1-3 Flashcards
(19 cards)
What is a primary purpose of a firm?
Maximise profit and create investment for workers
Revenue is calculated as revenue minus cost, which equals profit.
What does Friedman state about profit maximization?
Maximise profits only
This reflects a traditional view of business focusing solely on financial returns.
What is the definition of strategy in a business context?
A plan of actions to maximise return on investments that is consistent with mission.
What are Socially Responsible Mutual Funds (SRIs)?
Funds that hold securities in firms adhering to social, religious, moral or environmental beliefs. Criteria vary across funds.
What does globalization refer to?
Goods, services, people, capital, ideas cross borders freely.
How does technology impact the business environment?
Rapid change and diffusion, reduces information asymmetries
Example includes copies and knockoffs.
What is Intellectual Capital?
Create and apply tacit knowledge.
Example includes knowledge intensive firms (KIFS) like Wachtell, Lipton, Katz Merger.
What are the big issues in managing growth?
- Anticipate Change
- Structure
- Asset Management
- Risk Management
- Human Resources
What is the purpose of a mission statement?
State the purpose of organization, identify key stakeholders, provide some direction.
What complicates strategic formulation and implementation?
Conflicting interests complicate strategic formulation and implementation.
What is a critical challenge for strategists regarding stakeholder interests?
Balancing stakeholder’s interests is a critical challenge.
What roles do strategists play in an organization?
- Expect the unexpected
- Provide vision, direction and focus
- Balance stakeholders’ interests
- Enhance employee involvement
Define strategy in a business.
An integrated plan consistent with a mission statement that is based on internal and external analysis.
What is an organizational vision?
An inspiring, overarching and long-term goal. Also called Strategic intent.
What is an objective in a business context?
Specific and measurable operational actions of a mission statement.
What are resources in a business?
Inputs to production.
What are capabilities in a business?
Integrated resources that perform activities.
What is a core competency?
Capabilities that provide competitive advantage.
Define organizational culture.
Shared ideologies, symbols and core values.
