Ch. 8 The Manager as a Planner and Strategist

Question 1

What is planning?

Answer 1

identifying and selecting appropriate goals and course of action: one of the four principal tasks of management

Question 2

What are the three major steps in the planning process?

Answer 2

(1) determine mission statement and goals (2) choosing or formulating strategies (3) selecting the most effective ways to put those strategies into action, or implementing the strategy

Question 3

What is a strategy?

Answer 3

a cluster of decisions about what goals to pursue, what actions to take, and how to use resources to achieve goals

Question 4

What is a mission statement?

Answer 4

a broad declaration of an organization’s purpose that identifies the organizations products and customers and distinguishes the organization from its competitors

Question 5

What is a corporate-level plan?

Answer 5

top managements decision pertaining to the organizations’s mission, overall strategy, and structure.

Question 6

What is a corporate-level strategy?

Answer 6

a plan that indicates in which industries and national markets an org. intends to compete

Question 7

What is a business-level plan?

Answer 7

divisional managers’ decisions pertaining to the divisions long term goals, overall strategy and structure

Question 8

What is a business-level strategy?

Answer 8

a plan that indicates how a division intends to compete against its rivals in an industry

Question 9

What is a functional-level plan?

Answer 9

functional managers decisions pertaining to the goals that they propose to pursue to help the division attain its business level goals

Question 10

What is a functional-level strategy?

Answer 10

a plan of action to improve the ability of each of an organizations functions to perform its task-specific activities in ways that add value to an org. goods and services

Question 11

What is S.W.O.T analysis?

Answer 11

a planning exercise in which managers identify organizational strengths, weaknesses, and environmental opportunities and threats.

Question 12

What is a low cost strategy?

Answer 12

managers try to gain a competitive advantage by focusing all of the companies energies on driving the organizations costs down below the costs of its rivals.

Question 13

What is a differentiation strategy?

Answer 13

distinguishing an organizations products from the products of competitors on dimensions such as product design, quality, or after sales service

Question 14

What does “stuck in the middle” imply?

Answer 14

managers cannot focus on a low cost strategy and a differentiation strategy, org. stuck in the middle tend to have lower levels of performance than those that just pursue one of the strategies. an exception to this rule is when a company simultaneously drive costs down and differentiate their products.

Question 15

What is a focused low-cost strategy?

Answer 15

serving only one segment of the overall market and trying to be the lowest-cost org. serving that segment

Question 16

What is a focused differentiation strategy?

Answer 16

serving only one market and trying to be the most differentiated org. serving that market

Question 17

What is the corporate level strategy of “concentration on a single industry”?

Answer 17

reinvesting a companies profits to strengthen its competitive position in its current industry

Question 18

What is vertical integration?

Answer 18

expanding a companies operations either backward into an industry that produces inputs for its products or forward into an industry that uses, distributes, or sells its products

Question 19

What is diversification?

Answer 19

expanding a company’s business operations into a new industry in order to produce new kinds of valuable goods or services

Question 20

What is related diversification?

Answer 20

entering a new business or industry to create a competitive advantage in one or more of an organizations existing divisions or businesses

Question 21

What is synergy?

Answer 21

performance gains that result when individuals and departments coordinate their actions

Question 22

What is a strategic alliance?

Answer 22

an agreement in which managers pool or share their organizations resources and know how with foreign company and the two org. share the rewards and risks starting a new venture.

Question 23

What is a joint venture?

Answer 23

a strategic alliance among two or more companies that agree to jointly establish and share the ownership of a new business.