Cap 2

Question 1

Benefits of Strategic Management

Answer 1

• Strategic planning becomes increasingly important as the environment
  becomes more unstable.
• Clearer sense of strategic vision for the firm
• Sharper focus on what is strategically important
• Improved understanding of a rapidly changing environment

Question 2

Forces Influencing Strategy

Answer 2

• Globalization
• Innovation
• Sustainability

Question 3

Creating a Learning Organization

Answer 3

• Strategic flexibility
• Learning organization

Question 4

Strategic flexibility

Answer 4

• the ability to shift from one dominant strategy to another
• demands long-term commitment to development and nurturing of
  critical resources
• also demands that the company become a learning organization

Question 5

Learning organization

Answer 5

an organization skilled at creating, acquiring, and transferring
knowledge and at modifying its behavior to reflect new knowledge
and insights
skilled at:
1. Solving problems systematically
2. Experimenting with new approaches
3. Learning from the organization’s own experiences and past history
as well as from the experiences of others
4. Transferring knowledge quickly and efficiently throughout the
organization

Question 6

Basic Model of Strategic Management

Answer 6

-Environmental scanning
-Strategy Formulation
-Strategy Implementation
-Evaluation and control

Question 7

environmental scanning

Answer 7

monitoring, evaluating and disseminating of
information from the external and internal environments
to key people within the organization
* S W O T analysis: simple way to conduct environmental
scanning

Question 8

Strategy formulation

Answer 8

process of investigation, analysis, and decision-making that provides
the company with the criteria for attaining a competitive advantage
* includes defining the competitive advantages of the business,
crafting the corporate mission, specifying achievable objectives, and
setting policy guidelines
* Mission: purpose or reason for the organization’s existence
* Vision: describes what the organization would like to become
* Objectives: results of planned activity
* Policy: a broad guideline for decision-making that links formulation of a strategy with its implementation

Question 9

Strategy implementation

Answer 9

process by which strategies and policies are put into action through
the development of programs, budgets, and procedures

Question 10

Performance

Answer 10

result of activities
* includes actual outcomes of the strategic management process

Question 11

Feedback

Answer 11

revise or correct decisions based on performance

Question 12

Triggering Events

Answer 12

something that acts as a stimulus for a change in
strategy and can include:
* new C E O
* external intervention
* threat of change of ownership

Question 13

Characteristics of Strategic Decisions

Answer 13

• Rare: Strategic decisions are unusual and typically have no
  precedent to follow.
• Consequential: Strategic decisions commit substantial resources and
  demand a great deal of commitment from people at all
  levels.
• Directive: Strategic decisions set precedents for lesser decisions and
  future actions throughout an organization.

Question 14

Modes of Strategic Decision-making

Answer 14

• Entrepreneurial mode: strategy is made by one powerful individual
  -Adaptive mode: characterised by reactive solutions to existing problems, rather than a proactive search for new opportunities
• Planning mode: involves the systematic gathering of appropriate information for situation analysis, the generation of feasible alternative strategies, and the rational selection of the most appropriate strategy
• Logical incrementalism: a synthesis of the planning, adaptive, and, to a lesser extent, the entrepreneurial modes