COB 487 EXAM 1 QUESTIONS & ANSWERS
What is Strategic Management? - examines how actions and events involving top
executives, firms, and industries influence a firm's success or failure.
- mastering strategy is therefore part art and part science
Defining Strategy: The Five Ps described by Henry Mintzberg - It can be viewed as a:
- plan
- ploy
- position
- pattern
- perspective
Plan - a carefully crafted set of steps that a firm intends to follow in order to be
successful
- strategic plans are the essence of strategy
- "Because the landscape of business changes rapidly, other ways of thinking about
strategy are
needed."
- 95% when talking about strategy
Plan: Business Model - - a business model should be a central element of a firm's
strategic plan
- it describes the process through which a firm hopes to earn profits
- important aspect: providing customers with a good or service more cheaply than they
can create it themselves.
Ploy - a specific move designed to outwit or trick competitors
- often involve using creativity to enhance success
- strategy as misdirection, ex: release ambiguous info (Apple is popular for this)
- don't want to mislead shareholders
Pattern - the degree of consistency in a firm's strategic actions - What you do? - How
you respond?
Position - - a firm's place in the industry relative to its competitors
- How you position your product/firm relative to other competitors?
- firms can carve out a position by performing certain activities in a different manner
than their rivals
- deciding what a firm is not going to do is just as important to strategy as deciding what
it is going to do
- sometimes firms change positions which can be a risky move
,Perspective - -working on the mindsets of stakeholders (customers, employees,
stockholders, suppliers) - convincing them to favor the company - how executives
interpret the competitive landscape around them
- some strategists are willing to take a seemingly sour situation and see the potential
sweetness, while other executives remain fixated on the sourness
- Executives who adopt unique and positive perspectives can lead firms to find and
exploit opportunities
that others simply miss.
When an organization's environment is stable and predictable, strategic planning can
provide
enough of a strategy for the organization to gain and maintain success, - however only
a few executives experience that.
Intended and Emergent Strategies -
Intended strategy - the strategy that an organization hopes to execute
- usually described in detail within an org.'s strategic plan
Business plan: - when a strategic plan is created for a new venture
Emergent strategy - an unplanned strategy that arises in response to unexpected
opportunities and challenges
- sometimes they result in disasters or tremendous success
Realized Strategy - the strategy that an org. actually follows
- a product of a firm's intended strategy (what the firm planned to do), the firm's
deliberate strategy (the parts of the intended strategy that the firm continues to pursue
over time), and its emergent strategy (what the firm did in reaction to unexpected
opportunities and challenges).
Nonrealized strategy - refers to the abandoned parts of the intended strategy
The History of Strategic Management -
Strategy in Ancient Times - - Moses led fellow Hebrews out of enslavement in Egypt by
delegating authority to other leaders who oversaw a group of people
- Similarly, the demands of
strategic management today are simply too much for a chief executive officer (the top
leader of a
company) to handle alone. Many important tasks are thus entrusted to vice presidents
and other
executives.
Ancient China: Sun Tzu - - believed winning a battle without fighting is
the best way to win
, Most famous example of strategy in ancient times: Trojan horse - Greek soldiers offered
the horse to the Trojans as a gift - soldiers were hidden inside, led to a Greek victory
- Trojan horse refers to gestures that appear on the surface to
be beneficial to the recipient but that mask a sinister intent
King Arthur and his Knights of the Round Table - - Arthur allegedly considered himself
and each of his
knights to have an equal say in plotting the group's strategy
- demonstrated importance of a central mission
to guide organizational strategy and actions
Lessons offered by Military Strategy - - Machiavelli's "The Prince" offers clever recipes
for
success to government leaders -- quite devious
- American Revolution - demonstrated potential value of strategic alliances (help from
French navy)
- Civil War -- the Union possessed greater resources, such as factories and railroad
lines although Confederacy had better generals --> therefore, sometimes good
strategies simply cannot overcome a stronger adversary
An important lesson of history - Do not make assumptions about what your adversary
can and cannot do. - Executives who make similar assumptions about their competitors
put their organizations'
performance in jeopardy.
Frederick W. Taylor - published "The Principles of Scientific
Management"
- stressed how organizations could become more efficient through identifying the "one
best way" of
performing important tasks
- Although many later works disputed the merits of trying to
find the "one best way," Taylor's emphasis on maximizing organizational performance
became the core
concern of strategic management as the field developed.
Ethics - - Attention to the need for
executives to act ethically when creating strategies increased dramatically in the early
2000s when a series
of companies such as Enron Corporation, WorldCom, Tyco, Qwest, and Global
Crossing were found to
have grossly exaggerated the strength of their performance.
- Like ethics, the implications of international competition are of central interest to
strategic management.
