Unit 2

Question 1

Monopoly

Answer 1

The ideal condition for a firm to operate is in monopoly conditions

Monopoly: No rivals, facing no competition for researches or customers

Lack of competitors = remains unchallenged

Question 2

Oligopoly

Answer 2

Few competitors dominate the industry. Ex. Airline industry

Question 3

Hyper-competition

Answer 3

Many direct competitors, and competitive advantages are short lived. Ex. Fast food industry

Question 4

Define forecasting

Answer 4

The proccess of predicting what will happenin the future

Question 5

State and explain the different types of forecasting.

Answer 5

Qualitative Forcasting: Uses expert opinions to predict the future

Quantitative Forcasting: Uses mathematical models and statistical analysis of historical data and surveys to predict future events.

Question 6

Why should managers be cautious of forecasting?

Answer 6

Managers should be cautious of forecasting because they rely of human judgement, which as the potential to be wrong. As well, they are planning aids, and should not be used as substitutes.

Question 7

What is contingency planning?

Answer 7

Contingency planning identifies alternative courses of action to take when things goes wrong.

Question 8

Define scenario planning

Answer 8

Scenario planning identifies alternative future scenarios and makes plans to deal with each one.

Question 9

Define benchmarking. Provide your own example

Answer 9

Customer Service: Comparing the time eah company takes on average to respond to customers helps identify areas fo improvement for customer satisfactions and efficiency.

Sales: Comparing the sales of different companies with similar products help determine ways to improve demand, conversion rates, and revenue.

Question 10

Porter’s Five Forces Model

Answer 10

Industry competition: The intensity of rivalry among firms in its industry and the ways they behave competitively towards one another

New Entrants: the threats of new competitors entering the market, based on the presence or absence of barriers to entry

Substitute products or Services: the threat of substrate products or services, based on the ability of consumers to find what they want from other sellers.

Bargaining power of suppliers: the ability of resource suppliers to influence the price that they will pay for the firm’s products or services.

Bargaining power of customers: ability of customers to influence the price that they will pay the firm’s products or services

Question 11

Industry Attractiveness

Answer 11

Determines the attractiveness of an industry

Influences a firm’s long-term returns

Question 12

Long Range Plans

Answer 12

Long range plans will look 3 or more years into the future

Top-level management is more likely to be involved in setting long-range plans/directions for an organization. Everyone in an organization needs to understand who the long-term plan is.
Daily events will divert attention from important
People will end up working hard without achieve

Question 13

Intermediate and Short range Plans

Answer 13

• Lower-level management focus more on short-range planning to help achieve the bigger goal
• Elliott Jaques suggested that people vary in their capacity to think with different time horizons.

Question 14

Todays Planning Complexities

Answer 14

Long range planning for even top level managers have become more difficult because of how quickly things evolve

Technology has made long range planning shorter and shorter

Question 15

Strategic Plans

Answer 15

Strategic planning is mainly used by top level management

These are long term plan that create general directions for an organization

This is helpful in appropriately allocating resources and tasks

It all starts with having a vision for your organization (clear purpose for the organization and what is hopes to be in the future)

Although this involved long term planning managers must also by dynamic

Question 16

Tactical Plans

Answer 16

Tactical plans are developed to help implement strategic plans
These are typically intermediate range pland

In sports organizations you can think of this as the use of special plays or contingency plans

Tactical plans often take form the functional plans

Question 17

Functional Plans

Answer 17

Production plans- dealing with work methods and technology

Financial Plans dealing with money and capital investments

Facilities plans dealing with facilities and work layout

Logistics pans dealing with suppliers and acquiring resource input

Marketing plan dealing with selling and distribution and distributing goods or service s

Human resources plans dealing with building a talented workforce

Question 18

Operation Plans

Answer 18

Operational plans identity short term activities to implement strategic plans

Operational plans include both standing plans and single use plans

Standing plans policies and procedures that used over and over again

Single use plan used for one specific task or time period (ex. Budget plan)

Question 19

Policy vs Procudure

Answer 19

Policy is a standing plan that communicated broad guidelines for decisions and actions

Procedure- rules that precisely describe actions that are to be taken in specific situations

Question 20

Budget

Answer 20

a plan that commits resources to projects activities

Question 21

Zero based budget

Answer 21

Zero based budget approached each budget period as if it were brand new and does not guarantee renewal of past budget or additional funds

Question 22

What are the two main focuses of the planning process?

Answer 22

Decide where you want to go (setting objectives)

Decide how best to go about it

Question 23

List and describe the 5 steps in the planning process.

