EXAM 4 Flashcards
(97 cards)
1
Q
Planning
A
Setting goals and deciding how to achieve them
1
Q
Plan
A
A document that outlines how goals are going to be met
2
Q
Business plan
A
A document that outlines a firm’s goals, the strategy for achieving them and the standards for measuring success
3
Q
Business model
A
Outlines the need the firm will fill, the operations of the business, its component and functions, and expected revenues and expenses
4
Q
Strategy
A
Sets the longterm goals and direction for an organization
Generally reconsidered every year because of changing conditions
5
Q
Strategic management
A
A process that involves managers from all parts of the organization in the formulation and implementation of strategies
6
Q
An organization should adopt planning and strategic management for 3 reasons
A
- Provide direction and momentum
- Encourage new ideas
- Develop a sustainable competitive advantage
7
Q
Mission statement
A
“What is our reason for being?”
Responsibility of top management and board of directors
8
Q
Vision statement
A
“What do we want to become?”
Guides decisions
Developed by top managers
9
Q
Values statement
A
“What values do we want to emphasize?”
What a company stands for
10
Q
Strategic planning
A
Done by top managers for the next 1-5 years
11
Q
Tactical planning
A
Done by the middle managers for the next 6-24 months
12
Q
Operational planning
A
Done by first-line managers for the next 1-52 weeks
13
Q
Characteristics of effective vision statements
A
Clarity
Future focus
Abstractness & challenge
Idealism
14
Q
Goal (objective)
A
A specific commitment to achieve a measurable result within a stated period of time
15
Q
Long-term goals (strategic goals)
A
1-5 years
Focus on achieving the strategies in a company’s strategic plan
16
Q
Short-term goals (tactical or operational goals)
A
12 months
17
Q
Means-end chain
A
Shows how goals are connected or linked across an organization
18
Q
Operating plan
A
A plan that breaks long-term output into short-term goals
19
Q
Action plan
A
The course of action needed to achieve a stated goal
20
Q
SMART goal
A
Specific
Measurable (or quantifiable)
Attainable (or realistic)
Results-oriented (support company’s vision)
Target dates (deadlines)
21
Q
Management by objectives (MBO)
A
- Jointly set objectives
- Develop action plans
- Periodically review performance
- Give performance appraisal and rewards
22
Q
Cascading goals
A
Process of ensuring that the strategic goals set at the top level align (or cascade) downward with more specific short terms goals
23
Q
For goal setting to be successful…
A
- Top management and middle management must be committed
- It is best to cascade goals
- Goals must “cascade” (be linked consistently down through the organization)
24
Planning/control cycle
1. Make the plan
2. Carry out the plan
3. Control the direction by comparing results with the plan
4. Control the direction by taking corrective action in 2 ways (correcting deviations or improving future plans)
25
Main core skill
Critical thinking/problem thinking (consider alternative solutions to problems and remain open-minded)
26
Main soft skill
Networking
27
Main knowledge skills
Task-based/functional
Understanding the business
28
Proactive
Relying on your own choices instead of luck and circumstances. Controlling the situation
29
Strategic positioning
Attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company
(Performing different activities from rivals)
30
Key principles of strategic positioning
1. Strategy is the creation of a unique and valuable position
2. Strategy requires trade-offs in competing
3. Strategy involves creating a "fit" among activities
31
Levels of strategy
1. Corporate-level
2. Business-level
3. Functional-level
32
Corporate-level strategy
Focuses on the organization as a whole
33
Business-level strategy
Focuses on individual business units or product/service lines
34
Functional-level strategy
A plan of action by each functional area of the organization to support higher level strategies
35
5 steps of the strategic management process
1. Establish the mission, visions, and values statements
2. Assess the current reality
3. Formulate corporate, business, & functional strategies
4. Strategic implementation: Execute the strategies
5. Maintain strategic control: The feedback loop
36
Strategy formulation
Process of choosing among different strategies and altering them to best fit the organization's needs
37
Strategy implementation
Putting strategic plans into effect
38
Strategic control
Consists of monitoring the execution of strategy and making adjustments
39
Sustainable competitive advantage
Exists when other companies cannot duplicate the value delivered to customers
40
SWOT analysis
A company assesses its strengths, weaknesses, opportunities, and threats
41
SWOT analysis divided into 2 parts
1. Internal strengths and weaknesses
2. External opportunities and threats
42
Organizational strengths
The skills and capabilities that give the organization special competencies and competitive advantages
43
Organizational weaknesses
The drawbacks that hinder an organization
44
Organizational opportunities
Environmental factors that the organization may exploit for competitive advantage
45
Organizational threats
Environmental factors that hinder an organization's achieving a competitive advantage
46
VRIO
A framework for analyzing a resource or capability to determine its competitive strategic potential
47
VRIO questions
Valuable?
