CH2: Managing the Strategy Process

Question 1

Strategic Leadership

Answer 1

Executives’ use of power and influence to direct the activities of others when pursuing an org. goals

Question 2

Power

Answer 2

strategic leader’s ability to influence the behavior of other org. members to do things, including things they would not do otherwise

Question 3

upper-echelons theory

Answer 3

a conceptual framework that views org. outcomes - strategic choices and performance levels - as reflections of the values of the members of the top management team .

Question 4

What is the Level-5 leadership pyramid?

Answer 4

A conceptual framework that shows leadership progression through five distinct, sequential levels.

Question 5

What did Collins find out about the companies he identified as great?

Answer 5

They were led by Level-5 executives.

Question 6

How does the Level-5 leadership pyramid work?

Answer 6

An effective strategic leader goes through a natural progression of five level. Each level builds upon the previous one and an individual can move on to the next level of leadership only when the current level has been mastered.

Question 7

Level1:

Answer 7

Highly Capable individual: make productive contributions through motivation, talent knowledge, and skills.

Question 8

Level2:

Answer 8

Contributing Team Member:

Uses high level of individual capability to work effectively with others in order to achieve team objectives.

Question 9

Level3:

Answer 9

Competent Manager:

Is efficient and effective in organizing resources to accomplish stated goals and objectives. Does things right.

Question 10

Level4:

Answer 10

Effective Leader:

Presents compelling vision and mission to guide groups toward superior performance.

Question 11

Level5:

Answer 11

Executive:

Build enduring greatness through a combination of willpower and humility.

Question 12

Strategy formulation

Answer 12

concerns the choice of strategy in terms of where and how to compete

Question 13

strategy implementation

Answer 13

concerns the organization, coordination, and integration of how work gets done, or strategy execution

Question 14

In what areas can strategy formulation be broken down?

Answer 14

Corporate strategy
Business strategy
Functional strategy

Question 15

Corporate strategy

Answer 15

concerns questions relating to where to compete as to industry, markets, geography

Question 16

Business strategy

Answer 16

concerns the question of how to compete. (cost leadership, differentiation, value innovation)

Question 17

Functional strategy

Answer 17

how to implement a chosen business strategy. Different corporate and business strategies will require different activities across various functions

Question 18

Who formulates the corporate strategy?

Answer 18

Corporate executives

Question 19

Where does business strategy occur in?

Answer 19

Occurs within strategic business unity (SBUs)

Question 20

SBUs

Answer 20

standalone divisions of a larger conglomerate, each with their own profit-and-loss responsibility

Question 21

Where are the business functions?

Answer 21

They are within each strategic business unit (accounting, finance, HR, manufacturing)

Question 22

strategic management process

Answer 22

method put in place by strategic leaders to formulate and implement a strategy, which can lay the foundation for a sustainable competitive advantage

Question 23

Which three approaches do strategic leaders rely on when setting the strategy process?

Answer 23

1. Strategic planning (Top-down)
2. Scenario planning
3. Strategy as planned emergence

Question 24

Top-down strategic planning

Answer 24

A rational, data-driven strategy process through which top management attempts to program future success

Question 25

When does the top-down approach work well?

Answer 25

When the environment doesn't change that much. Top-down strategic planning rests on the assumption that we can predict the future from the past.

Question 26

Scenario planning

Answer 26

strategy planning activity in which top management envisions different what-if scenarios to anticipate plausibel futures in order to derive strategic responses. (it results in a feedback loop of the AFI strategy elements because of constant revision)

Question 27

black swan events

Answer 27

Incidents that describe highly improbable but high-impact events

Question 28

dominant strategic plan

Answer 28

the strategic option that top managers decide most closely matches the current reality and which is then executed

Question 29

illusion of control

Answer 29

a tendency by people to overestimate their ability to control events

Question 30

Strategy as planned emergence (Henry Mintzberg)

Answer 30

Realized strategy is a combination of top-down intended strategy and bottom-up emergent strategy

Question 31

What exactly happens in the strategy as planned emergence?

Answer 31

The strategy process begins with a top-down strategic plan based on an analysis of external and internal env. Parts of the intended strategy are likely to fall by the wayside because of unpredictable events and turn to unrealized strategy. The realized strategy is formulated through a combination of top-down and bottom-up emergent strategy.

Question 32

realized strategy

Answer 32

formulated through a combination of top-down intentions and bottom-up emergent strategy.

Question 33

emergent strategy

Answer 33

describes any unplanned strategic initiative bubbling up from deep within the organization

Question 34

What is a key feature in the strategy as a planned emergence model?

Answer 34

strategic initiative, which is any activity a firm pursues to explore and develop new products and processes, new markets...

Question 35

Strategic initiatives can bubble up from deep within a firm through:

Answer 35

- Autonomous action - Serendipity - Resource-allocation process (RAP)

Question 36

Autonomous actions

Answer 36

strategic initiatives undertaken by lower-level employees on their own volition and often in response to unexpected situations

Question 37

Serendipity

Answer 37

describes random events, pleasant surprises, and accidental happenstances that can have a profound impact on a firm's strategic initiatives

Question 38

Resource-Allocation process (RAP)

Answer 38

determines the way it allocates its resources and can be critical in shaping its realized strategy.

Question 39

planned emergence

Answer 39

Strategy process in which org. structure and systems allow bottom-up strategic initiatives to emerge and be evaluated and coordinated by top-management

Question 40

stakeholder strategy

Answer 40

integrative approach to managing a diverse set of stakeholders effectively in order to gain and sustain competitive advantage

Question 41

stakeholder impact analysis

Answer 41

decision tool with which strategic leaders can recognize, prioritize, and address the needs of different stakeholders

Question 42

When does a stakeholder have power over a company?

Answer 42

When it can get the company to do something that it would not otherwise do

Question 43

When does a stakeholder have a legitimate claim?

Answer 43

When it is perceived to be legally valid or otherwise appropriate

Question 44

When does a stakeholder have an urgent claim?

Answer 44

When it required a company's immediate attention and response

Question 45

Stakeholder Impact analysis 5 steps

Answer 45

1: Who are our stakeholders? 2: What are our stakeholders interests and claims? 3. What opportunities and threats do our stakeholders present? 4: What economic, legal.. responsibilities do we have to our stakeholders? 5: What should we do to effectively address the stakeholder concerns?