MGMT 478 Ch.1
One broad skill students can gain by taking this course is
to define and solve problems and make decisions about a particular situation
strategic planning is often incorrectly viewed as
unnecessary
Business strategy is based on the assumption of competition. Upon which assumption is military strategy based?
Conflict
Long-range planning
Deciding on future actions/objectives/policies with the aim to optimize for tomorrow the trends of today; less effective and comprehensive than strategic planning.
Retreats
Formal meetings commonly held off-premises to discuss and update a firm's strategic plan; done away from the work site to encourage more creativity and candor from participants.
Environmental Scanning
Process of conducting research and gathering and assimilating external information; also referred to as external audit.
what element of strategic management answers the question "what do we want to become"?
a vision statement
those organizations that ask "should we reshape our business?" understand the importance of
adapting to change
pitfall of strategic planning
being so formal in planning that flexibility and creativity are stifled
jay conger pointed out that all strategists have to be
chief learning officers
when engaging in strategic planning, which of the following pitfalls did the text suggest a firm should avoid?
failing to communicate the plan to employees
a key to gaining commitment to the organization by managers and employees is_______
participation of all employees in the strategic management process
The focus of strategic management is
the integration of all the functional areas of the business to achieve its organizational objective
Historically, where did strategic planning originate?
the military
the purpose of strategic management is
to gain a sustainable competitive advantage over rivals
Examples of Employability Skills From Using Text
• Critical thinking • Collaboration • Knowledge application and analysis • Business ethics and social responsibility • Information technology • Data literacy
Financial Benefits
• Organizations using strategic-management concepts show significant improvement in sales, profitability, and productivity compared to firms without systematic planning activities • High-performing firms tend to do systematic planning to prepare for future fluctuations in their external and internal environments
during strategic planning, the planning should be delegated to
all key employees
when one company possesses a resource that its rivals want, the first company has gained ______
competitive advantage
the strategic management process begins with
strategy formulation
Internal weaknesses
An organization's controllable activities that are performed especially poorly, such as in areas that include finance, marketing, management, accounting, and MIS, across a firm's products/regions/stores/facilities.
analytical thinking and intuitive thinking
complement each other
One specific skill students can gain from this course is
formulating strategies using a SWOT analysis
Alfred Sloan described Will Durant of GM as an individual who was "astoundingly correct" in his judgement due to ________
intuition
Which of the following is NOT a pitfall of strategic planning?
Involving key employees in all phases of planning
Long-term objectives
Specific results that an organization seeks to achieve (in more than one year) in pursuing its basic vision/mission/strategy. - long-term means more than one year - should be challenging, measurable, consistent, reasonable, and clear
apples financially lean position with regard to manufacturing facilities provides the firm with a ____ over sony, which invest heavily in manufacturing facilities.
competitive advantage
Annual Objectives
Short-term milestones that organizations must achieve to reach long-term objectives. - should be measurable, quantitative, challenging, realistic, consistent, and prioritized - should be established at the corporate, divisional, and functional levels in a large organization
Empowerment
The act of strengthening employees' sense of shared ownership by encouraging them to participate in decision making and rewarding them for doing so.
which of the following is considered in the strategy implementation stage?
creating an effective organizational structure
some firms view planning as a waste of time because
no product or service is produced
Which of the following statements is true?
There is one right way to do strategic planning
Warby parker's founders hated paying $500 or more for eyeglasses and knew the eyeglass market was dominated by a few multinational companies. when they developed their $95 strategy for eyeglasses and accompanying technology solution as well as a strategy for providing eyeglasses for those in need they were
establishing their competitive advantage
the logical starting point for strategic management is to
identify the existing vision, mission, objectives and strategies
which of the following best defines the most effective basis for strategic decision making in firms?
integrating intuition and analysis
strategic decision making can benefit from integrating analysis and _______ by _________
intuition
the strategic management process can be described as an objective, logical, systematic approach for making major decisions in an organization. however it is generally recognized that _______ is essential to making good strategic decisions
intuition
What is the primary benefit for professors when students use the Excel student template
it makes interacting with students easier
What is the primary benefit for students of using the Excel student template
it takes the mechanics, such as drawing circles and multiplying weights by ratings out of the project
which of the following is not considered a benefit of strategic management?
more reactive shaping of the organizations future
Even when students use the Excel student template, they must do the ______ in preparing a strategic plan
research and thinking
a company's game plan is its
strategic plan
what is the final stage in strategic management
strategy evaluation
which of the following is a reason some firms do not engage in strategic planning?
they receive no formal training in strategic management
comparing business and military strategy
• A fundamental difference between military and business strategy is that business strategy is formulated, implemented, and evaluated with an assumption of competition, whereas military strategy is based on an assumption of conflict • Both business and military organizations must adapt to change and constantly improve to be successful
Some opportunities and threats
• Consumers' expectation for green operations and products is rising 8 percent annually in Western Europe. • Internet marketing is growing 11 percent annually in the United States. • Commodity food prices rose 6 percent the prior year. • Oil and gas prices declined 18 percent in the last twelve months. • Computer hacker problems are increasing 14 percent annually.
