MG302 Chapter 5, MG 302 Chapter 5

Explicit Strategy

a plan of action

Strategic goals, sometimes called official goals, are

broad statements describing where the organization wants to be in the future.

Which of the following is at the top of an organization's goal hierarchy?

c. The mission statement

translate the plan

-define tactical plans and objectives -develop strategy map -define contingency plans and scenarios -identify intelligence teams

Goals should be

aligned using a strategy map

Develop the Plan

define mission, vision, set goals

Elements of Competitive Advantage

-target customers -achieve synergy -create value -exploit core competence

The crisis management plan (CMP)

is a detailed, written plan that specifies the steps to be taken, and by whom, if a crisis occurs.

Typically set by frontline managers, _______ are the precise, measurable outcomes expected from departments, work groups, and individuals.

operational goals

1. One month from today, I will have lost 20 pounds.

goal

2. Two months from now, I will have 15 licensed electricians working for me.

goal

Differentiation Strategy

A strategy with which managers seek to distinguish the organization's products and services from those of others in the industry.

Organizational Mission

the organization's reason for existence

Synergy

the power that results from the combination of two or more forces

core competencies

those functions that the organization can do as well as or better than any other organization in the world

set stretch goals for excellence

-stretch goals are highly ambitious -clear, compelling, and imaginative -required innovation -goals must be seen as achievable -like Big Hairy Audacious Goal (BHAG) from 1996 Article on "Building Your Company's Vision -As times move faster and become more turbulent, these are important

Organizational Planning Process

1. Develop the Plan 2. Translate the Plan 3. Plan Operations 4. Execute the Plan 5. Monitor and Learn

In discussing inventory, Helena mentions that bikinis for sale on the website are not always in stock. Say customer feedback indicates that when a customer's bikini won't arrive within two weeks, that customer usually cancels their order. Furthermore, retail stores ordering restocks of items usually find another supplier if Mi Ola cannot ship within two weeks. What would be the best action for Helena to take first?

Decide that when online customers and retail stores order bikinis, they will never have to wait more than two weeks for the order to arrive.

Plan Operations

Define operational goals and plans Select measures and targets Set stretch goals Crisis planning

Strategies should:

Exploit Core Competencies Build Synergy Deliver Value Target Customers

When using a focus strategy, a company tries to create a product that will appeal to the broadest possible customer base.

False

________ goals and plans are the responsibility of middle managers, such as the heads of major divisions or functional units

Tactical

In some years, weather patterns have caused there to be few fish in local lakes, and anglers have gone elsewhere. Also, invasive carp are threatening the lakes and may someday cause fish stocks to drop indefinitely. How should these facts impact Dave and Betsy's planning?

They should develop a contingency plan in case few anglers book rooms.

A company that strictly controls expenses is likely to use a low-cost leadership strategy.

True

Differentiation strategies can reduce the bargaining power of large customers.

True

Crisis planning

Unexpected events that are sudden and devastating

A plan is

a blueprint for goal achievement and specifies the necessary resource allocations, schedules, tasks, and other actions.

The formal mission statement is

a broadly stated definition of purpose that distinguishes the organization from others of a similar type.

A goal is

a desired future circumstance or condition that the organization attempts to realize.

The BCG Matrix

a means of evaluating strategic business units on the basis of (1) their business growth rates and (2) their share of the market

A is a desired future circumstance or condition that the organization wants to realize.

goal

To develop effective lower-level goals, Michelle works with her management team to establish _______________ , which measure how well the organization is achieving its strategic goals.

key performance indicators

The BCG matrix

organizes businesses along two dimensions—business growth rate and market share

Goals are _________________, which means they are defined by an individual or a group

socially constructed

Operational plans

specify the action steps toward achieving operational goals and support tactical activities

Top managers are typically responsible for establishing __________ goals and plans that reflect a commitment to both organizational efficiency and effectiveness

strategic

To think ____________ means to take the long-term view and see the big picture

strategically

After strategic goals are formulated, the next step is to define ___________, which are the results that major divisions and departments within the organization intend to achieve.

tactical goals

Levels of Goals and Plans

1. Mission Statement 2. Strategic Goals/Plans Senior Management - Organization as a whole 3. Tactical Goals/Plans middle management 4. Operational Goals/Plans lower management - departments, individuals

Characteristics of effective goals

1. are specific and measurable, 2. have a defined time period, 3. cover key result areas, are 4 .challenging but realistic, are 5. linked to rewards

Essential Stages of Crisis Planning

1. prevention -Build relationships and detect signals from the environment- 2. preparation -designate crises management team and spokesperson, create detailed crisis management plan, set up effective communications system-

Focus Strategy

A strategy where managers use either a differentiation or a cost leadership approach, but they concentrate on a specific regional market or buyer group.

Cost Leadership Strategy

A strategy with which managers aggressively seek efficient facilities, cut costs, and use tight cost controls to be more efficient than others in the industry.

Planning is Fundamental

All of the other management functions stem from planning How do you plan for an undefined future? No plan is perfect Without plans and goals, organizations flounder

competative advantage

An advantage over competitors gained by offering greater customer value, either through lower prices or by providing more benefits that justify higher prices.

When conducting a SWOT analysis, budgets, ratios, and sales reports can be used to identify:

Company strengths and weaknesses

Operational Planning

Direct employees and resources Guide toward efficient and effective performance Includes -Management by objectives (MBO) -Single use plans -Standing plans

Benefits and Limitations of Planning

Goals and plans provide a source of motivation and commitment Goals and plans guide resource allocation Goals and plans are a guide to action Goals and plans set a standard of performance Goals and plans can create a false sense of certainty Goals and plans may cause rigidity in a turbulent environment Goals and plans can get in the way of intuition and creativity

Monitor and Learn

Hold planning reviews Hold operational reviews

Thinking Strategically

The long-term view of the organization and competition Thinking strategically impacts performance and financial success Today's environment requires everyone to think strategically

Strategy

The plan of action that describes resource allocation and activities for dealing with the environment, achieving a competitive advantage, and attaining the organization's goals.

