1 - Concept of strategy

Question 1

Increasingly, the resources and capabilities of the firm became regarded as

Answer 1

the main source of competitive advantage and the primary basis for formulating strategy.

Question 2

Disruptive technologies and accelerating rates of change have meant that strategy has become

Answer 2

less about plans and more about creating options for the future, fostering strategic innovation and seeking ‘blue oceans’ of uncontested market space.

Question 3

strategy is

Answer 3

the means by which individuals or organizations achieve their objectives

Question 4

Corporate strategy defines

Answer 4

the scope of the firm in terms of the industries and markets in which it competes.

Question 5

Business strategy is concerned with

Answer 5

how the firm competes within a particular industry or market. If the firm is to prosper within an industry, it must establish a competitive advantage over its rivals. Hence, this area of strategy is also referred to as competitive strategy.

Question 6

Collis and Rukstad identify a hierarchy of strategy statements:

Answer 6

1. The MISSION statement: basic statement of organizational purpose; it addresses ‘Why we exist’.
2. A statement of PRINCIPLES or values: outlines ‘What we believe in and how we will behave’.
3. The VISION statement: ‘What we want to be’.
4. The STRATEGY statement: ‘What our competitive game plan will be’.

Question 7

Intended strategy is

Answer 7

strategy as conceived of by the top management team.

Question 8

Realized strategy is

Answer 8

the actual strategy that is implemented – is only partly related to that which was intended.

Question 9

Emergent strategy is

Answer 9

the decisions that emerge from the complex processes in which individual managers interpret the intended strategy and adapt to changing external circumstances.

Question 10

Planned emergence is

Answer 10

strategic planning combines design and emergence.

Question 11

Strategy occupies multiple roles within an organization

Answer 11

1. STRATEGY AS DECISION SUPPORT: pattern or theme that gives coherence to the decisions of an organization.
2. STRATEGY AS A COORDINATING DEVICE: coordinating the actions of different organizational members
3. STRATEGY AS TARGET: is concerned not only with how the firm will compete now but also with what the firm will become in the future
4. STRATEGY AS ANIMATION AND ORIENTATION: animate & orientate individuals so that they are mobilized, encouraged

Question 12

Bounded rationality is

Answer 12

decision analysis is subject to the cognitive limitations that constrain all human beings.

Question 13

Stakeholder approach to the firm is

Answer 13

the view of firms as:

coalitions of interest groups where top management’s role is to balance different, often conflicting, interests

Question 14

Stakeholder analysis is

Answer 14

identifying, understanding and prioritizing the needs of key stakeholders.

Question 15

CSR (corporate social responsibility) answers the question

Answer 15

What are a company’s obligations to society as a whole?

Question 16

Strategic fit is (For a strategy to be successful)

Answer 16

it must be consistent with the firm’s external environment and with its internal environment – its goals and values, resources and capabilities and structure and systems.

Question 17

Corporate strategy decisions include

Answer 17

investment in diversification, vertical integration, acquisitions and new ventures; the allocation of resources between the different businesses of the firm; and divestments.

Question 18

Strategy:

Answer 18

deploying resources to establish favorable position

Question 19

Tactic:

Answer 19

scheme for a specific action / means of achieving a strategy