MGT 2010: 6-10

standard operating procedure

outlines the steps to be followed in particular circumstances

Diversification

the number of different businesses that an organization is engaged in and the extent to which these businesses are related to one another -three types: single product strategy, related diversification, unrelated diversification

span of management

the number of people who report to a particular manager -Graicunas noted that a manger must deal with three types of interactions with and among subordinates 1. direct: the manager's one to one realtionship with each subordinate 2. cross: among the subordinated themselves 3. group: between groups of subordinates I=N(2^N/2+N-1)

strategic imitation

the practice of duplicating another firms distinctive competence and thereby implementing a valuable strategy

delegation

the process by which managers assign work to subordinates -primary reasons is to enable the manager to get more work done >also, some subordinated may have more expertise and to help develop subordinates

departmentalization

the process of grouping jobs according to some logical arrangement

coordination

the process of linking the activities of the various departments of the organization -primary reason is that departments and work groups are interdependent -three major forms of interdependence: pooled, sequential, reciprocal

organization structure

the set of elements that can be used to configure an organization -six building blocks that managers use in constructing on organization: designing jobs, grouping jobs, establishing reporting relationships between jobs, disturbing authority among jobs, coordinating activities among jobs, and differentiating among positions

strategy formulation

the set of processes involved in creating or determining the organization's strategies -determines what the strategy is

what is the purpose of formal goal setting

to give subordinates a voice

who establishes tactical goals

top and middle managers

overall cost leadership strategy

try to gain a competitive advantage by reducing its costs below the costs of competing firms -by keeping costs low, the organization can sell its products at low prices and still make a profit

what essentially the first step of planning

understanding the environment, then managers must establish the organizations mission

overcoming the barriers

understanding the purposes of goals and planning, communication and participation, consistency, revision, and updating, effective reward system

program

used for large set activities -it could consist of identifying procedures for introducing a new product line, opening a new facility, or changing the organizations mission

reciprocal interdependence

when activities flow both ways between units -most complex

sequential interdependence

when the output of one unit becomes the input for another in sequential fashion -moderate level

mergers

when the two organizations being combined are approximately the same size -purchases of one firm by another firms

area has goals for...

operations, marketing, finance

related diversification

organization operates in several businesses that are somehow linked with one another -basis of relatedness: similar technology, common distribution and marketing skills, common brand name and reputation, common customers -advantages: 1. reduces an organizations dependence on any on of its business activities and thus reduces economic risk 2. by managing several businesses at the same time, an organization can reduce the overhead 3. allows organizations to exploit its strengths and capabilities in more than one business

unrelated diversification

organization operates multiple businesses that are not logically associated with one another -in theory, two advantages 1. should have stable performance over time 2. resource allocation advantages -research shows it does not lead to high performance because, 1. corporate level managers in such a company do not usually know enough about unrelated business to provide strategic guidance or to allocate capital appropriately 2. organizations that implement unrelated diversification fail to exploit important synergies, they are at a competitive disadvantage compared to those who use related diversification

Forward vertical integration

organization that stops selling to one customer and sells instead to that customer's customer

Job characteristics approach

suggests that jobs should be diagnosed and improved along five core dimensions, taking into account both the work system and employee preferences 1. skill variety: the number of things a person does 2. task identity: the extent to which the worker does a complete or identifiable portion of total job 3. task significance: perceived importance of task 4. autonomy: degree of control the worker has over how the work is performed 5. feedback: extent to which the worker knows how well the job is being performed

decision making

the act of choosing one alternative from a set of alternatives

administrative intensity

the degree to which managerial positions are concentrated in staff positions

Job Specialization

the degree to which the overall task of the organization is broken down and divided into smaller component parts -evolved from "divison of labor"

contingency planning

the determination of alternative courses of action to be taken if an intended plan is unexpectedly disrupted or rendered inappropriate

job design

the determination of an individual's work-related responsibilities

what are the most important strategic issues at corporate level concerned with

the extent and nature of organizational diversification

advantages to group/ team decision making

- More information and knowledge are available. - More alternatives are likely to be generated. - More acceptance of the final decision is likely. - Enhanced communication of the decision may result. - Better decisions generally emerge.

