Chapter 1

Question 1

Annual Objective

Answer 1

short term milestones that organizations must achieve to reach long term objectives. Should be measurable, quantitative, challenging, realistic, consistent, and prioritized; established at corporate, divisional, and functional levels in large organizations; stated in all areas.

Question 2

Competitive Advantage

Answer 2

anything a firm does especially well compared to rival firms. The point of strategic management

Question 3

Empowerment

Answer 3

act of strengthening employee’s sense of effectiveness by encouraging them to participate in decision making and to exercise initiative/imagination and rewarding them for doing so.

Question 4

Environmental Scanning

Answer 4

conducting research and gathering and assimilating external information (industry analysis) Identify, monitor, and evaluate external opportunities and threats

Question 5

External Opportunities and Threats

Answer 5

economic, social, cultural, demographic, environmental, political, legal, governmental, technological, and competitive trends and events that could significantly benefit or harm an organization in the future, beyond the control of the organization. Take advantage of external opportunities and avoid/reduce the impact of external threats by formulating strategies.

Question 6

Internal Strengths and Weaknesses

Answer 6

an organizations controllable activities that are performed especially well or poorly.

Question 7

Intuition

Answer 7

making decisions based on past experience, judgement, feelings. Essential to good strategic decisions, good in uncertainty. Intuition and analysis combine in strategic management.

Question 8

Long Range Planning

Answer 8

tries to optimize for tomorrow the trends of today

Question 9

Long Term Objectives

Answer 9

specific results that an organization seeks to achieve in pursuing its basic mission in more than a year

Question 10

Mission Statements

Answer 10

enduring statements of purpose that distinguish one business from other similar firms. “what is our business?”

Question 11

Policies

Answer 11

means by which annual objectives will be achieved. Established to support efforts to achieve stated objectives. Guides to decision making and address repetitive or recurring situations. Allow consistency and coordination within and between organizational departments.

Question 12

Retreats

Answer 12

meetings conducted to discuss and update firms vision/mission, opportunities/threats, strengths/weaknesses, strategies, performance, objectives, and policies (held off-site)

Question 13

Strategic Management

Answer 13

art and science of formulating, implementing and evaluating cross-functional decisions that enable an organization to achieve its objectives. Focuses on integrating all areas for success (strategic planning). Exploit and create new and different opportunities for tomorrow = purpose.

Question 14

Strategic Management Model

Answer 14

business ethics/social responsibility/environmental sustainability issues impact all activities in the model, also global/international issues

Question 15

Strategic Management Process

Answer 15

strategic formulation, implementation and evaluation

Question 16

Strategic Planning

Answer 16

the strategy formulation aspect

Question 17

Strategies

Answer 17

means by which long-term objectives will be achieved. Potential actions that require top management decisions and large amounts of the firms resources. Furture oriented. Multifunctional and multidivisional

Question 18

Strategists

Answer 18

responsible for success or failure of an organization. Help gather and analyze organizations information

Question 19

Strategy Evaluation

Answer 19

final stage in strategic management. Review external and internal factors that are basis for current strategies, measure performance, take corrective actions. Needed because success today does not equal success tomorrow

Question 20

Strategy Formulation

Answer 20

developing vision/mission; identifying an organization’s external opportunities and threats, internal strengths/weaknesses; establish long term objectives; generate alternative strategies, choose particular strategies to pursue. Commits an organization.

Question 21

Strategic Implementation

Answer 21

requires a firm to establish annual objectives, devise policies, motivate employees, and allocate resources so that formulated strategies can be executed. “action stage” most difficult: requires discipline, commitment, and sacrifice.

Question 22

Sustained Competitive Advantage

Answer 22

strive for it by continuous adaptation to changes (external and internal), and effective formation, implementation, and calculation of strategies that capitalize.

Question 23

Vision Statement

Answer 23

“What do we want to become?” first step in strategic planning.