Unit 1.2 - Organizational Strategy Flashcards
What is a mission statement and the three key statements that it contains?
The Mission Statement explains the essence of an organization - why it exists, what it wants to be, who it serves, and why it should continue
- Purpose statement
- Business statement
- Value statement
Different from a Vision Statement which describes the future of the company as a successful organization
Define strategy. What is its role in an organization (the characteristics of generic strategy)?
Strategy consists of goals and set of policies designed to achieve competitive advantage in a particular marketplace.
Generic strategies:
- Promote the mission and goals the organization is striving to achieve. Long-term focus that extends beyond the immediate time horizon
- Define the action plans the organization intends to follow to achieve its mission and goals
- Recognize explicitly the impact of the external environment, especially the reactions of competitors
What is perfect competition vs. imperfect competition?
Imperfect competition:
* Few competitors; numerous sellers and buyers
* Asymmetric information
* Heterogeneous products
* Barriers to entry
* Supernormal profits
Perfect competition:
* Numerous sellers and buyers
* Perfect information
* Homogeneous products
* No barriers to entry or exit
* Average or below-average profits
What are the Three Grand Strategies?
Identified by Michael Porter
To maintain a competitive edge:
- Cost leadership - being a low-cost producer
- Differentiation - having a unique product/brand in a large market
- Focus strategy - niche, aims at either cost advantage or differentiation advantage in a narrow market
What is competitive advantage and the value chain (9 activities)?
Competitive advantage is the ability to transform inputs into goods and services at a maximum profit on a sustained basis, better than the competitors
The Value Chain –
Explores the competitive advantages that a firm might have over its competitors
Uses a Value Chain Analysis
Primary activities (*the chain):
- Inbound Logistics (ex. controlling inventory, materials handling)
- Operations (transforming input into the final product/service)
- Outbound Logistics (distributing the product, order processing, etc.)
- Marketing and Sales
- Service (ex. repairing, training)
Support activities (these happen throughout the value chain process):
- Firm Infrastructure (ex. accounting, legal, planning, etc.)
- Human Resource Management
- Technology Development
- Procurement (obtaining inputs such as raw materials, office supplies)
How are strategies formulated / what is the strategic management process? What are the 6 steps of the strategic management process?
The strategic management process involves a SWOT analysis
6 steps of the strategic management process:
- Determine what business we are in
- Environmental scanning - involves analyzing opportunities and threats
- Identify resources, strengths (core competencies), and weaknesses
- Combine the external and internal analysis to formulate an overall generic strategy for the org to follow
- Implement the strategy effectively
- Evaluate and monitor results
What is strategic alignment? What must an org’s mission and strategy be aligned with?
Selecting the right HR practices and business functions and merging them into a coordinated whole
Should be aligned with :
Structure (ex. org chart, who’s reporting to who)
Systems (patterned activities that keep the company operating)
Culture (ex. shared values and beliefs that influence employee behavior)
Processes (ex. recruiting, decision making, communicating useful information)
What is the Resource-Based Theory of the Firm and the 3 types of distinctive competencies?
Focuses on Internal Resources;
Control of resources that are rare, non tradable, nonsubstitutable,
valued by the market, and difficult or impossible to imitate
3 types of distinctive competencies:
Human Resources, Physical Resources, and Financial Resources
What are the forces in the five-forces model of competition?
Developed by Michael Porter
The model identifies the 5 major environmental forces of an industry analysis
- Suppliers
- Buyers
- Rival firms
- Product substitutes
- Threat of new entrants
What are the five groups of project management processes?
PM process - short term HR specific goal or organization wide initiative that requires assessing available knowledge, skills, and resources.
- Initiating
- Planning
- Executing
- Monitoring & controlling
- Closing
What are the 4 strategic types?
- Prospector - innovation, risk-taking, usually for growing companies
- Defender - opposite of 1; concerned with stability, internal efficiency, retaining customers without innovation
- Analyzer - combination of 1 & 2; best strategy
- Reactor - not really a strategy; when a company’s MO is reaction to problems (ex. ConsenSys)
