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Strategic Management > Summary of Assignment 1 > Flashcards

Summary of Assignment 1 Flashcards

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1
Q

What are organizational boundaries?

A

Limits within which an organization operates, affecting decision-making, resource allocation, and interactions with external entities.

Factors include company policies, legal regulations, financial constraints, and strategic objectives. In cybersecurity, it refers to the perimeter for managing IT assets and data security.

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2
Q

Define vertical integration.

A

A business strategy where a company controls multiple steps in its supply chain, involving backward or forward integration.

Examples include Apple and Netflix using vertical integration to enhance their competitive edge.

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3
Q

What is horizontal integration?

A

A business strategy where a company expands by acquiring or merging with competitors in the same industry to increase market share.

Examples include Facebook acquiring Instagram and Disney acquiring Marvel and Pixar.

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4
Q

What does cultural integration refer to?

A

The process of different cultures blending and coexisting through shared values, traditions, and practices.

Successful cultural integration promotes inclusivity and reduces conflicts.

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5
Q

What is outsourcing?

A

The practice of hiring external companies or individuals to handle tasks traditionally done in-house, improving efficiency and access to expertise.

Common examples include IT support and customer service outsourcing.

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6
Q

What does ‘make or buy’ refer to?

A

The strategic choice between producing a product or service in-house or purchasing it from external suppliers.

Making offers more control but requires investment; buying can reduce costs but may introduce vendor dependency.

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7
Q

What does Transaction Cost Economics analyze?

A

The costs of economic exchanges, helping firms decide between in-house production or outsourcing based on market costs and asset specificity.

Developed by Ronald Coase and expanded by Oliver Williamson.

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8
Q

Define bounded rationality.

A

The idea that individuals make decisions with limited information, time, and cognitive capacity, often settling for ‘good enough’ choices.

This concept is important for designing systems that align with human behavior.

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9
Q

What is opportunism in a business context?

A

The practice of exploiting situations for advantage, often disregarding ethics or long-term consequences.

It can manifest in deceptive contracts or price manipulation.

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10
Q

What does asset specificity mean?

A

The degree to which an investment is tailored to a specific transaction, limiting its repurposing for other uses.

High asset specificity can create dependency between parties.

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11
Q

What is make and buy (concurrent sourcing)?

A

A strategy where firms produce goods or services in-house while also purchasing from external suppliers to optimize costs and flexibility.

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12
Q

What is an M-form organizational structure?

A

A structure dividing a company into semi-autonomous divisions responsible for their own operations, allowing decentralization of decision-making.

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13
Q

Define coopetition.

A

A business strategy where companies compete and cooperate simultaneously to achieve mutual benefits.

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14
Q

What is forward integration?

A

A strategy where a company expands into distribution or retail, selling products directly to consumers.

This enhances control over pricing and customer experience.

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15
Q

What is backward integration?

A

A strategy where a company expands its operations to include suppliers, reducing dependency on third parties.

This helps control costs and secure supply chains.

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16
Q

What are embedded ties?

A

Strong, long-term relationships built through repeated interactions, trust, and shared experiences, enhancing collaboration.

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17
Q

When should a firm opt for a ‘buy’ strategy?

A

When external sourcing offers better efficiency, cost savings, and expertise than in-house production.

Key circumstances include cost advantages and flexibility needs.

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18
Q

What are major issues to manage in post-merger integration?

A

Cultural differences, leadership alignment, and operational efficiency.

Unclear governance structures can lead to inefficiencies in decision-making.

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19
Q

What lessons can be learned from failed mergers like Daimler-Chrysler?

A

Cultural mismatches and unrealistic synergy expectations can hinder integration efforts.

Successful integration requires clear communication and alignment of business models.

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20
Q

Why has outsourcing become fashionable?

A

It allows companies to focus on core competencies, reduce costs, and gain flexibility while accessing specialized expertise.

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21
Q

What does inter-firm cooperation mean?

A

When two or more companies work together to achieve shared goals by combining resources and knowledge.

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22
Q

Define strategic alliance.

A

A formal agreement between companies to collaborate for mutual benefit without merging fully.

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23
Q

What is alliance governance?

A

How an alliance is managed, including decision-making, control, and dispute resolution.

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24
Q

What are equity alliances?

A

Partnerships where companies take partial ownership of each other’s business.