Understanding the Strategic Management Process -
What is Strategic Management? - examines how actions and events involving top
executives, firms, and industries influence a firm's success or failure.
- mastering strategy is therefore part art and part science
Defining Strategy: The Five Ps described by Henry Mintzberg - It can be viewed as a:
- plan
- ploy
- position
- pattern
- perspective
Plan - a carefully crafted set of steps that a firm intends to follow in order to be
successful
- strategic plans are the essence of strategy
- "Because the landscape of business changes rapidly, other ways of thinking about
strategy are
needed."
- 95% when talking about strategy
Plan: Business Model - - a business model should be a central element of a firm's
strategic plan
- it describes the process through which a firm hopes to earn profits
- important aspect: providing customers with a good or service more cheaply than they
can create it themselves.
Ploy - a specific move designed to outwit or trick competitors
- often involve using creativity to enhance success
- strategy as misdirection, ex: release ambiguous info (Apple is popular for this)
- don't want to mislead shareholders
Pattern - the degree of consistency in a firm's strategic actions - What you do? - How
you respond?
Position - - a firm's place in the industry relative to its competitors
- How you position your product/firm relative to other competitors?
- firms can carve out a position by performing certain activities in a different manner
than their rivals
- deciding what a firm is not going to do is just as important to strategy as deciding what
it is going to do
- sometimes firms change positions which can be a risky move
,Perspective - -working on the mindsets of stakeholders (customers, employees,
stockholders, suppliers) - convincing them to favor the company - how executives
interpret the competitive landscape around them
- some strategists are willing to take a seemingly sour situation and see the potential
sweetness, while other executives remain fixated on the sourness
- Executives who adopt unique and positive perspectives can lead firms to find and
exploit opportunities
that others simply miss.
When an organization's environment is stable and predictable, strategic planning can
provide
enough of a strategy for the organization to gain and maintain success, - however only
a few executives experience that.
Intended and Emergent Strategies -
Intended strategy - the strategy that an organization hopes to execute
- usually described in detail within an org.'s strategic plan
Business plan: - when a strategic plan is created for a new venture
Emergent strategy - an unplanned strategy that arises in response to unexpected
opportunities and challenges
- sometimes they result in disasters or tremendous success
Realized Strategy - the strategy that an org. actually follows
- a product of a firm's intended strategy (what the firm planned to do), the firm's
deliberate strategy (the parts of the intended strategy that the firm continues to pursue
over time), and its emergent strategy (what the firm did in reaction to unexpected
opportunities and challenges).
Nonrealized strategy - refers to the abandoned parts of the intended strategy
The History of Strategic Management -
Strategy in Ancient Times - - Moses led fellow Hebrews out of enslavement in Egypt by
delegating authority to other leaders who oversaw a group of people
- Similarly, the demands of
strategic management today are simply too much for a chief executive officer (the top
leader of a
company) to handle alone. Many important tasks are thus entrusted to vice presidents
and other
executives.
Ancient China: Sun Tzu - - believed winning a battle without fighting is
the best way to win
, Most famous example of strategy in ancient times: Trojan horse - Greek soldiers offered
the horse to the Trojans as a gift - soldiers were hidden inside, led to a Greek victory
- Trojan horse refers to gestures that appear on the surface to
be beneficial to the recipient but that mask a sinister intent
King Arthur and his Knights of the Round Table - - Arthur allegedly considered himself
and each of his
knights to have an equal say in plotting the group's strategy
- demonstrated importance of a central mission
to guide organizational strategy and actions
Lessons offered by Military Strategy - - Machiavelli's "The Prince" offers clever recipes
for
success to government leaders -- quite devious
- American Revolution - demonstrated potential value of strategic alliances (help from
French navy)
- Civil War -- the Union possessed greater resources, such as factories and railroad
lines although Confederacy had better generals --> therefore, sometimes good
strategies simply cannot overcome a stronger adversary
An important lesson of history - Do not make assumptions about what your adversary
can and cannot do. - Executives who make similar assumptions about their competitors
put their organizations'
performance in jeopardy.
Frederick W. Taylor - published "The Principles of Scientific
Management"
- stressed how organizations could become more efficient through identifying the "one
best way" of
performing important tasks
- Although many later works disputed the merits of trying to
find the "one best way," Taylor's emphasis on maximizing organizational performance
became the core
concern of strategic management as the field developed.
Ethics - - Attention to the need for
executives to act ethically when creating strategies increased dramatically in the early
2000s when a series
of companies such as Enron Corporation, WorldCom, Tyco, Qwest, and Global
Crossing were found to
have grossly exaggerated the strength of their performance.
- Like ethics, the implications of international competition are of central interest to
strategic management.
Understanding the Strategic Management Process -