Helena discusses how she might arrive at a budget for her website. If she decides to hire a consultant to make the website more mobile-friendly and integrate better across social media platforms, which of the following would be true?

This would be an operational plan.

Execute the Plan

Use: Management by objectives Performance dashboards Single use plans Decentralized responsibility

Stretch goals

are reasonable yet highly ambitious goals that are so clear, compelling, and imaginative that they fire up employees and engender excellence. Stretch goals are typically so far beyond the current levels that people have to be innovative to find ways to reach them.

The concept of planning usually incorporates

both ideas; it means determining the organization's goals and defining the means for achieving them.

Managers who are analyzing how best to compete within a given industry are concerned with__________ strategy.

business-level

Scientists have discovered that the influenza virus often modifies its genetic material and protein structure. In order to tackle the seasonal changes in the influenza virus, vaccine manufacturers have decided to produce a new influenza vaccine every six months. This is an example of a(n):

c. operational goal.

How would you describe the best type of goal?

clear and specific

When determining ________ strategy, managers consider what proportion of the firm's portfolio of businesses should be in different industries.

corporate-level

At a company located in California, the management team engages in ___________ to develop detailed plans in case of a devastating earthquake.

crisis planning

As a department manager, Aoki worked out a plan with her team and helped set goals for each of her employees to increase their productivity. However, each employee ended up with at least 15 goals. Which of the following criteria for effective goal setting did she violate?

d. Goals should cover only the key result areas.

When discussing how she pitches Mi Ola to investors, Helena says her goals and plans are based on a number of assumptions that might or might not be realistic. You might advise her to _________ to deal with this unpredictable business environment.

decentralize planning

Strategic plans

define the action steps by which the company intends to attain strategic goals. The strategic plan is the blueprint that defines the organizational activities and resource allocations—in the form of cash, personnel, space, and facilities—required for meeting these targets.

Model of the MBO Process

defined in 1954 by Peter Drucker; method for defining goals and monitoring performance 1. Set goals 2. Develop action plans 3. Review progress 4. Appraise overall performance

The mission

describes the organization's values, aspirations, and reason for being. A well-defined mission is the basis for development of all subsequent goals and plans

Strategy

every company is concerned with strategy -it determines which organizations succeed and which ones struggle -strategic blunders can hurt a company

Synergy

exists when the organization's parts interact to produce a joint effect that is greater than the sum of the parts acting alone.

Executives use strategy maps to keep track of key performance metrics, such as percentage of customer service calls resolved within specified time periods.

false

Scenario Building

forecasting technique that looks at current trends and discontinuities and visualizes future possibilities

Two months from now, I will have 15 licensed electricians working for me.

goal

Tactical plans are designed to

help execute the major strategic plans and to accomplish a specific part of the company's strategy.

SWOT analysis

includes a careful assessment of strengths, weaknesses which are internal and opportunities, and threats which are external that affect organizational performance.

Management-by-objectives (MBO)

is a method whereby managers and employees define goals for every department, project, and person and use them to monitor subsequent performance. MBO includes the steps of setting goals, developing action plans, reviewing progress, and appraising performance.

A company's core competence

is something that the organization does especially well in comparison to its competitors.

Strategy execution

is the stage of strategic management that involves the use of managerial and organizational tools to direct resources toward achieving strategic outcomes.

Crisis Planning

is used to tackle issues when an organization faces a situation in which its continued existence may be in question.

3. Walking might be a good way to lose some weight.

plan

Managers are engaged in when they determine desired outcomes and the means to achieve them.

planning

Key performance indicators (KPIs)

are measures that reflect how well lower-level goals are helping the organization progress toward attaining its strategic goal.

I'll recruit people in an International Brotherhood of Electrical Workers apprenticeship program, since they will be more likely to have the skills they need to get their license.

plan

Strategic management

refers to the set of decisions and actions used to formulate and execute strategies that will provide a competitively superior fit between the organization and its environment so as to achieve organizational goals.

Competitive advantage

refers to what sets the organization apart from others and provides it with a distinctive edge for meeting customer or client needs in the marketplace.

For nonprofit organizations, strategy is long-term thinking related to ______________

responding to the needs of stakeholders

When referring to a SWOT analysis, the letter T stands for _______ , and it refers to factors that are ____________to the organization.

threats, external

__________ plans identify the specific procedures or processes needed at lower levels of the organization, such as individual departments and employees

Operational

Formulating Corporate-Level Strategies

Organize Business along two dimensions -business growth and market share Four categories for corporate portfolio -the combination of high/low market share and high/low business growth

Contingency plans

Planning for emergencies, setbacks, or unexpected conditions

A student who has good study habits while in college will likely do which of the following as a new manager?

Prepare an agenda and notes before a meeting with executive management

Formulating Business-Level Strategies

Strategy within the business units: How do we compete? Business-level strategies are developed by porter's five forces web technology is impacting all industries in positive and negative ways

operational goals

Typically set by frontline managers, are the precise, measurable outcomes expected from departments, work groups, and individuals.

A recent approach that focuses people on the methods and processes used to attain results, rather than on the results themselves, is called

management by means (MBM)

The results expected from departments, work groups, and individuals are the

operational goals.

2. I can lose weight by eating more fruits and vegetables.

plan