Management Preferences

Question 1

What are general managers responsible for?

Answer 1

Value creation
Value capture
Value distribution

Question 2

Why is it difficult to deal with stakeholder groups?

Answer 2

Need to determine how to distribute value to them. Need to reconcile conflicting interests. Cannot maintain extreme imbalance for very long

Question 3

What is agency theory and why is it an issue?

Answer 3

Says that management can act in their own self-interest. This is a problem because they may act selfishly and not in the interest of the business or stakeholders

Question 4

How can we resolve the issue of management breaches?

Answer 4

1. Using corporate governance with a board of directors. It ensures the strategic direction of the organization is in the best interest of the business, allows us to monitor management behaviour and catch ethical breaches
2. Aligning compensation with desired actions and penalize for breaches

Question 5

How are management preferences formed?

Answer 5

The intersection of personal attributes, character, competencies, and job context

Question 6

How do management preferences lead to variations in strategy?

Answer 6

Differences in personal preference lead to differences in strategic preference which leads to differences in strategy

Question 7

What is included in the personal attributes of management preferences?

Answer 7

1. Personality traits like openness and extroversion
2. Basic needs like need for achievement, power, security, etc
   These tend to be stable, enduring, and consistent

Question 8

What is the indirect role of management preferences on strategy?

Answer 8

Management preferences filter the perception of the environment and the resources and capabilities of the organization which can influence strategy

Question 9

What are the 10 dimensions of character?

Answer 9

1. Courage: brave, determined
2. Drive: passionate, initiative
3. Collaboration: cooperative, open-minded
4. Integrity: authentic, transparent, principled
5. Temperance: patient, calm, self-controlled
6. Accountability: Takes ownership, accepts consequences
7. Justice: Fair, equitable
8. Humility: self-aware, modest, reflective
9. Humanity: considerate, sympathetic
10. Transcendence: Being connected to something higher than oneself, appreciative

Question 10

What do the 10 dimensions of character lead to?

Answer 10

Lead to judgement where key issues relevant to situations are recognized and decisions are predicated on understanding, analysis, and insight

Question 11

What is job context in the context of management preferences?

Answer 11

Defines the scope and nature of a manager’s responsibilities, performance assessment, and rewards.
Includes formal and informal relationships, job definition, job relations, and situational pressures

Question 12

What are frozen preferences?

Answer 12

Deeply held beliefs that can only be changed with great difficulty

Question 13

What are the steps to management preference analysis?

Answer 13

1. Develop/analyze the strategy
2. Identify required management preferences
3. Test strategy-preferences link
4. Develop gap-closing analysis
5. Move to next step of diamond-e
   May have to recycle strategy during this process