disadvantages to group/team decision making

- The process takes longer than individual decision making, so it is costlier. - Compromise decisions resulting from indecisiveness may emerge. - One person may dominate the group. - Groupthink may occur

strategy implementation

the methods by which strategies are operationalized or executed within the organization -focuses how the strategy is achieved

staff managers

-advise and assist -staff authority is less concrete and may take a variety of forms

staff authority

-advise authority >even when advice is sought, the line manager can choose whether or not to ignore it

most businesses develop two distinct levels of strategies

-business level strategy: the set of strategic alternatives to which an organization chooses as it conducts business in a particular industry or market -corporate level strategy: the set of strategic alternatives to which an organization chooses as it manages its operations simultaneously across several industries and several markets

ways that some firms become diversified

-by developing their own new products and services within the boundaries of their traditional business operations -by replacing their former suppliers and customers -mergers and acquisitions >organizations engage in these to diversify by vertical integration by acquiring former suppliers and customers

The miles and snow typology

-developed by Raymond miles and Charles snow -suggested strategies fall into four categories: prospector, defender, analyzer, and reactor

the four most common bases for departmentalization

-function -product -customer -location

some of the most useful devices for maintaining coordination among interdependent units are...

-managerial hierarchy: to achieve coordination place one manager in charge of interdependent departments -rules and regulations -liaison roles: manager acting as a common point of contact -task force: the coordination function is thus spread across several individuals, each whole has special information about one of the groups involved -integrating departments: generally has some permanent members as well as members who are assigned temporarily from units that are particularly in need of coordination

Proper execution of tactical plans depend on these factors

-managers need to evaluate every possible course of action in light of the goal intended to reach -next they need to make sure that each decision maker has the information and resources necessary to get the job done -vertical and horizontal communication and integration of activities must be present to minimize conflict and inconsistent activities -finally, the manager must monitor ongoing activities derived from the plan to make sure they are achieving desired goals

implementing porter's generic strategies (overall cost leadership strategy)

-marketing and sales focus simple product attributes and now these product attribute meet customer needs in low cost and effective manner (emphasis on value) -accounting/finance needs costs lower than the competitors, management must reduce costs where possible -manufacturing with large runs of highly standardized products -culture is improving the efficiency of manufacturing, sales, and other business functions

implementing porter's generic strategies (differentiation strategy)

-marketing and sales must emphasize the high quality, high value, image of the organizations products or services -accounting and finance control the flow of funds without discouraging the creativity needed to constantly develop new products and services to meet customer needs -manufacturing must emphasize quality and meeting specific customer needs, rather than simply reducing costs -the culture emphasizes creativity, innovation, and response to customer needs

what are the two types of panning

-single use plan: program and projects -standing plan: policy, standard operating procedure, rules and regulations

problems with delegation

-some managers may be reluctant to delegate -some may worry subordinated will do too well and pose a threat ti their own advancement -some may not trust subordinated to do the job well -some subordinated are reluctant to accept delegation >they perceive there are no rewards for accepting additional responsibility >want to avoid risk

line managers

-work directly toward organizational goals -line authority is generally thought of as the formal or legitimate authority created by organizational hierarchy

negative consequences of job specialization

-workers who perform highly specialized jobs may become bored and dissatisfied -may offer no challenge or stimulation -boredom and monotony set in, absenteeism rises, and quality of work may suffer

SWOT divides organizational strength into two categories

1. Common strength- a skill or capability held by numerous competing firms -competitive parity exists when large numbers of competing firms are able to implement the same strategy 2. distinctive competence- a strength possessed by only a small number of competing firms

Steps in rational decision making

1. Recognize and define the decision situation -some stimulus indicates that a decision must be made. The stimulus may be positive or negative 2. Identify appropriate alternatives -both obvious and creative alternatives are desired 3. Evaluate each alternative in terms of its feasibility, satisfactoriness, and consequences 4. select the best alternative 5. Implement the the chosen alternative 6. Follow up and evaluate the results of the chosen alternative