Answer 23

Define your objectives: Identify what desires and results you want to accomplish. Be specific in your goal, and set certain goal points you want to reach in order to track how far off the mark you are.

Determine where you stand in relation to objectives: Determine what strengths work and weaknesses that may hold you back. Evaluate current accomplishments relative to the desired results.

Develop future premises regarding future conditions: Anticipate future events. Generate sceneries that may happen. Identify things that may help or hinder your progress towards the goal.

Analyze alternatives and make a plan: List and evaluate possible actions. Describe what must be done to follow the best course of action

Implement the plan and evaluate results: Take action and carefully measure your progress towards objectives. Follow through with the plan. Evaluate results, correct actions, and revise plans as needed.

Question 24

List and describe the 3 benefits of planning

Answer 24

Planning improves focus and flexibility: An organization with flexibility is willing to change and adapt to shifting circumstances. Improves performance for success and allows for more opportunities within the workplace.

Planning improves action orientation:
Planning helps individuals and organizations to stay competitive through setting clear performance targets. It prevents complacency traps, and avoids making impulsive.

Planning improves coordination and control:
When plans are coordinated, there is a likelihood that their combined accomplishments will advance performance for the organization. Well done planning facilitates control. Without planning, control lacks objectives and standards for measuring the progress within an organization, and evaluating measures to take to improve performance.

Question 25

What is a complacency trap?

Answer 25

When an organization lacks awareness and concern for potential problems, resisting change and being overly comfortable in current strategies, leading to failure. It's an organization simply being carried along by the flow of events.

Question 26

What does it mean to be calendar bound?

Answer 26

When an organization is tightly scheduled and maintains a highly structured daily agenda. It prevents flexibility and plans for spontaneous events that may occur.

Question 27

Why do even the most well thought out plans need to sometimes be revised?

Answer 27

Every plan needs to allow for flexibility and revision as there are the risks of unexpected events that occur and are out of control of the organization. As well, if the initial plan does not meet the organizations’ expectations, then reviewing a plan may be beneficial and improve efficiency and outcomes. As well, flexibility allows businesses for more opportunities.

Question 28

Mission

Answer 28

Mission: statement that express the organization’s reason for existence What are we moving to? What kind of impact do we want to make in the world? What do we want to be known for? A clear mission also helps inspire the support and respect of an organization’s stakeholders

Question 29

What is Organizational Culture

Answer 29

Organizational Culture is the predominant value system for the organization as a whole The observable and audible atmosphere in an organization, noticed by visitors, customers, and employees. It's reflected in conversations and actions, often summarized as "the way we do things here."

Question 30

Levels of Organizational Culture Organizational culture has two main levels, often compared to an iceberg:

Answer 30

1. Observable Culture (Above the Surface) Visible actions and events – What one sees and hears in the workplace. Examples: Dress code and office arrangement Interactions between employees and with customers Language and tone used in conversations Daily behavior patterns. 2. Core Culture (Below the Surface) Underlying values – The deep-rooted beliefs and assumptions that guide behavior. Examples of Core Values: Innovation & risk-taking Ethics & integrity Social responsibility Customer service Performance excellence Teamwork Worker involvement Strong Core Culture: Found in high-performing organizations. Shared and enduring values. Shapes decisions, behaviors, and company direction

Question 31

Operating Objectives Purpose

Answer 31

Translate the mission statement and core values into specific performance targets.. Typical Business Operating Objectives: Profitability – Achieving a net profit. Financial Health – Securing capital and generating positive returns. Cost Efficiency – Using resources effectively to minimize costs. Customer Service – Meeting customer needs and building loyalty. Product Quality – Delivering high-quality goods or services. Market Share – Gaining a greater portion of the customer base. Human Talent – Attracting and retaining a skilled workforce. Innovation – Creating new products, services, or processes. Social Responsibility – Contributing positively to society.

Question 32

Stakeholders

Answer 32

Being individuals and groups who are directly affected by the organization. In many cases the personal values of a found/leader become part of the organizational culture Refers to the predominant values system of the organization as a whole

Question 33

Business Stakeholders

Answer 33

(mission statements) - asked to identify of tet by writing down which ones there are, people usually mess up on supplier Employees Communities Shareholders Customers Supplies: we think of our supplies as patterns who share our goal of…. Highest quality

Question 34

Elliot Jaques Time Horizons

Answer 34

Most of us in 3 month time frame A few of us 1 year time frame Very few of us 20 year time frame

Question 35

Pest Analysis An analysis of the Organization’s Environment

Answer 35

Political: Laws and regulations, government policies. Economics: general environment influenced by customer spending, resource supplies, and investment capital Socio-Cultural: Norms, customs, social values, general roles. Technological: developments in technology and the edge of another technology revolution.

