Ch. 1 - Terms

The final responsibility for forming the organization's mission lies with the _____.

CEO

The _____ & _____ _____ typically develop a firm's mission statement.

CEO; top managers

_____ has become the second-largest economy in the world.

China

Essentially, the _____ _____ has become one of the world's largest markets with 700 million potential consumers.

European Union

_____ has led to higher product quality.

Globalization

_____ _____ refers to the social energy that drives, or fails to drive, the organization, the complex set of ideologies, symbols, and core values that are shared throughout the firm, and what people do when no one else is looking.

Organizational culture

_____ _____ are usually satisfied when companies provide a dynamic, stimulating, and rewarding work environment.

Organizational stakeholders

______ innovation is a term used to describe how rapidly and consistently new, information-intensive technologies replace older ones.

Perpetual

_____ _____ stakeholders include suppliers.

Product market

_____ _____ stakeholders include the firm's customers, and the principal concern of this stakeholder group is obtaining reliable products at the lowest possible price.

Product market

_____ _____ allow strategic leaders to predict the outcomes of their decisions before taking efforts to implement them.

Profit pools

_____ _____ is the most critical criterion for prioritizing the demands of stakeholders.

Relative power

_____ in terms of financial returns reflects an investor's uncertainty about economic gains or losses that will result from a particular investment.

Risk

_____ is an investor's uncertainty about the economic gains or losses that will result from a particular investment.

Risk

_____ _____ is achieved when a firm successfully formulates and implements a value-creating strategy.

Strategic competitiveness

_____ _____ helps avoid too much managerial hubris.

Strategic delegation

_____ _____ are located in different areas and levels.

Strategic leaders

_____ _____, regardless of their location in the organization, often work long hours, and their work is filled with ambiguous decision situations.

Strategic leaders

_____ _____ _____ are returns in excess of what an investor expects to earn from other investments with a similar level of risk.

above average returns

The firm's _____ provide the foundation for choosing one or more ______ and deciding how to implement them.

analyses; strategies

Firms use the five forces model to identify the _____ of the industry as measured by its _____.

attractiveness; profitability

If Southwest Airlines is considering the consequences of videoconferencing on business travel, it is in the profit pool analysis step known as defining the pool's _____.

boundaries

A _____ _____ strategy describes the firm's actions to exploit its competitive advantage over rivals.

business level

A _____ is a capacity for a set of resources to perform a task or an activity in an integrative manner.

capability

Although it closed stores, changed the top management team, and sought potential buyers, none of these actions resulted in outcomes that allowed Circuit City to meet the expectations of its _____ _____ stakeholders.

capital market

Before liquidating, Circuit City took several actions to try to satisfy its _____ _____ stakeholders.

capital market

Dissatisfied _____ _____ stakeholders may sell their stock, tighten loan covenants, and/or seek to increase their power.

capital market

A _____ _____ can be identified only if it has been unsuccessfully challenged by competitors.

competitive advantage

The ability to effectively and efficiently access and use information is an important source of _____ _____ in virtually all industries.

competitive advantage

When resources and capabilities serve as a source of competitive advantage for a firm, the firm has created a(n) _____ _____.

core competence

An organization's willingness to tolerate or encourage unethical behavior is a reflection of its _____ _____.

core values

In a diversified firm, _____ _____ strategy is concerned with determining in which businesses to compete and how resources will be allocated between businesses.

corporate level

A prominent national accounting firm runs television advertisements showing an accountant working alone late in the office on a client's project, while clenching a long-stemmed rose in his teeth and grinning ecstatically. The message of the ad is that this firm's accountants love their work. This ad seeks to convey a sense of the organization's _____ to the viewers.

culture

Apple's iPod and iPad are examples of _____ _____.

disruptive technologies

New markets created by iPods, PDAs, and Wi-Fi are a result of _____ _____.

disruptive technologies

The rate of growth of Internet-based applications could be affected by the possibility of Internet service providers charging users for _____ those applications.

downloading

The I/O model is grounded in _____.

economics

While patents may be an effective way of protecting proprietary technology in some industries such as pharmaceuticals, many firms competing in the _____ industry do not apply for patents.

electronics

Organizational stakeholders include _____.

employees

It is important to emphasize that, primarily because they are related to how a firm interacts with its stakeholders, almost all strategic management process decisions have _____ _____.

ethical dimensions

The _____ _____ model suggests that firms should target the industry with the highest potential for above-average returns and then implement either a cost-leadership strategy or a differentiation strategy.

five forces

The economic interdependence among countries as reflected in the flow of goods, services, financial capital, and knowledge across country borders is defined as _____.

