MBA 705 MINSUN KIM EXAM 1 FULL REVISION
NOTES WITH CORE BUSINESS STRATEGY
CONCEPTS AND FRAMEWORKS
◉ Five Characteristics of a Successful Strategy.
Answer: 1. Understand the competitive environment.
2. Understand how resources translate into strengths and
weaknesses.
3. The strategy is consistent with the mission and goals of the
organization.
4. Plans for putting the strategy into action are designed before it is
implemented.
5. Possible future changes (i.e., strategic control) are evaluated
before the strategy is adopted.
◉ Intended Strategy.
Answer: what management originally plans.
may be realized just as it was planned, in a modified form, or even in
an entirely different form.
◉ Realized Strategy.
,Answer: what management actually implements.
Hence, the original strategy may be realized with desirable or
undesirable results, or it may be modified as changes in the firm or
the environment become known.
◉ Gap between Intended and Realized.
Answer: The gap between the intended and realized strategies
usually results from unforeseen environmental or organizational
events, better information that was not available when the strategy
was formulated, or an improvement in top management's ability to
assess its environment. Although it is important for managers to
formulate responsible strategies based on a realistic and thorough
assessment of the firm and its environment, things invariably change
along the way. Hence, it is common for such a gap to exist, creating
the need for constant strategic action if a firm is to stay on course.
Instead of resisting modest strategic changes when new information
is discovered, managers should search for new information and be
willing to make such changes when necessary. This activity is part of
strategic control —the final step in the strategic management
process.
◉ Strategy as an Art.
Answer: The lack of environmental predictability and the fast pace
of change render elaborate strategy planning as suspect at best.
,Strategic managers should emphasize creativity and innovation.
Strategies should be developed like a potter molds clay.
◉ Strategy as a Science.
Answer: The scientific approach is the most widely recognized view
of strategy.
Strategic managers are encouraged to systematically assess the
firm's external environment and evaluate the pros and cons of
myriad alternatives before formulating strategy.
The scientific approach is more prominent in this text.
◉ Influence on Strategic Management.
Answer: Industrial Organization: a branch of microeconomics,
emphasizes the influence of the industry environment on the firm.
Resource-based theory:views performance primarily as a function of
a firm's ability to utilize its resources and emphasize the
development of a distinctive competence.
, Contingency theory: represents a middle ground perspective that
views organizational performance as the joint outcome of
environmental forces and the firm's strategic actions.
◉ Corporate Governance.
Answer: refers to the board of directors, institutional investors (e.g.,
pension and retirement funds, mutual funds, banks, insurance
companies, among other money managers), and large shareholders
known as blockholders who monitor firm strategies to ensure
effective management.
Strategic decisions are typically made by the owners in small
privately held firms. It's much more complicated in large
corporations.
◉ Board of Directors.
Answer: Boards consist of officials elected by shareholders who are
responsible for monitoring activities in the organization. Boards are
responsible for:
1. Evaluating top management's strategic proposals.
2. Establishing broad direction for the firm
3. Selecting and determining the compensation for the chief
executive
◉ Criticisms of Boards.
NOTES WITH CORE BUSINESS STRATEGY
CONCEPTS AND FRAMEWORKS
◉ Five Characteristics of a Successful Strategy.
Answer: 1. Understand the competitive environment.
2. Understand how resources translate into strengths and
weaknesses.
3. The strategy is consistent with the mission and goals of the
organization.
4. Plans for putting the strategy into action are designed before it is
implemented.
5. Possible future changes (i.e., strategic control) are evaluated
before the strategy is adopted.
◉ Intended Strategy.
Answer: what management originally plans.
may be realized just as it was planned, in a modified form, or even in
an entirely different form.
◉ Realized Strategy.
,Answer: what management actually implements.
Hence, the original strategy may be realized with desirable or
undesirable results, or it may be modified as changes in the firm or
the environment become known.
◉ Gap between Intended and Realized.
Answer: The gap between the intended and realized strategies
usually results from unforeseen environmental or organizational
events, better information that was not available when the strategy
was formulated, or an improvement in top management's ability to
assess its environment. Although it is important for managers to
formulate responsible strategies based on a realistic and thorough
assessment of the firm and its environment, things invariably change
along the way. Hence, it is common for such a gap to exist, creating
the need for constant strategic action if a firm is to stay on course.
Instead of resisting modest strategic changes when new information
is discovered, managers should search for new information and be
willing to make such changes when necessary. This activity is part of
strategic control —the final step in the strategic management
process.
◉ Strategy as an Art.
Answer: The lack of environmental predictability and the fast pace
of change render elaborate strategy planning as suspect at best.
,Strategic managers should emphasize creativity and innovation.
Strategies should be developed like a potter molds clay.
◉ Strategy as a Science.
Answer: The scientific approach is the most widely recognized view
of strategy.
Strategic managers are encouraged to systematically assess the
firm's external environment and evaluate the pros and cons of
myriad alternatives before formulating strategy.
The scientific approach is more prominent in this text.
◉ Influence on Strategic Management.
Answer: Industrial Organization: a branch of microeconomics,
emphasizes the influence of the industry environment on the firm.
Resource-based theory:views performance primarily as a function of
a firm's ability to utilize its resources and emphasize the
development of a distinctive competence.
, Contingency theory: represents a middle ground perspective that
views organizational performance as the joint outcome of
environmental forces and the firm's strategic actions.
◉ Corporate Governance.
Answer: refers to the board of directors, institutional investors (e.g.,
pension and retirement funds, mutual funds, banks, insurance
companies, among other money managers), and large shareholders
known as blockholders who monitor firm strategies to ensure
effective management.
Strategic decisions are typically made by the owners in small
privately held firms. It's much more complicated in large
corporations.
◉ Board of Directors.
Answer: Boards consist of officials elected by shareholders who are
responsible for monitoring activities in the organization. Boards are
responsible for:
1. Evaluating top management's strategic proposals.
2. Establishing broad direction for the firm
3. Selecting and determining the compensation for the chief
executive
◉ Criticisms of Boards.
