Quiz 1 Business Policy and Strategy

Chaos

Low and Low Top management and board of directors, both do not control/decide

What are the four phases of strategic managment

Basic Financial planning, forecast-based planning, externally oriented planning, and strategic management

Agency Theory

agents not willing to bear responsibility unless substantial amount of stick, protect ownership, risk adverse, external

What is strategic management?

communicate with lower-level managers for input

Corporate Governance

determine direction and performance of corporation

objective

end results of planned activity

What is the strategic management process

environmental scanning, strategy formulation, strategy implementation, evaluation and control

Evaluate and Influence

examine ideas and offer suggestions

Initiate and Determine

examine ideas and offer suggestions

outside directors

executives of other firms but are not employees of the board's corporation (80%)

Marionette

high board of directors low top management, board directs managers

Partnership

high top management high board of directors, work together

Stewardship Theory

insiders tend to identify with corporation

Strategy formulation

investigation, analysis, and decision making that provides criteria to attain competitive advantage

Environmental scanning

monitor, evaluate, disseminating information from internal and external environments that assist analysis of corporation

inside directors

officers or executives employed by the corporation

Vision

organization would like to become

minitor

know developments inside/outside the corporation

Mission

purpose or reason for organization existence

strategic implementation

put into action through development of program budgets and procedures

What is forecast-based planning

propose five year plans

What is financial planning

propose next year's budget

evaluation and control

results are monitored and compared with desired performance

What is Externally oriented planning

strategic planning system

Codetermination

Form of corporate governance that requires a typical management board and a supervisory board and that allows management and employees to participate in strategic decision making.

Board of Directors responsibilities

1. Effective board leadership including the processes, makeup and output of the board 2. Strategy of the organization 3. Risk vs. initiative and the overall risk profile of the organization 4. Succession planning for the board and top management team 5. Sustainability

Enterpreneurship

High top management low board of directors, make decisions on own