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25
What are non-equity alliances?
Collaborations where companies agree to work together without exchanging ownership or shares.
26
Define public-private partnership.
A cooperative arrangement between government and private companies to achieve goals like infrastructure projects.
27
What are joint ventures?
A separate legal entity created and owned by two or more firms, sharing resources and profits/losses.
28
What is the alliance life cycle?
The stages an alliance goes through—from formation, growth, and maturity to possible decline or end.
29
What are competency traps?
When firms over-rely on known methods, missing new opportunities or improvements.
30
What are networks in a business context?
Groups of interconnected companies or individuals sharing knowledge and building relationships.
31
What is open strategy?
Involving external parties, like customers or partners, in shaping a company's strategy.
32
Define blockchain.
A digital, decentralized ledger recording transactions transparently and securely across many computers.
33
What is an MNE?
A company that operates in multiple countries.
34
What are mandates in a business context?
Specific roles or responsibilities assigned to subsidiaries by headquarters.
35
Define globalization.
The process of increasing interconnectedness of markets, people, and businesses across countries.
36
What does glocalization mean?
Combining global and local strategies to adapt to different markets.
37
What is hybridization?
Blending different cultures, ideas, or business practices.
38
What is a multi-divisional form?
An organizational structure dividing a company into units based on products or regions.
39
Define arbitrage.
Taking advantage of differences in costs, prices, or regulations across markets.
40
What are multinational corporations?
Companies managing production or delivery services in multiple countries.
41
What are matrix organizations?
A structure where employees report to multiple managers.
42
What is an integrated network?
A structure where resources and capabilities are shared across locations for efficiency and innovation.
43
What are project-based knowledge networks?
Collaborative groups sharing expertise for specific projects.
44
What does BRICs refer to?
Brazil, Russia, India, and China, large emerging economies.
45
What are Chinese family businesses?
Firms in China often run and controlled by family members.
46
What are state-owned enterprises?
Companies owned or controlled by the government.
47
What is the Belt and Road Initiative?
A global development strategy by China to improve trade and infrastructure across Asia, Africa, and Europe.
48
What are essential differences between shanzhai and innovation?
Shanzhai refers to imitation products, while innovation involves creating original products and technologies.
49
What implications might the Belt and Road Initiative have for your country?
Increased investment, improved infrastructure, and expanded trade opportunities, but potential risks include debt dependence and competition.
50
What is corporate governance?
The rules, policies, and strategic framework for how a business is run.
51
What is the difference between ownership and management?
Ownership can be the same or different from management depending on the business structure.
52
Define agency theory.
The study of relationships and conflicts between business authorities and their agents.
53
What are agency costs?
Costs incurred when principles must monitor or correct the actions of agents.
54
What are shareholders?
Individuals who own shares representing partial ownership of a company.
55
Define stakeholders.
Anyone associated with a business who stands to gain or lose based on its success.
56
What is shareholder capitalism?
A model where companies are publicly owned, allowing public purchase and sale of shares.
57
What is social democratic stakeholder capitalism?
A model expanding focus beyond shareholders to include all stakeholders in business success.
58
What is the definition of stakeholders?
Stakeholders describe anyone associated with a business who stands to gain or lose something depending on the success of the business.
59
How does shareholder capitalism differ from other models?
Shareholder capitalism is a model where companies are publicly owned, allowing public purchase and sale of ownership through shares, with a focus on delivering profits to shareholders.
60
What is social democratic stakeholder capitalism?
This model expands the focus beyond shareholders to all stakeholders, integrating social equity policies and supporting labor rights through unions and collective bargaining.
61
Define state capitalism.
In state capitalism, the government plays a strong role in the economy by owning large portions of companies and managing key industries.
62
What characterizes familial capitalism?
A business owned and operated by family members, maintaining full control without offering public shares or having a board of directors.
63
What are corporate codes of ethics?
Structured guides for employees and leaders to facilitate decision making and interactions that could conflict with moral or ethical obligations.
64
What does CSR stand for?
Corporate Social Responsibility.
65
What is strategic CSR?
The idea of aligning a business's CSR efforts with its vision, products, purpose, and target markets for greater efficiency and consumer appeal.
66
What is greenwashing?
A term describing businesses that engage in CSR efforts to improve their reputation after being accused of unethical practices.
67
Define ecological modernization strategies.
Corporate social responsibility efforts that focus on improving environmental health while increasing business efficiency.
68
What are the four major comparative variants of corporate governance systems?
Shareholder capitalism, social democratic stakeholder capitalism, familial capitalism, and east Asian hybrid capitalism.
69
What is deliberate strategy?