Internal strengths
An organization's controllable activities that are performed especially well, such as in areas that include finance, marketing, management, accounting, and MIS, across a firm's products/regions/stores/facilities.
The Excel strategic planning template includes all the following analyses EXCEPT
Benchmarking
what is the first step of strategic planning
Develop a clear vision and mission statement
What analysis is included in the Excel student template that aims to assist students in determining the extent that debt versus equity should be used to finance a set of recommendations
EPS-EBIT analysis
External opportunities
Economic, social, cultural, demographic, environmental, political, legal, governmental, technological, and competitive trends/events/facts that could significantly benefit an organization in the future.
Strategy formulation
Stage 1 in the strategic-management process; includes developing a vision/mission, identifying an organization's external opportunities/threats, determining internal strengths/weaknesses, establishing long-term objectives, generating alternative strategies, and choosing particular strategies to pursue. Decisions • What new businesses to enter • What businesses to abandon • Whether to expand operations or diversify • Whether to enter international markets • Whether to merge or form a joint venture • How to avoid a hostile takeover
Strategic Management process
The process of formulating, implementing, and evaluating strategies as revealed in the comprehensive model, that begins with vision/mission development and ends with strategy evaluation and feedback.
Intuition
Using one's cognition without evident rational thought or analysis; based on past experience, judgment, and feelings; essential to making good strategic decisions but must not be relied on heavily in lieu of objective analysis.
three primary intrinsic benefits of strategic planning include
enhanced communication, deeper understanding, and greater commitment
both business and military organizations use their own strengths to
exploit competitors weaknesses
_______ is/are the specific results that a firm seeks to achieve in pursuing its basic mission.
long term objectives
one benefit of strategic planning is that it allows a firm to be _____ in shaping its own future
proactive
Nonfinancial benefits
• Enhanced awareness of external threats • Improved understanding of competitors' strategies • Increased employee productivity • Reduced resistance to change • Clearer understanding of performance-reward relationships
Why some firms do no strategic planning
• No formal training in strategic management • No understanding of or appreciation for the benefits of planning • No monetary rewards for doing planning • No punishment for not planning • Too busy "firefighting" (resolving internal crises) to plan ahead • View planning as a waste of time, since no product/service is made • Laziness; effective planning takes time and effort; time is money • Content with current success; failure to realize that success today is no guarantee for success tomorrow • Overconfidence • Prior bad experience with strategic planning done sometime/somewhere
Excerpts from Sun Tzu's The Art of War Writings
• Strategic planning is a matter of vital importance to the state: a matter of life or death, the road either to survival or ruin. Hence, it is imperative that it be studied thoroughly • Know your enemy and know yourself, and in a hundred battles you will never be defeated • Skillful leaders do not let a strategy inhibit creative counter - movement
Sustained competitive advantage
Maintaining what a firm does especially well, compared to rival firmsby (1) continually adapting to changes in external trends and events and internal capabilities, competencies, and resources; and (2) effectively formulating, implementing, and evaluating strategies that capitalize upon those factors.
Strategy evaluation
Economic, social, cultural, demographic, environmental, political, legal, governmental, technological, and competitive trends/events/facts that could significantly harm an organization in the future. - Determining which strategies are not working well - Three fundamental activities: reviewing external and internal factors that are the bases for current strategies measuring performance taking corrective actions
Benefits of strategic management
• Strategic management allows an organization to be more proactive than reactive in shaping its own future; • It allows an organization to initiate and influence (rather than just respond to) activities-and thus to exert control over its own destiny.
Vision Statement
A one-sentence statement that answers the question, "What do we want to become?"
business strategy has its roots in
military strategy
External threats
Economic, social, cultural, demographic, environmental, political, legal, governmental, technological, and competitive trends/events/facts that could significantly harm an organization in the future.
Who is showcased in the video as being a great strategic planner?
