Chapter 1 Flashcards
(29 cards)
What is a strategy?
A set of related actions that managers take to increase their company performance
What is strategic leadership?
Creating competitive advantage through effective management of the strategy making process
What is strategy formulation?
Selecting strategies based on analysis of an organization’s external and internal evnironment
What is strategy implementation?
Putting strategy into action
What is risk capital?
Equity capital invested with no guarantee that stockholders will recoup their cash or earn a decent return
What is the goal of profit-making companies?
Maximizing shareholer value
What is shareholder’s value?
Return that shareholders earn from purchasing shares in the company
What is profitability?
The return a company makes on the capital invested in the enterprise
What is profit growth?
The increase in net profit overtime
What is a sustained competitive advantage?
A company’s strategies enable it to maintain its competitive advantage (above-average profitability) for a number of years
What is a business model?
The conception of how strategies should work together as a whole to enable the company to achieve its competitive advantage
3 type of managers?
General managers, functional managers, and multidivisional managers
What is a general manager?
A manager who bear the responsibility for the overall performance of the company or for one of its major self-contained subunits or division
What is a functional manager?
A manager responsible for supervising a particular function (task, activity, or operation: accounting, marketing, R&D, etc)
What is a multidivisional manager?
A company that competes in several different businesses and has create separate self-contained division to manage each
What are the 3 level of strategic management?
Corporate level (CEO, Board of Directors, corporate staff), Business level (Divisional managers and staffs), Functional level (functional managers)
What is a business unit?
A self-contained division that provides a product or service for a particular market
What is scenario planning?
Creating plan based on a “What if” scenario
What is cognitive bias?
Systematic errors that occur in decision making from the way people process information
What is a prior hypothesis bias?
A cognitive bias decision making occur when someone who have strong prior view/beliefs tend to make decision on the basis of these beliefs despite evidence otherwise
What is an escalating commitment?
When decision maker invest even more resources to a failing ideas due to have invested too much (sunk cost)
What is reasoning by analogy?
Use of simple analogy to understand complex ideas
What is a representative?
Tendency to generalize from a small sample
What is illusion of control?
Tendency to overestimate one’s ability to control events