Benefits of Job Specialization

1. Workers can become proficient at a task 2. Transfer time between tasks is decreased 3. the narrow job definition allows Specialized equipment that can be more easily developed 4. Employee replacement becomes easier and training costs are relatively low

reasons for distinctive competence not imitation

1. acquisitions or development of the distinctive competence may depend on unique historical circumstance that other organization cannot replicate 2. distinctive competence might be difficult to imitate because its nature and character might not be known or understood by competing firms 3. can be difficult to imitate if it is based on complex social phenomena, like organizations teamwork or culture

escalation of commitment

A decision maker's staying with a decision even when it appears to be wrong

Factors that influence the span of management

1. competence of supervisor and subordinates -the greater the competence, the wider the potential span 2. physical dispersion of subordinated -the greater the dispersion, the narrower the potential span 3. extent of nonsupervisory work in the managers job -the more nonsupervisory work, the narrower the potential span 4. degree of required interaction -the less the required interaction, the wider the potential span 5. the extent of standardized procedure -more procedure, wider potential span 6. similarity of tasks being supervised -more similar tasks, wider potential span 7. frequency of new problems -higher the frequency, the narrower the potential span 8. preferences of supervisors and subordinated

how do the best strategies accomplish an organizations missions

1. exploiting an organizations strengths and opportunities 2. neutralizing threats 3. avoiding (or correcting) its weaknesses

five principles of EBM

1. face the hard facts and build a culture in which people are encouraged to tell the truth, even if its unpleasant 2. be committed to "fact based" decision making 3. treat your organization as an unfinished prototype- encourage experimentation 4. look for the risks and drawbacks in what people recommend 5. avoid basing decisions on untested but strongly held beliefs, what you have done in the past, or on uncritical "benchmarking" of what winners do

5 alternatives to specialization

1. job rotation: involves systematically moving employees from one job to another -not very successfully but used today for training -increases flexibility and lower costs 2. Job enlargement: involves giving the employee more tasks to perform -training costs usually increase -unions have argued that pay should increase because the worker is doing more tasks -many cases, the work remains boring and routine 3. job enrichment: involves increasing both the number of tasks and the control the worker has over the job -increases subordinates sense of responsibility -increases employees opportunity and growth 4. job characteristics approach 5. work teams: allows entire group to design the work system it will use to perform an interrelated set o tasks

Time frames for planning

1. long range plan- plan covers many years, perhaps even decades; common are five years or more 2. intermediate plan- covers one to five years -especially important for middle and first line managers -generally parallel tactical plans 3. short range plans- one year or less; two types -action plans: used to operationalize any other kind of plan -reaction plan: developed to react to an unforeseen circumstance

4 action points of contingency planning

1. management develops the basic plans of the organization -they may include strategic, tactical, operational plans 2. the plan that management chooses is put into effect 3. the company specifies certain indicators or signs that suggest that a contingency event is about to take place -as indicators of contingency events are being defined, the contingency plans themselves should also be developed 4. marks the successful completion of with the original or a contingency plans

basic guidelines for developing tactical plans

1. manager needs to recognize that tactical planning must address a number of tactical goal derived from a broader strategic goal 2. tactics must specify resources and time frames 3. tactical planning requires the use of human resources -must be in a position to receive information from others within and outside the organization

three parts of the delegation process

1. managers must assign responsibility or give subordinated a job to fo 2. managers may give subordinated the power to requisition need information from confidential files or to direct a group a other workers 3. managers establish the subordinated accountability

The four basic levels of goals

1. mission- a statement of an organization's fundamental purpose 2. strategic goals-set by and for top management of the organization -focus on broad and general issues 3. tactical goals- set by and for middle management -focus on how to operationalize actions necessary to achieve strategic goals 4. operational goals-set by and for lower level management -concerned with shorter term issues associated with tactical goals

implementing miles and and snows strategies

1. prospector strategy: -organization is innovative, seeks new market opportunities, and takes risks -encourage creativity and flexibility 2. defender strategy -tries to protect its market from new competitor and downplays creativity/innovation -focuses on lowering costs or improving the performance of current products 3. analyzer strategy -tries to maintain its current business and to be somewhat innovative in new business >attributes resemble both prospect and defender >tight accounting and financial control >high flexibility and efficient production >customized products and creativity >low costs

what are the four purposes that goals serve

1. provide guidance and a unified direction for people in the organizations -should reinforce a connection with our mission/ purpose/ values 2. goal setting practices strongly affect other aspects of planning -effective goal setting promotes good planning, and good planning facilitates future goal setting 3. goals can serve as a source of motivation for employees of the organization -goals that are specific and moderately difficult can motivate people to work harder, especially, if attaining the goal is likely to result in reward 4. goals provide an effective mechanism for evaluation and control -performance can be assessed in the future in terms of how successfully today's goals are accomplished

goal setting flow chart

1. starting the formal goal setting program 2. establishment of organizations goals and plans 3. collaborative goal setting and planning 4. communicating organizational goals and plans -meeting, verifiable goals and clear plans, counseling, resources 6. periodic review 7. evaluation