Alexander the Great
Mission Statement
An enduring statement of purpose that distinguish one business from other similar firms; a statement that identifies the scope of a firm's operations in product and market terms and addresses the question "What is our business?" A declaration of an organization's "reason for being."
Competitive Advantage
Anything a firm does especially well, compared to rival firms. For example, when a firm can do something that rival firms cannot do, or owns something that rival firms desire, that can represent a competitive advantage. • A firm must strive to achieve sustained competitive advantage
Policies
The means by which annual objectives will be achieved. Policies include guidelines, rules, and procedures established to support efforts to achieve stated objectives. Policies are guides to decision making and address repetitive or recurring situations.
Strategies
The means by which long-term objectives will be achieved. Business strategies may include geographic expansion, diversification, acquisition, product development, market penetration, retrenchment, divestiture, liquidation, and joint ventures.
which of the following is performed in the strategy formulation stage of the strategic management process?
developing a vision and a mission
Strategic Management Model
A framework or illustration of the strategic-management process; a clear and practical approach for formulating, implementing, and evaluating strategies. • Where are we now? • Where do we want to go? • How are we going to get there? Stages • Strategy formulation • Strategy implementation • Strategy evaluation
What are the three stages in doing strategic planning
Formulation, Implementation, evaluation
Strategy implementation
Stage 2 of the strategic-management process. Activities include establishing annual objectives, devising policies, motivating employees, allocating resources, developing a strategy-supportive culture, creating an effective organizational structure, redirecting marketing efforts, preparing budgets, developing and utilizing information systems, and linking employee compensation to organizational performance. - requires a firm to establish annual objectives, devise policies, motivate employees, and allocate resources so that formulated strategies can be executed - often called the action stage
Strategic Management
The art and science of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives. is used synonymously with the term strategic planning in this course. • Sometimes the term strategic management is used to refer to strategy formulation, implementation, and evaluation, with strategic planning referring only to strategy formulation. • A strategic plan is a company's game plan. • A strategic plan results from tough managerial choices among numerous good alternatives, and it signals commitment to specific markets, policies, procedures, and operations.
Strategists
The person(s) responsible for formulating and implementing a firm's strategic plan, including the CEO, president, owner of a business, head coach, governor, chancellor, and/or the top management team in a firm. - Help an organization gather, analyze, and organize information
Strategic planning
The process of formulating an organization's game plan; in a corporate setting, this term may refer to the whole strategic-management process.
which stage of the strategic management process is referred to as the action stage?
strategy implementation
Pitfalls in strategic planning
Using strategic planning to gain control over decisions and resources Doing strategic planning only to satisfy accreditation or regulatory requirements Too hastily moving from mission development to strategy formulation Failing to communicate the plan to employees, who continue working in the dark Top managers making many intuitive decisions that conflict with the formal plan Top managers not actively supporting the strategic-planning process Failing to use plans as a standard for measuring performance Delegating planning to a "planner" rather than involving all managers Failing to involve key employees in all phases of planning Failing to create a collaborative climate supportive of change • Viewing planning as unnecessary or unimportant • Viewing planning activities as silos comprised of independent parts • Becoming so engrossed in current problems that insufficient or no planning is done • Being so formal in planning that flexibility and creativity are stifled
the strategic management course at many colleges and universities
is the capstone in the course in business administration
Alexander the Great demonstrated that
an excellent strategic plan is crucial to succeed
Strategists include all of the following except
assembly-line employees
which of the following is considered a nonfinancial benefit of strategic management?
improved awareness of external threats
which of the following is not cited as a nonfinancial benefit of using strategic management?
increased discipline
When Warby parker's founders formulated, implemented, and evaluated cross-functional decisions that enable them to meet their organizational objectives of providing less expensive eyeglasses, they engaged in
strategic management
At first, Warby Parker sold eyeglasses online; then it sold eyeglasses with a virtual try-on option. Finally, it offered a try on at home approach. Each of these changes were precipitated by the founders engaging in which of the following?
strategy evaluation
Warby Parker established a vision and mission that included selling at lower price points than other sources and helping those who could not afford lower price points. This process was part of the company's exercise in
strategy formulation
in which stage of the strategic management process is an organization likely to develop a mission statement
strategy formulation
Warby Parker underwent as it devised policies, motivated employees, and allocated resources so that formulated strategies could be executed efficiently
strategy implementation
which of the following best defines strategic management
the art and science of formulating, implementing, and evaluating cross-functional decisions to achieve the organization's objectives
