Chapter 2 Strategic Management
false
true/false most organization have formal visions that employees embrace
makes aspirations clear, inspires employees to improve performance
two characteristics of good visions
performance measures, performance referents
two important aspects of organizational performance
capture organization's identity, answer question of who we are, explain what role company plays in society to gain support of stakeholders
two things that mission statement tries to do?
keeps managers from just focusing on financial measures-provides balanced view of difference measures that are important for understanding organizational activities that lead to sustained, long term performance
advantage of balanced scorecard
triple bottom line
approach to assessing performance that emphasizes social responsibility, environmental sustainability, and profit ex-Starbucks tries to be profitable, purchase coffee beans from farmers who work under humane conditions, and establish greener retail stores
organizational performance because you need to know how well the organization is performing to determine what strategic changes should be made
assessing ___________ _____________ is really important part of strategic management. why?
number of new skills employees learn each year ex-Starbucks encourages employees to learn new skills through tuition reimbursement. helps reward/retain high achieving employees
couple examples of learning and growth measures
no rare, not organized
competitive disadvantage resource?
rare, organized
competitive parity resource?
profit
difference between average cost and average price represents what
customer value
difference between average price and what customers are willing to pay represents what
referents
financial measures need to be coupled with
be aligned across elements of value chain
firms need to do what to exploit sources of competitive advantage
inspiring employees to work hard to improve organizational performance
important ability for CEOs
vision looks to future, mission statement captures key parts of company's past and present
key difference between vision and mission statement
balanced scorecard
main way to help organize performance measures
target employees' efforts in the same direction
mission statement and vision should do what
goals
narrower aims that should provide clear and tangible guidance to employees as they perform their work on a daily basis
goals
organizations create _______ to work toward achieving their missions and visions
performance referents ex- comparing profit margins to margins of entire industry and rivals
part of assessing organizational performance benchmark used to make sense of an organization's standing along a performance measure
performance measures, understand how well organization is competing in the market
part of assessing organizational performance metrics along which the organization can be gauged>helps organization understand what? ex-profits, stock prices, sales
measures of performance that look at effectiveness and profits how shareholders view the company ex-financial ratios, profits, stock price
part of balanced scorecard what are financial measures, what question does it answer?
relate to organizational efficiency helps answer ? of what company needs to excel at ex-time it takes to manufacture good or deliver service, time it takes to create a good + bring to market DECREASE ORDER fulfillment time
part of balanced scorecard what are internal business process measures? what ? do they answer?
provide insight into whether company can continue to improve and create value, bc companies need to develop new ways to add value as organisation continues to adapt to changing environment
part of balanced scorecard what are learning and growth measures? why is it important?
relate to customer attraction, satisfaction, and retention provide insight into how customers see the company ex-number of new customers, % of repeat customers
part of balanced scorecard what are customer measures? what ? do they answer
warehouse, purchasing department
some example of inbound logistics resources?
warehouse, refrigeration, dining room, menu, staff
some examples of marketing and sales/service resources?
equipment, personnel to make it, quality control, finished goods warehouse
some examples of operations resources?
trucks, delivery personnel, salesforce, warehouse to store inventory
some examples of outbound logistics resources?
valuable, rare, organized
temporary competitive advantage resource?
changes and improvements in other areas spending more money in sales and marketing by having your finance department save money in other areas of the organization, such as divesting from non-core parts of the business
value chain improvements in one area need to be supported by what ex-?
specific, measurable, aggressive, realistic, time-bound
what are SMART goals?
goals that provide a challenge to the organization but are still obtainable forces company to test limits of their abilities
what are aggressive goals? advantage?
goals that can be quantified ex-if your goal is improve water efficiency by 20%, you easily calculate water efficiency
what are measurable goals
goals that are feasible ex-reducing water efficiency by 20% is difficult, but possible
what are realistic goals
goals that have deadlines. motivating because they help structure work time ex-setting deadline of 2020 for water efficiency goal
what are time-bound goals, why are they helpful
innovation and whether company can continue to improve and create value
what do learning and growth measures focus on?
reason for the organization's existence
what is a mission statement?
how well an organization is doing to reach its vision, mission, and goals
what is organizational performance
approach to assessing organizational performance that focuses on four areas: financial, customer, learning and growth, internal business processes
what is the balanced scorecard? what areas does it look at?
what the organization hopes to become in the future, used by exces to inspire people in organization ex-"to be the best company in the world-in the eyes of customers, shareholders, communities, and people"
what is vision? what is used for?
period after goal is accomplished-will org take on new challenges or rest on laurels?
what period relating to goals is also important
use a variety of measures and referents because they provide different information about an organization's functions ex-liquidity, leverage, profitability, efficiency
what should you do when looking at performance measures and referents? why?
if they are explicit rather than vague, helps make it clear where people should be directing their effort ex-we're going to improve water efficiency by 20%
when are goals specific? why if it helpful?
because employees work just hard enough to reach the goal
why are easily obtainable goals bad?
people get discouraged or just give up
why are impossible goals bad
leave people unsure of what to do
why are vague goals bad?