Question 36

Change Leaders vs. Status Quo Managers

Answer 36

Change Leaders Confident, proactive, risk-takers Embrace new ideas & innovation Make things happen Expect surprises and adapt Status Quo Managers Reactive, avoid risk Prefer predictability and routine Wait for things to happen Feel threatened by change

Question 37

Top-Down Change

Answer 37

Initiated by senior management. Focused on performance improvement. Risk: Often fails (~70% of large-scale efforts in North America fail). Key problem: Poor implementation and lack of employee support. Needs buy-in from all levels for success.

Question 38

Bottom-Up Change

Answer 38

Change initiatives come from any level of the organization. Encourages employee empowerment, participation, and creativity. Example: Valérie Mac-Seing at Stikeman Elliott LLP—started green initiatives that were initially resisted but became part of company identity.

Question 39

Integrated Change Leadership

Answer 39

Combines both top-down and bottom-up approaches. Top-down breaks old habits and makes structural adjustments. Bottom-up builds long-term adaptability and employee engagement

Question 40

External Forces

Answer 40

Globalization Market competition Local economic conditions Government laws and regulations Technological developments Market trends Social forces and values Organizations must adapt to these evolving external conditions—or risk failure.

Question 41

Internal Forces

Answer 41

Changes within the organization that require alignment across various systems and departments Planned change = proactive, goal-driven, and strategic. Unplanned change = reactive, often crisis-driven, and immediate.

Question 42

Incremental Change & Transformational Change

Answer 42

🔹 Incremental Change: Definition: Small, gradual improvements or adjustments made over time. Pace: Slow and steady. Scope: Limited – affects specific processes or areas. Risk Level: Low risk. Examples: Updating software features. Tweaking a marketing strategy. Slightly improving customer service protocols. Goal: To enhance or optimize existing systems without major disruption. 🔹 Transformational Change: Definition: Major, radical shifts that significantly alter the way an organization or system operates. Pace: Fast or sudden. Scope: Broad – affects the entire organization or structure. Risk Level: High risk. Examples: Changing an organization’s mission or business model. Merging with another company. Adopting a completely new technology or process. Goal: To reinvent or drastically improve performance, culture, or direction.

Question 43

Coporate-Level Strategy Formulation

Answer 43

Focus & Goal Handled by CEO and senior management. Goal: Position organization effectively within its industry.

Question 44

Grand/Master Strategies

Answer 44

Growth – Expand operations, market share, sales. Methods: Acquisition, merger, global expansion. Risk: Expansion Trap – growth exceeds management capacity (e.g., Facebook hiring COO). Stability – Maintain current operations. Used when performance is strong or change is too risky. Ex: Retail firm stays in same markets. Renewal – Fix poor performance. Methods: Downsizing, restructuring, liquidation. Ex: Bankruptcy protection, selling assets. Combination – Mix of growth, stability, and renewal. Ex: Global and Mail downsized locally, invested in tech.

Question 45

Growth Strategies

Answer 45

Concentration – Grow in same business area (e.g., Tim Hortons, Roots). Diversification – Acquire new, unrelated businesses (e.g., PepsiCo buying Tropicana). Vertical Integration: Backward: Acquire suppliers (e.g., carmakers buy part manufacturers). Forward: Acquire distributors/retailers (e.g., Coca-Cola buys bottlers).

Question 46

Restructuring Strategies

Answer 46

Used for underperformance or over-complexity. Turnaround – Fix specific issues (e.g., McDonald's upgrades). Downsizing – Reduce scale (e.g., layoffs). Rightsizing – Downsizing focused on performance. Divestiture – Sell parts to focus on core business.

Question 47

Global Strategies

Answer 47

Globalization – Standard products/ads worldwide (e.g., Gillette). Multi-Domestic – Customize per country; local control (e.g., McDonald's local menus). Transnational – Combine global efficiency + local adaptation (e.g., Ford car platforms).

Question 48

Co-Operative Strategies

Answer 48

Strategic Alliance – Partnering for mutual benefit (common globally). Co-Operation – Collaborate with rivals (e.g., Daimler & BMW). Supplier Alliances – Strong supplier relationships. Distribution Alliances – Share distribution efforts.

Question 49

E-Business Strategies

Answer 49

Use internet for competitive advantage. B2B – IT connects suppliers, manufacturers, retailers. B2C – Connect directly to customers via web platforms.

Question 50

Strategic Portfolio Planning

Answer 50

Used by large, diversified firms (e.g., Tata Group). Allocate resources like managing investments. BCG Matrix: Analyzes units by market share & market growth.