circumstances that exists for the decisions maker are conditions of

1. state of certainty: decision maker knows with reasonable certainty what the alternative are and what conditions are associated with each alternative -few decisions are made here 2. state of risk: a condition in which the availability of each alternative and its potential payoffs and costs are all associated with probability estimates -managers must reasonably estimate the probabilities associated with each alternative 3. state of uncertainty: the decision maker does not know all of the alternatives ,the risks associated with each, or the consequences each alternative is likely to have -managers must acquire as much relevant information as possible and approach the decision with logical and rational perspective -intuition, judgement, experience play major roles

what are the three kinds of organizational plans

1. strategic plans 2. tactical plans 3. operational plans

two important major tools for managing diversification

1. structure technique 2. portfolio technique -method of determining which businesses to engage in and how to manager these businesses to maximize corporate performance -two important types: BCG matrix and GE business screen

Factors that determine which position of centralized or not

1. the organizations external environment -more complexity and uncertainty= decentralized 2. history of the organization 3. the nature of decisions being made -the more costlier and risker= centralized 4. consider the abilities of low level managers -if they aren't qualified to make high quality decisions= centralized

what are the two most important business decisions

1. what is our business (the origins of strategy) 2. The allocation money and people (scarce resources)

bounded rationality

A concept suggesting that decision makers are limited by their values and unconscious reflexes, skills, and habits

GE business screen

A method of evaluating businesses along two dimensions: (1) industry attractiveness and (2) competitive position; in general, the more attractive the industry and the more competitive the position, the more an organization should invest in a business

BCG Matrix

A method of evaluating businesses relative to the growth rate of their market and the organization's share of the market

line position

A position in the direct chain of command that is responsible for the achievement of an organization's goals

organizing

Deciding how best to group organizational activities and resources

Customer Departmentalization

Grouping activities to respond to and interact with specific customers or customer groups -advantage: organizations can use skilled specialists to deal with unique customers/ groups -disadvantage: a fairly large administrative staff is required to integrate activities of various departments

decision making process

Includes recognizing and defining the nature of a decision situation, identifying alternatives, choosing the "best" alternative, and putting it into practice. -"best" implies effectiveness

multidomestic strategy

International strategy in which a company manages itself as a collection of relatively independent operating subsidiaries, each of which focuses on a specific domestic market

Global Strategy

International strategy in which a company views the world as a single marketplace and has as its primary goal the creation of standardized goods and services that will address the needs of customers worldwide

pooled interdependence

When units operate with little interaction; their output is pooled at the organizational level -lowest level

Flat structures

Organizations with few layers, often with large numbers of employees reporting to a single manager. -lead to higher levels of employee morale and productivity -may result in manager having more administrative responsibility and more supervisory responsbility

what is usually the starting point in formulating strategy

SWOT analysis: an acronym that stands for strengths, weaknesses, opportunities, and threats

decentralization

The process of systematically delegating power and authority throughout the organization to middle and lower-level managers -power at lowest chain of command point

centralization

The process of systematically retaining power and authority in the hands of higher-level managers -power and decision making authority are retained at the higher levels of management

satisficing

The tendency to search for alternatives only until one is found that meets some minimum standard of sufficiency

planning staff

can reduce the workload of individual managers, help coordinate the planning activities of individual managers, bring to a particular problem many different tools and techniques, take a broader view than individual managers and go beyond pet projects and particular departments

chain of command

a clear and distinct line of authority among the positions in an organization -two components: 1. unity of command: suggest that each person within an organization must have a clear reporting relationship to one and only one boss 2. the scalar principle: suggest that there must be a clear and unbroken line of authority that extends from the lowest the the hight position in organizations

Backward vertical integration

a company that stops buying supplies from other companies and begins to provide its own supplies

sustained competitive advantage

a competitive advantage that exists after all attempts of strategic imitation have ceased

interacting groups

a decision-making group in which members discuss, argue, and agree upon the best alternative -most common

Delphi groups

a form of group decision making in which a group is used to achieve a consensus of expert opinion -developed by Rand corporation -uses a panel of experts

product life style

a model that shows how sales volume changes over the life of products 1. introduction-demand may be high, sometimes outpacing the firms ability to supply product 2. growth- more firms begin producing the product and sales continue to grow 3. maturity- overall demand growth for a product begins to slow down and the number of firms producing product decline 4. decline- demand for product decreases/technology, number of organizations producing products drops and total sales drop

emergent strategy

a pattern of action that develops over time in an organization in the absence of mission and goals or despite mission and goals -implementing emergent strategies involves allocating resources even though an organization has no explicitly chosen its strategies