Rare?
Costly to imitate?
Organized to exploit value, rarity, Imitability? (capable or worthy of being imitated)
48
Forecast
A vision or projection of the future
49
Trend analysis
A hypothetical extension of a past series of events into the future
50
Contingency planning (scenario analysis)
Creation of alternative hypothetical but equally likely future conditions
51
Benchmarking
A process where a company compares its performance with that of high-performing organizations
52
3 types of corporate strategies
1. Growth strategy
2. Stability strategy
3. Defensive strategy
53
A growth strategy
Involves expansions as in sales revenues, market share, number of employees, or # of customers
54
Innovation strategy
Part of growth strategy
Grows market share or profits by innovating improvement in products or services
55
Stability strategy
Involves little or no significant change
56
Defensive strategy
Involves reduction in the organization's efforts
57
BCG matrix
Used by companies to evaluate their strategic business units on the basis of (1) their business growth rates and (2) their share of the market
58
Stars
High growth, high market share (definite keepers)
59
Question marks
Risky new ventures (some will become stars, some dogs)
60
Cash cows
Have slow growth but high market share
61
Dogs
Have low growth, low market share (should be gotten rid of)
62
Diversification
Company operates several businesses in order to spread the risk
63
Related diversification
When a company purchases a new business that is related to the company's existing business portfolio
Ex. Disney purchase of 21st century fox
64
Unrelated diversification
Company acquires another company in a completely unrelated business
Ex. Amazon's purchase of Whole Foods
65
Vertical integration
A firm expands into businesses that provide the supplies it needs to make its products
Ex. Starbucks buys and roasts their own coffee
66
Porter's Model for industry analysis
1. Threats of new entrants
2. Bargaining power of suppliers
3. Bargaining power of buyers
4. Threats of substitute products or services
5. Rivalry among competitors
67
Porter's 4 competitive strategies
1. Cost-leadership (keep costs and prices low or a wide market)
2. Differentiation (offering unique and superior value for a wide market)
3. Cost-focus (keeping costs and prices low for a narrow market)
4. Focused differentiation (offering unique and superior value for a narrow market)
68
3 core processes of business
1. People (consider who will benefit you in the future)
2. Process (consider how success will be accomplished)
3. Operations (consider what path will be followed)
69
Controllings
Monitoring performance, comparing it with goals, taking corrective actions
70
Control process steps
1. Establish standards
2. Measure performance
3. Compare performance to standards
4. Take corrective action
71
Control standard
The desired performance level for a given goal
72
Feedforward control
Focuses on preventing future problems
73
Control charts
A visual statical tool used for quality control purposes
74
Concurrent control
Entails collecting performance information in real time
75
Feedback control
Amounts to collecting performance information after a task or project is done
76
Balanced scorecard
Gives top managers a fast but comprehensive view of the organization via 4 indicators
1. Customer satisfaction
2. Internal processes
3. Organization's innovation & improvement activities
4. Financial measures
77
Budget
A formal financial projection
78
Incrementing budgeting
Allocating increased or decreased funds to a department by using the last budget period as a reference point
79
Fixed budget
Allocates resources on the basis of a single estimate of costs
80
Variable budget
Allows the allocation of resources to vary in proportion with various levels of activity
81
Customer retention
Refers to the actions companies take to reduce customer defections
82
Productivity
Outputs / inputs
83
Quality assurance
Focuses on the performance of workers, urging employees to strive for 0 defects
84
Deming management
1. Quality should be aimed at the needs of the consumer
2. Companies should aim at at improving the system, not blaming workers
3. Improved quality leads to increased market share, company prospects, and employment
4.Quality can be improved on the basis of hard data
85
PDCA cycle
A Plan-Do-Check-Act cycle used to observe data for continuous improvement of operations
86
Total quality management (TQM)
1. Make continuous improvement a priority
2. Get every employee involved
3. Listen to and learn from customers and employees
4. Use accurate standards to identify and eliminate problems
87
Two core principles of TQM
1. People orientation
2. Improvement orientation
88
Kaizen
Japanese philosophy of small continuous improvements
89
Reduced cycle time
The reduction of steps in the work process
90
Statistical process control
Uses periodic random samples from production runs to see if quality is being maintained
91
Six sigma
A process that reduces defects in manufacturing and service-related industries
92
Lean six sigma
Focuses on problem solving and performance improvement
93
ISO 9000 Series
Quality control procedures companies must install
94
Main attitude
Career management
95
6 areas of control
Structural
Cultural
Physical
Human Resources
Informational
Financial
96
Barries to control success
Too much control
Overemphasis on means instead of ends
Overemphasis on one instead of multiple approaches