globalization

The Chambers of Commerce of cities and towns often implore citizens to buy from local businesses. This is because the organization's role as a taxpayer is most important to _____ _____ as stakeholders.

host communities

The primary drivers of _____ are the emergence of a global economy and rapid technological change.

hyper-competition

The two primary drivers of _____ are the emergence of the global economy and technology.

hyper-competition

The rate of technology diffusion has been steadily _____ over the last two decades.

increasing

The _____ _____ model argues that the key factor in success is choosing the correct industry in which to compete.

industrial organization (I/O)

The new CEO of Opacity Enterprises is determined to make the long-established firm strategically flexible. The CEO feels that the employees of the company have the ability, training, and resources to engage in continuous learning. The main obstacle the CEO must face is _____.

inertia

The "_____ _____" is the overall risk of participating outside a firm's domestic country when entering global competition.

liability of foreigness

A _____ should establish a firm's individuality and should be inspiring and relevant to all stakeholders.

mission

A firm's _____ is a statement of a firm's business in which it intends to compete and the customers it intends to serve.

mission

Organizational _____ _____ typically do not include statements about profitability and earning above-average returns.

mission statements

Hourly workers on the production line of a chicken-processing plant are considered _____ stakeholders.

organizational

The culmination of the strategic management process is _____.

performance

A company competing in a single _____ _____ has one business-level strategy and one corporate-level strategy.

product market

Generally speaking, _____ _____ stakeholders are satisfied when a firm's profit margin yields the lowest return to capital market stakeholders that is acceptable to them.

product market

Analysis of the industry's _____ _____ enables strategic managers to locate the most promising areas of an industry's value chain.

profit pool

The _____ _____ is the total profits earned in an industry along all points of the value chain.

profit pool

To have the potential to become sources of competitive advantage, resources and capabilities must be non-substitutable, valuable, _____ , and costly to imitate

rare

A major assumption about the strategic management process is that it is _____.

rational

Although McDonald's is competing in an unattractive industry, it has improved its performance by focusing on product innovations and by enhancing existing facilities. This improved performance is best explained by the _____-_____ model.

resource based

The _____ _____ model of the firm argues that resources that are valuable, rare, costly to imitate, and non-substitutable form the basis of a firm's core competencies.

resource based

The _____ _____ view of the firm emphasizes that it is difficult to develop and sustain a competitive advantage based on resources alone.

resource based

The uniqueness of a firm's _____ and _____ is the basis for a firm's strategy and determines its ability to earn above-average returns under the I/O view.

resources; capabilities

In smaller, new venture firms, _____ are sometimes measured in terms of the amount of speed and growth

returns

Capital market stakeholders include _____.

shareholders

The interests of an organization's stakeholders often conflict, and the organization must prioritize its stakeholders if it cannot satisfy them all. The is the most critical criterion in prioritizing _____.

stakeholders

A firm has achieved _____ _____ when it successfully formulates and implements a value-creating strategy.

strategic competitiveness

In order to cope with hyper-competition, firms need to develop _____ _____ through continuous learning.

strategic flexibility

Six years ago, Colette Smith founded a successful catering company that specializes in providing a wide assortment of miniature cheesecakes for corporate and social events. Although Ms. Smith is no longer active in the actual production of the cheesecakes, she continues as president of the catering company. Ms. Smith could be considered a _____ _____ of this firm.

strategic leader

The _____ _____ work is characterized by ambiguous decision situations which make effective decisions difficult to determine.

strategic leader's

Effective _____ _____ are willing to be brutally honest.

strategic leaders

Successful _____ _____ are committed to helping the firm create value for all stakeholder groups, committed to nurturing those around them, and decisive.

strategic leaders

The _____ _____ process is the full set of commitments, decisions, and actions required for the firm to achieve above-average returns and strategic competitiveness.

strategic management

The _____ _____ process is the full set of commitments, decisions, and actions required for the firm to achieve above-average returns and strategic competitiveness.

strategic management

Strategic leaders must have a strong _____ _____ while embracing change in the dynamic competitive landscape.

strategic orientation

A ______ is an integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage.

strategy

If McDonald's is considering growing potatoes, the step of the profit pool analysis is the one that estimates the size of the _____ _____ activity in the pool.

value chain

An effective _____ stretches and challenges people and can result in increased innovation as illustrated by Apple's CEO Steve Jobs, who was known to think bigger and differently than most people ("putting a dent in the universe").

vision

The Princeton Alliance Church states in its website that "PAC exists to help you live life to the fullest by knowing God, developing community and bringing hope." This pronouncement is most precisely a statement of organizational _____.

vision