Tactical plans

a plan aimed at achieving tactical goals, developed to implement parts of strategic plan -involve upper and middle management -shorter time horizon than strategic and more specific and concrete focus -more concerned with getting things done

deliberate strategy

a plan of action than an organization chooses and implements to support specific goals

classical decision making model

a prescriptive approach that tells managers how they should make decisions -shows our goals -assumes managers are logical and rational and have the vest interest of organization on mind -the model: 1. when faced with a decision, mangers should.... 2. -obtain complete and perfect information -eliminate uncertainty -evaluate everything rationally and logically 3. ....and end up with a decision that best serves the interest of the organization

crisis management

a related concept, is the set of procedures the organization uses in the event of a disaster other unexpected calamity

competitive disadvantage

a situation in which an organization is not implementing valuable strategies that are being implemented by competing organizations

nominal groups

a structured technique designed to generate creative and innovative ideas through the individual contributions of alternatives that are winnowed down through a series of rank-ordering of the alternatives to reach a decision -brought face to face but don't interact

strategic management

a way of approaching business opportunities and challenges; comprehensive and ongoing management process aimed at formulating and implementing effective strategies

who should be involved in the goal-setting process

all managers

organizational threats

an area in the environment and increases the difficulty of an organization's achieving high performance

organizational opportunities

an area in the environment that, if exploited, may generate higher performance

intuition

an innate belief about something without conscious consideration

single product strategy

an organization manufactures just one product or service and sells it in a single geographic market -strength: by concentrating its efforts so completely on one product and market, a firm is likely to be very successful in manufacturing and marketing the product -weakness:if the product is not accepted by the market or is replaced by a new one, the firm will suffer

distinctive competence

an organizations strength possessed by only a small number of competing firms

optimizing

balancing and reconciling possible conflicts among goals

administrative model

behavioral approach that describes how decisions are often actually made -shows our contraints -created by Herbert A. Simon -The model 1. when faced with a decision situation manager actually... 2. -use in-completed imperfect information -are constrained by bounded rationality -tend to sacrifice 3. ... and end up with a decision that may or may not serve the interests of the organizartion

who determines the missions and strategic goals

board of directors and top managers

political forces in decision making are a major element

coalition- an informal alliance of individuals or groups formed to achieve a common goal

strategy

comprehensive plan for accomplishing an organization's goals

focus strategy

concentrates on a specific regional market, product line, or group of buyers -differentiation strategy: firm differentiates its products in a focus market -overall cost leadership focus: firm manufactures and sell its products at low costs in focus market

what is the corner stone of planning

decision making, it underlies every aspect of setting goals and formulating plans

rules and regulations

describe exactly how specific activities are to be carried out

standing plans

developed for activities that recur regularly over a period of time -greatly enhance efficiency by making decisions making routines

single use plans

developed to carry out a course of action that is not likely to be repeated in the future

porter's generic strategies

differentiation, overall cost leadership, or focus strategy

a well conceived strategy addresses what three areas

distinctive competence, scope, and resource deployment

Strategic Business Unit (SBU)

each business or set of businesses within an organization

board of directors

establishes the corporate mission and strategy

risk propensity

extent to which a decision maker is willing to gamble when making a decision -the organizations culture is a prime ingredient in fostering different levels of risk propensity

Product Departmentalization

grouping activities around products or product groups -advantages: 1. all activities associated with on product or product group can be easily integrated 2. the speed and effectiveness of decision making are enhanced 3. the performance of individual products can be assessed more easily, thereby improving accountability -disadvantages 1. managers may focus on their own product to the exclusion of the rest of the organization 2. administrative costs rise because each department must have its own financial specialists

evidence based management (EBM)

management decisions should be based on the best evidence, managers should systematically learn from experience and organizational practices should reflect sound principles of thought and analysis

prospector strategy

firm encourages creativity and flexibility and is often decentralized -oriented toward growth and risk taking

defender strategy

firm focuses on lowering costs and improving the performance of current products -concentrates on protecting current markets, maintaining stable growth, serving current customers

analyzer strategy

firm tries to maintain its current business and to be somewhat innovative in new businesses, combines elements of prospectors and defenders

porters five forces can be used to characterize the extent of opportunity and threat in an organizations environment

firms in these industries typically can achieve only normal economic performance -when five forces are high, but when low have potential for above normal performance

operational plans

focuses on carrying out tactical plans to achieve operational goals -developed by middle and lower management -short term focus and narrow scope

