ADMS4900 Midterm Review Sheet York University ADMS 4900

ADMS 4900 Midterm Review Chapter 1 An Overview Strategic Management Analyses, decisions and actions organizations undertake to create and sustain competitive advantages. Four Key Attributes of Strategic Management: 1) directs the organization towards overall goals and objectives 2) includes multiple stakeholders in decision making 3) incorporates both short-term and long-term perspectives 4) recognizes trade-offs between efficiency and effectiveness Strategic Management Process (Not in sequential fashion) 1) Strategy Analysis - External environment - Internal environment - Intellectual assets 2) Strategy Formulation - Business level: Differentiation, cost leadership, focus - Corporate level: Diversification M&A, join venture, strategic alliance 3) Strategy Implementation Shareholder & Stakeholder: Shareholder: private property and corporate owners maximizing shareholder value Stakeholder: customers, employees, suppliers, community, owners - Zero Sum: stakeholder competes for attention and resources of the organization (one gain = one loss) - Stakeholder symbiosis: stakeholders are dependent on each other for success and wellbeing (mutual benefits) Corporate Social Responsibility Expectation that business or individuals will strive to improve the overall welfare of society. Triple Bottom Line (Incorporate 3 costs) - Financial - Environmental: ecological and material capitals - Social: human and social capitals Organization’s Hierarchy of Goals (Top to bottom) Vision=> Mission=> Objectives=> Departmental objectives and goals Vision: destination that is driven and evokes passion. (broad & enduring) Reasons of vision fail - The walk does not match the talk - Irrelevance - Not the holy grail - Ideal future reconciled with the present - Tunnel Vision Mission: encompasses both purpose of the company and the basis of competition and competitive advantage. (specific & focus=>change when face new threat or opportunity) Audience: employees of organization or departments Strategic Objective: operationalize mission statement (financial & non financial) (more specific & cover more well-defined time frame) SMART Objective - Specific: clear what should be accomplished - Measurable: indicators towards fulfilling objectives - Appropriate: connect and consistent with vision & mission - Realistic: achievable upon company capabilities - Timely: time frame for accomplishing objectives Chapter 2 Analyzing the External Environment General environment, Industry/Competitive Environment General environment: consist of myriad elements that an organization finds outside its own boundaries and which have some bearing on its ability to exist and thrive Industry/ Competitive Environment: composed of a set of firms that produce similar products or services, sell to similar customers, and use similar methods of production. - Supplier perspective: collection of similar producers and firms that employ fairly similar production process - Market perspective: consists of all producers whose products can satisfy similar consumer needs Key to successful strategic management Gather industry information; understand competitive dynamics among different companies in the industry Create Environmentally aware organization Environmental scanning enhance environmental awareness Environmental monitoring => understand surrounding environment Competitive intelligence/ develop forecast about future Environmental Scanning: surveillance of a firm’s external environmental to predict future environmental changes and detect changes already under way Spotting key trend: listen, pay attention, follow trends online Environmental Monitoring: track evolution of environmental trends, sequences of events, or streams of activities Require close monitoring (close ongoing scrutiny) Competitive Intelligence: helps firm better define and understand their industry as well as identify rivals’ strengths and weaknesses. => information, tool, means to deliver reasonable assessments, process Environmental forecasting: involve development of plausible projections about the direction, scope, speed, and intensity of environmental change (purpose: predict change) SWOT Analysis Factors in general/competitive environment Internal condition: Strengths & Weaknesses External condition: Opportunities & Threats General idea of SWOT - build on strengths - remedy the weaknesses or work around them - take advantage f the opportunities - protect firm from threat Limitation: cannot yield environmental forecast, cannot show managers how to achieve a competitive advantage General Environment (Factors benefit one industry may hurt others) 1) Demographic/psychographic - Root of man