Week 10 Flashcards
(19 cards)
focuses on identifying and evaluating a firm’ s strengths and weaknesses in the functional areas of business, including management, marketing, finance/accounting, production/operations, research and development, and management information systems.
Internal Audit
A firm’ s strengths that cannot be easily matched or imitated by competitors are called ________________________, Building competitive advantages involves taking advantage of distinctive
competencies.
distinctive competencies.
Strategies are designed in part to improve on a firm’ s weaknesses, turning them into strengths— and maybe even into distinctive competencies.
Internal Audit
the process of performing an ______________ provides more opportunity for participants to understand how their jobs, departments, and divisions fit into the whole organization.
Internal Audit
A key to _____________________ is effective coordination and understanding among managers from all functional business areas.
organizational success
internal resources are more important for a firm than external factors in achieving and sustaining competitive advantage.
The Resource-Based View (RBV)
view contend that organizational performance will primarily be determined by internal resources that can be grouped into three all-encompassing categories: Physical resources, Human resources and Organizational resources
The Resource-Based View (RBV)
For a resource to be valuable, it must be either (1) rare, (2) hard to imitate, or (3) not easily substitutable.
These three characteristics of resources (empirical indicators) enable a firm to implement strategies that improve its efficiency and effectiveness and lead to a sustainable competitive advantage.
The Resource-Based View (RBV)
An ____________________________ summarizes and evaluates the major strengths and weaknesses in the functional areas of a business, and it also provides a basis for identifying and evaluating relationships among those areas.
Internal Factor Evaluation (IFE) Matrix
Five Steps in Developing IFE Matrix
Step _____List key internal factors as identified in the internal-audit process. Use a total of from 10 to 20 internal factors, including both strengths and weaknesses. List strengths first and then weaknesses. Be as specific as possible, using percentages, ratios, and comparative numbers.
Step 1
Five Steps in Developing IFE Matrix
Step ____. Assign a weight that ranges from 0.0 (not important) to 1.0 (all-important) to each factor.
The weight assigned to a given factor indicates the relative importance of the factor to being successful in the firm’ s industry.
Regardless of whether a key factor is an internal strength or weakness, factors considered to have the greatest effect on organizational performance should be assigned the highest weights.
The sum of all weights must equal 1.0.
Step 2
Five Steps in Developing IFE Matrix
Step ___. Assign a 1 to 4 rating to each factor to indicate whether that factor represents a major weakness (rating = 1), a minor weakness (rating = 2), a minor strength (rating = 3), or a major strength (rating = 4). Note that strengths must receive a 3 or 4 rating and weaknesses must receive a 1 or 2 rating. Ratings are thus company-based, whereas the weights in step 2 are industry-based.
Step 3
Five Steps in Developing IFE Matrix
Step ___ Multiply each factor’ s weight by its rating to determine a weighted score for each variable.
Step 4
Five Steps in Developing IFE Matrix
Step ___. Sum the weighted scores for each variable to determine the total weighted score for the organization.
Step 5
Five Steps in Developing IFE Matrix
Step 1. List key internal factors as identified in the internal-audit process.
Use a total of from ___ to ___ internal factors, including both strengths and weaknesses.
List ________ first and then ______________. Be as specific as possible, using percentages, ratios, and comparative numbers.
10 to 20
strengths
weaknesses
Five Steps in Developing IFE Matrix
Step 2.
Assign a weight that ranges from ____ (not important) to ____ (all-important) to each factor.
The weight assigned to a given factor indicates the relative importance of the factor to being successful in the firm’ s industry.
Regardless of whether a key factor is an internal strength or weakness, factors considered to have the greatest effect on organizational performance should be assigned the highest weights.
The sum of all weights must equal ____.
0.0 & 1.0
=1.0
Five Steps in Developing IFE Matrix
- Assign a 1 to 4 rating to each factor to indicate whether that factor represents a _____________ (rating = 1), a ______________(rating = 2), a
_____________ (rating = 3), or a ______________(rating = 4).
Note that _________ must receive a 3 or 4 rating and ___________ must receive a 1 or 2 rating. Ratings are thus company-based, whereas the weights in step ___ are industry-based.
major weakness
minor weakness
minor strength
major strength
strengths
weaknesses
2
Five Steps in Developing IFE Matrix
- Multiply each factor’ s weight by its rating to determine a ______________ for each variable.
weighted score
Five Steps in Developing IFE Matrix
- ______ the weighted scores for each variable to determine the total weighted score for the organization.
Sum