Functional Authority

formal or legitimate authority over activities related to the staff member's specialty

management by objectives

forming goals setting process involving collaboration between managers and subordinates

Strategic plans

general plan outlining decisions of resource allocation, priorities, and action steps necessary to reach strategic goals -set by board of directors and top management -have an extended time horizon -address questions of scope, resource deployment, competitive advantage, and synergy

vertical consistency

goals should be consistent up and down organization- strategic, tactical, and operational goals must agree with one another

time frame has goals are...

long term goals, intermediate goals, and short term goals

Functional Departmentalization

grouping jobs involving the same or similar activities -advantages: 1. each department can be staffed by experts in that functional area 2. supervision is facilitated because an individual manager needs to be familiar with only a relatively narrow set of skills 3. coordinating activities inside each department is easier -disadvantages: 1. decision making tends to become slower and more bureaucratic 2. employees may begin to concentrate too narrowly on their own unit and lose sight of total organization 3. accountability and performance become increasingly difficult to monitor

Location Departmentalization

grouping jobs on the basis of defined geographic sites or areas -advantages: enables organizations to respond easily to unique customer and environmental characteristics in various regions -disadvantages: larger administrative staff required

tall structure

has an overall narrow span and more hierarchical levels -more expensive -fosters more communication problems

planning task force

helps develop plans

resource deployement

how an organization distributes it resource across the areas in which it competes -the choice it makes as to where and how much to invest reflects issues of resource deployment

barriers to goal setting and planning

inappropriate goals, improper reward system, dynamic and complex environment, reluctance to establish goals, resistance to change, constraints

Transnational Strategy

international strategy in which a company attempts to combine the benefits of global scale efficiencies with the benefits and advantages of local responsiveness

home replication strategy

international strategy in which a company uses the core competency or firm-specific advantage it developed at home as its main competitive weapon in the foreign markets that it enters

scope

it specifies the range of markets in which an organization with compete

organizations establish different kinds of goals and in general vary by...

level, area, and time frame

compulsory advice

line manager must consider the advice but can choose to heed it or ignore it.

horizontal consistency

means that goals should be consistent across the organizations, from one department to the next

who is jointly responsible for operational goals

middle and lower managers

reactor strategy

no consistent strategic approach; it drifts with environment events, reacting to but failing to anticipate or influence events

groupthink

occurs when a group's desire for consensus and cohesiveness overwhelms its desire to reach the best possible decision

programmed decision

one that is relatively structured or recurs with some frequency (or both) -many decisions about basic operating systems and procedures and standard organizational transaction are of this variety

what is considered an effective decision

one that optimizes some set of factors, such as profits, sales employee welfare, and market share -in some situations, it could be one that minimizes losses, expenses, or employee turnover

was does tactics primarily focus on

people and action

line management

persons with formal authority and responsibility for the management of organization -they plan an important role in the organization planning process for two reasons: First, they are valuable source of inside information and second, they execute the plans developed by top management

projects

plan of less scope and complexity than a program

chief executive officer

plays a major role in the complete planning process and is responsible for implementing the strategy -most important person in the planning process

staff positions

position intended to provide expertise, advice, and support for line positions

authority

power that has been legitimized by the organization -two specific issues managers address when distributing authority: delegation and decentralization

effective strategies

promotes a superior alignment between the organization and its environment and the achievement of strategic goals

executive committee

provide input to CEO on the proposal that affect their unit

acqusitions

purchase of a firm by a firm that is considerably larger

non-programmed decisions

relatively unstructured and occurs much less often -intuition and experience are major factors -most decisions made by top management involving strategy and organization design -also decisions about new facilitates, new products, labor contracts, and legal issues

differentiation strategy

seeks to distinguish itself from competitors through the quality of its products or services -firms that do this successfully can change more than competitors because willing to pay more

organizational weakness

skills and capabilities that do not enable an organization to choose and implement strategies that support its mission

organizational strengths

skills and capabilities that enable an organization to conceive of and implement strategies -such as, managerial talent, surplus capital, a unique reputation/brand name and a well established distribution channels

policies

specifies the organization's general response to a designated problem or situation