Strategic Management Ch6

governance

The act of oversight and direction is referred to as

conservative quadrant

The directional vector may appear in the ____ (upper-left quadrant) of the SPACE Matrix, which implies staying close to the firm's basic competencies and not tak- ing excessive risks.

defensive quadrant

The directional vector may be located in the lower-left or _____ of the SPACE Matrix, which suggests that the firm should focus on rectifying internal weaknesses and avoiding external threats.

champions

They assigned responsibility for major new thrusts to ____, the individuals most

competitive quadrant

the directional vector may be located in the lower-right or ___ of the SPACE Matrix, indicating competitive strategies.

SO Strategies

use a firm's internal strengths to take advantage of external opportuni- ties

Satisfying

—Achieving satisfactory results with an acceptable strategy is far better than failing to achieve optimal results with an unpopular strategy.

Focus on Higher-Order Issues

—By raising an issue to a higher level, many short- term interests can be postponed in favor of long-term interests. For instance, by focusing on issues of survival, the airline and automotive industries were able to persuade unions to make concessions on wage increases.

Question Marks

—Divisions in Quadrant I have a low relative market share position, yet they compete in a high-growth industry.

Cash Cows

—Divisions positioned in Quadrant III have a high relative market share position but compete in a low-growth industry.

Culture

includes the set of shared values, beliefs, attitudes, customs, norms, personalities, heroes, and heroines that describe a firm.

A board of directors

is a group of individuals who are elected by the ownership of a corporation to have oversight and guid-ance over management and who look out for shareholders' interests.

Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix

is an important match- ing tool that helps managers develop four types of strategies: SO (strengths-opportunities) Strategies, WO (weaknesses-opportunities) Strategies, ST (strengths-threats) Strategies, and WT (weaknesses-threats) Strategies

the Grand Strategy Matrix

is based on two evaluative dimensions: competitive position and market (industry) growth.

Relative market share position

is defined as the ratio of a division's own market share (or revenues) in a particular industry to the mar- ket share (or revenues) held by the largest rival firm in that industry.

Strategy

is sometimes defined as the match an organization makes between its internal resources and skills and the opportunities and risks created by its external factors.

Quantitative Strategic Planning Matrix (QSPM),

only one analytical technique in the literature designed to determine the relative attractiveness of feasible alternative actions. This technique objectively indicates which alternative strategies are best.

Internal-External (IE) Matrix

positions an organization's various divisions in a nine- cell display

The Sum Total Attractiveness Scores (STAS)

reveal which strategy is most attractive in each set of alternatives.

ST Strategies

use a firm's strengths to avoid or reduce the impact of external threats.

Equifinality

—It is often possible to achieve similar results using different means or paths. Strategists should recognize that achieving a successful outcome is more important than imposing the method of achieving it. It may be possible to generate new alternatives that give equal results but with far greater potential for gaining commitment.

Stars

—Quadrant II businesses represent the organization's best long-run opportunities for growth and profitability.

Dogs

—Quadrant IV divisions of the organization have a low relative market share position and compete in a slow- or no-market-growth industry;

Generalization

—Shifting focus from specific issues to more general ones may increase strategists' options for gaining organizational commitment.

A "director,"

"one of a group of persons entrusted with the overall direction of a corporate enterprise."

halo error

(the tendency to put too much weight on a single factor)

strategy-formulation framework

All nine techniques included in the ___ require the inte- gration of intuition and analysis.

business portfolio.

Autonomous divisions (or profit centers) of an organization make up what is called a

Input Stage

Called the ____ , Stage 1 summarizes the basic input information needed to formulate strategies

Strategic Position and Action Evaluation (SPACE) Matrix,

Its four-quadrant framework indicates whether aggressive, conservative, defensive, or competitive strategies are most appropriate for a given organization. The axes of the SPACE Matrix represent two internal dimensions (financial position [FP] and competitive position [CP]) and two external dimensions (stability position [SP] and industry position [IP]). These four factors are perhaps the most important determinants of an organization's overall strategic position.

Matching Stage

Stage 2, called the ____, focuses upon generating feasible alternative strategies by aligning key external and internal factors. Stage 2 techniques include the Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix, the Strategic Position and Action Evaluation (SPACE) Matrix, the Boston Consulting Group (BCG) Matrix, the Internal-External (IE) Matrix, and the Grand Strategy Matrix.

Decision Stage

Stage 3, called the _____, involves a single technique, the Quantitative Strategic Planning Matrix (QSPM).

aggressive quadrant

When a firm's directional vector is located in the ___ (upper-right quadrant) of the SPACE Matrix, an organization is in an excellent position to use its internal strengths to (1) take advantage of external opportunities, (2) overcome internal weaknesses, and (3) avoid exter- nal threats.

WO Strategies

aim at improving internal weaknesses by taking advantage of external opportunities. Sometimes key external opportunities exist, but a firm has internal weak- nesses that prevent it from exploiting those opportunities.

Total Attractiveness Scores (TAS)

are defined as the product of multiplying the weights (Step 2) by the Attractiveness Scores (Step 4) in each row.

WT Strategies

are defensive tactics directed at reducing internal weakness and avoid- ing external threats.

The Boston Consulting Group (BCG) Matrix and the Internal-External (IE) Matrix

are designed specifically to enhance a multidivisional firm's efforts to formulate strategies.

Attractiveness Scores (AS)

defined as numerical values that indi- cate the relative attractiveness of each strategy in a given set of alternatives. are determined by examining each key external or inter- nal factor, one at a time, and asking the question "Does this factor affect the choice of strategies being made?" If the answer to this question is yes, then the strategies should be compared relative to that key factor.

Matching

external and internal critical success factors is the key to effectively generating feasible alternative strategies.

directional vector

from the origin of the SPACE Matrix through the new intersection point. This vector reveals the type of strategies recommended for the organization: aggressive, competitive, defensive, or conservative.

Provide Political Access on Important Issues

—Strategy and policy decisions with significant negative consequences for middle managers will motivate intervention behavior from them. If middle managers do not have an opportunity to take a position on such decisions in appropriate political forums, they are capable of successfully resisting the decisions after they are made. Providing such political access provides strategists with information that otherwise might not be available and that could be useful in managing intervention behavior