A strategy created by leadership with specific intent to achieve a set purpose.
70
Define emergent strategy.
A strategy formed from interactions with the business environment, adapting to changes and patterns.
71
What are Mintzberg's 5 Ps of strategy?
Plan, Ploy, Pattern, Position, Perspective.
72
What is single loop learning?
Learning that involves executing within a predefined framework and improving that framework based on failures.
73
Define double loop learning.
Learning that considers the framework or process being used and adapts it based on feedback and outcomes.
74
What is sensemaking?
The process of gathering information from experiences and interpreting it into personal understanding.
75
What is sensegiving?
The act of influencing sensemakers to adopt a particular understanding or narrative.
76
Define cognitive maps.
Mental pictures used to explain or visualize how something works.
77
What is organizational storytelling?
A method of explaining complex ideas through a narrative format to help others understand.
78
What is the difference between strategy as a noun and strategizing as a verb?
Strategy as a noun refers to a plan or document, while strategizing as a verb refers to the action and implementation of that plan.
79
What communication skills are important in strategizing according to Samra-Fredericks?
Build knowledge, mitigate human interaction protocols, question, display appropriate emotion, deploy metaphors, and utilize history.
80
What roles can strategy consultants play in a client organization?
Assist with decision making, act as unbiased third parties, lead projects, and provide expertise on strategic decisions.
81
What role do middle managers play in strategizing?
Provide insights on how changes impact customers, employees, and operations, offering a grounded perspective for strategic decisions.
82
What is Machiavellian perspective in decision-making?
A viewpoint that emphasizes making decisions quickly to ensure success rather than prolonging the process.
83
What are strategic interests?
The specific interests of various stakeholders that influence the overall vision of a business.
84
What is resistance in an organizational context?
The attitude of individuals or groups towards ideas or changes they do not agree with.
85
What does mobilization of bias refer to?
A series of decisions made to favor a specific group, resisting any challenges to that course.
86
What are the three faces of power?
Decision-making power, non-decision-making power, and ideological power.
87
True or False: Political skills are essential for successful strategists.
True.
88
What are the three levels of power that individuals have?
Decision-making power, non-decision-making power, ideological power ## Footnote Decision-making power allows for conflict, non-decision-making power allows some decisions to be made with input, and ideological power does not give any say.
89
Why are political skills important for a successful strategist?
They help gain stakeholder support and implement strategies by addressing personal desires behind initiatives ## Footnote Most decisions are not black and white; understanding stakeholders' needs is crucial.
90
What are major mechanisms for elite formation and reproduction?
Embedded mobility, network-based mobility, traditional company-based elites ## Footnote Embedded mobility is tied to wealth, network-based mobility is about connections, and traditional company-based elites develop through experience.
91
Define strategic drift.
Failure to review strategy and adapt to environmental changes ## Footnote It leads to complacency and can result in business failure.
92
What is an organizational paradigm?
The lens through which a company views decisions, developed over time and often unrecognized by decision makers.
93
What does sensemaking involve?
Synthesis of information from internal and external environments by managers.
94
What is sensegiving?
Providing communication and information to team members about the organization's direction.
95
Define evolutionary change.
Change made in small pieces rather than all at once.
96
Define revolutionary change.
Change that completely alters the way of working.
97
What is the contingency perspective on change?
The idea that there is not only one 'right' way to do something.
98
What are the three steps in the three-step model of change?
Unfreeze, change, refreeze.
99
What role do metaphors play in change communication?
They help communicate change by likening it to familiar concepts.
100
What is storytelling in the context of change communication?
A method that illustrates the necessity and desired outcome of change.
101
What is framing?
A technique used to shape how someone views a particular idea.
102
What is the significance of power in change management?
It is necessary to enact change.
103
What does politics refer to in an organization?
The various stakeholders and their motives.
104
What is resistance to change?
The tendency of most people to oppose change.
105
What is productive resistance?
Resistance viewed as positive and useful in shaping the change outcome.
106
What is resistance leadership?
Individuals who oppose change and lead others to do the same.
107
List potential reasons why a strategic change initiative might fail.
* Poor communication from those driving the change * Lack of acceptance by stakeholders * External factors and failure to pivot ## Footnote These factors can significantly impact the success of a strategic initiative.
108
What are some common metaphors used in strategy production?
* Journey * Warfare * Game * Engineering * Biological processes ## Footnote These metaphors help convey complex strategies in relatable terms.
109
What is issue selling?
Presenting change in a way that highlights the positives.
110
What can cause feelings of resistance to proposed changes?
Lack of voice in the change process and perceived negative impacts.

Strategic Management (2 decks)

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