Module 1
Mission Statement
broadly defines the purpose that distinguishes the org from others of a similar type
As a manager you have been asked to work with your employees to develop goals. What can you expect from this process?
-A benefit of plans is that they lock the organization into a course of action it can stick to, even if the environment changes. -A benefit of goals is that they help motivate employees -One of the drawbacks of plans is that they can create a false sense of security
To find competitive edge adopt one of these:
-Differentiation Strategy: managers seek to distinguish the org's products & services from those of others -Cost Leadership Strategy: Managers aggressively seek efficient facilities, cut costs, & use tight cost controls to be more efficient than others -Focus strategy: managers use either a differentiation or cost leadership approach but they concentrate on a specific regional market or buyer group
MBM Benefits
-Improve Performance -Improves Motivation -Aligns individuals & dept goals with company goals
Effective Goals
-specific & measurable -Defined time period -Linked to rewards -Challenging but realistic -Cover Key Results
MBO Process
1) Set Goals 2) Develop Action Plans 3) Review Progress 4) Appraise Overall Performance
Levels of Goals
1)Mission Statement 2)Strategic Goals (Sr. Mgmt) 3)Tactical Goals (Middle Mgmt) 4)Operational Goals (Lower Mgmt)
Crisis Preparation 3 Steps:
1)design a crisis management team 2)create a detailed crisis plan 3)set up effective communication system
Crowdsourcing Strategy
A recent trend that creates opportunity for more meaningful participation by employees in strategy formulation & execution
Key Performance Indicators
Assess what is important to the org & how well the org is progressing toward attaining its strategic goal -Realistic -Linked to reward
Contingency Planning
Company's response to be taken in the case of emergencies, setbacks, & unexpected conditions
Desired future circumstance
Goal
Star
Large market share, rapid growth, additional potential
Cash Cow
Mature, slow growth industry, is a dominant business with large market share
Question Mark
New, rapidly growing industry, small market share Risky; could become a star or could fail
BCG Matrix (Boston Consulting Group)
Organizes businesses along two dimensions-business growth rate & market share
Blueprint for goal achievement
Plan
Tactical Goals
Results that major divisions & depts intend to achieve -Applies to middle management -Describe what major subunits must do for the org to achieve its overall goals
When formulating strategy, Mi Ola's managers scan the business environment for factors that will or could impact the company's competitive advantage. Which of the following would pose as a threat to Mi Ola?
Several top professional women surfers state in interviews that they feel one piece suits are much sexier than bikinis and more practical Mi Ola continues to have limited funds available to invest in inventory, meaning that products are often out of stock
Management by Objectives (MBO)
System where managers & employees define goals for every dept, project, & person & use them to monitor subsequent performance
Through Bullseye univeristy.com, Target corporation uses a reality show-style marketing campaign to build relationships with college students, an ideal market for its affordable dorm room supplies
Target Customers
SWOT Analysis
careful assessment of strengths, weaknesses, opportunities, and threats that affect org performance
External Opportunities & Threats
Threats: Characteristics of the external environment that may prevent the org from achieving its strategic goals Opportunities: Characteristics of the external environment that have the potential to help the org achieve or exceed its strategic goals
True or False: Differentiation strategies can reduce the bargaining power of large customers
True
True or False: A company that strictly controls expenses is likely to use a low cost leadership strategy
True
Porter's Five Competitive Forces
help determine a company's position & competitors in the industry
Strategic Management
set of decisions & actions used to formulate & execute strategies that will provide a competitively superior fit between the org & its environment to achieve org goals
Diversification
strategy of moving into new lines of business
Organization Structure
the set
Benefits of Planning
-Source of motivation -Resource allocation -Guide of Action -Sets a standard for performance
True or False: The ability of employees to create innovative products is critical for companies that adopt a low cost leadership strategy
False
Stretch Goals
Highly ambitious goals that are clear, compelling, & imaginative that they fire up employees & engender excellence -typically beyond current levels that people must innovate to find ways to reach them
Determines goals and means to achieve them
Planning
Strategic Plans
Define the actions by which the company intends to attain strategic goals -Defines activities & resource allocations (cash, personnel, space, facilities) required to meet these targets -Long term (2-5 years)
Market Share
Defines whether a business unit has a larger or smaller share than its competitors
Strategic Goals (Official Goals)
Descries where the org wants to be in the future -pertains to the whole org
Crisis Prevention
Detect warning signs of potential crises-build relationships with employees
True or False: When using a focus strategy, a company tries to create a product that will appeal to the broadest possible customer base
False
Business Growth Rate
How rapidly the entire industry is increasing
Scenario Building
Looks at current trends & discontinues & visualizing future possibilities -Forces managers to rehearse mentally what they would do if their plans collapse
Mission
Org's reason for existence -Describes values, aspirations, & reason for being
Internal Strengths & Weaknesses
Strengths: positive internal characteristics that the org can exploit to achieve its strategic performance goals Weaknesses: Internal characteristics that might inhibit or restrict the org's performance
Management By Means (MBM)
focuses attention on the methods and processes used to achieve goals -Focuses people on considering the means rather than just on reaching the goals
Coalitional Management
involves building an alliance of people who support a manager's goals & can influence others to accept & work towards them -Necessary when managers don't agree on the same goal
Operational Goals
results expected from departments, work groups, and individuals -used by managers to direct employees & resources towards achieving specific outcomes that enable the org to perform efficiently & effectively -precisely defined & measurable
Elements of Competitive Advantage:
-Target customers: define customer & which of their needs are to be served by the company ~Can be defined geographically, demographically, or by other means -Exploit Core Competencies: something the org does especially well in comparison to its competitors -Build Synergy: when organizational parts interact to produce a joint effect that is greater than the sum of the parts acting alone -Create Value: combination of benefits received & costs paid
Helen discusses she might arrive at a budget for her website. If she decides to hire a consultant to make the website more mobile-friendly & integrate better across social media platforms, which of the following would be true
-This would be an operational plan -This would be tactical plan -This would be a strategic goal
Imagine that the American Red Cross Board of Governors set a goal of increasing online donations by 15% year over year for the next 3 years. They view this goal as very challenging but achievable. Why might the organizations leaders set such an ambitious goal?
-To meet goals well beyond what has been accomplished before members of the org often find creative and innovative ways to do things -Highly ambitious goals can inspire employees and volunteers
Limits of Planning
-Too much pressure -False sense of certainty -Hinders response to a turbulent environment -Get in the way of creativity & intuition
A financial advisor hosts a blog where he invites other personal finance experts to guest-blog on everything from real estate to estate taxes to tax write-offs. The variety of advising increases the sites search engine optimization & attract many more potential clients for all the participating financial professionals
Build Synergy
Mi Ola designs swimsuits for women who are athletic in the water and the suits have design features that allow them to stay on during physical activity. This indicates that Mi Ola has a:
Focus strategy cost leadership strategy Cash cow strategy
Tactical Plans
Help execute strategic plans & accomplish a specific part of the strategy -short term (within the year)
1) Strategy
Plan of action that describes resource allocation & activities for dealing with the environment, achieving competitive advantage, & attaining the org's goals
What is the most fundamental of the 4 Planning functions?
Planning
Decentralized Planning
Planning experts work with managers in major divisions or depts to develop their own goals & plans
Dogs
Poor performer, small share, slow growth market, little profit
Crisis Planning
Prepare the org, managers, & employees to cope with sudden catastrophic events that could destroy the firm if a crisis response plan were not in place ex) extreme weather
Competitive Advantage
What sets the org apart from others & provides it with distinctive edge for meeting customer or client needs