set of ideas on organizational control based on the belief that the separation of the ownership from management creates the potential for the wishes of owners to be ignored.

Dimensions of strategic decisions

Top-Management team decisions: top managers have the power to authorize necessary resource allocations and can understand their broad implications. Large amounts of the firm's resources: Future oriented: based on what managers forecast rather than what they know, emphasis on the development of solid projections that will enable a firm to seek most promising strategic options. Require considering the firm's external environment: all businesses exist in an open system and are effected by the external environment.

What is a social audit?

attempt to measure a company's actual social performance against its social objectives.

List and explain the 5 factors in the operating environment

competitive position: development of competitor profiles help to forecast both short and long term growth and profit potentials customer profiles: geographic, demographic, psychographic, buyer behavior suppliers: a firm relies on suppliers for equipment, financial support and materials creditors: critical for an accurate evaluation of the firms operating costs human resources: reputation, employment rates, availability, etc.

What three modes are available in strategic management?

Entrepreneurial mode Planning mode- large firms Adaptive mode- medium sized firms

Sarbanes Oxley Act of 2002

law that revised and strengthened auditing and accounting standards

Explain how agency problems occur

moral hazard problems adverse selection

3 levels of strategy in an organization

o Corporate level: long term financing and priorities for growth o Business level: plant location, marketing segmentation and distribution o Functional level: action oriented operational issues and short range/low risk decisions

What forces determine how much formality is needed in strategic management?

organizational size problems in the firm production process complexity of the environment predominant management styles stage of firms development.

Define strategic management

set of decisions and actions that result in the formulation and implementation of plans designed to achieve a company's objectives.

When a mission statement is redefined or revised, what components should be present?

• Customer-market • Product-service • Geographic domain • Technology • Concern for survival • Philosophy • Self-concept • Concern for public image • Consumers • Quality

Identify and briefly describe the different factors comprising the remote environment.

• Economic: • Social: beliefs, values, attitudes, opinions and life styles • Political: fair trade decisions, anti trust laws, tax programs, minimum wage legislation, pollution and pricing policies, etc. • Technological: technological forecasting helps protect and improve the profitability of firms in growing industries, also, alerts strategic managers of impending challenges or opportunities • Ecological: relationships among human beings and other living things and the air, soil, and water that supports them. Along with environmental legislation and loss of habitat

Briefly describe the 4 types of social responsibilities that managers can consider

• Economic: duty of managers, as agents of the company owners, to maximize stockholder wealth. • Legal: firm's obligations to comply with the laws that regulate business activity. • Ethical: company's notion of right and proper business behavior • Discretionary: voluntarily assumed by a business organization

List 5 major responsibilities of the board of directors?

• Elect top officers & CEO • Establish and update mission statement • Set a broad company policy • Determine amount and timing of dividends • Establish compensation

List and describe 3 profound social changes in recent years

• Entry of large numbers of women into the labor market • Accelerating interest in consumers and employees in quality-of-life issues • Shift in the age distribution of the population

critical tasks of strategic management

• Formulate the company's mission • Conduct internal analysis • Assess the external environment - competitive and general contexts • Analyze the company's opinions by matching its resources with its external environment. • Identify the most desirable options in light of the mission

Name the 5 principles of successful collaborative social initiatives.

• Identify a long term durable mission • Contribute "what we do" *** Most Important • Contribute specialized services to a large-scale undertaking • Weigh governments influence • Assemble and value the total package of benefits

What solutions are available to the agency problem?

• Owners pay executives a premium for their service to increase loyalty • Executives receive back-loaded compensation • Creating teams of executives across different units of a corporation to help focus performance on organizational rather than personal goals.

Describe the 3 interrelated subcategories that constitute the external environment

• Remote environment: economic, social, political, technological and ecological factors. • Industry environment: entry barriers, supplier power, buyer power, substitute availability, competitive rivalry • Operating environment: competitors, creditors, customers, labor, suppliers

What are the newest trends in mission components?

• Sensitivity to customer wants- customer is the top priority • Quality • Vision statement