3. The Internal Organization Flashcards
Resources are a foundation for ______.
strategy
Unique bundles of resources lead to ____________.
competitive advantages
What is “smart growth”?
A firm’s ability to manage needs to grow and growth itself.
Sustainability of a competitive advantage depends on which 3 factors?
1) Rate of core competence obsolesce because of environmental changes.
2) Availability of substitutes for the core competence.
3) Imitability of the core competence.
Core rigidities prevent firms from developing new _____________.
competitive advantages
Define a ‘global mindset’.
Ability to manage an internal organisation without depending on assumptions about a single country, culture or context.
Resources are the source of ____________________.
capabilities that develop core competences or competitive advantages.
Value is measured by ___________.
a product’s performance and attributes to which customers are willing to pay for.
Exploiting core competences creates _________ for customers.
value
Firms create value by ________________.
bundling/leveraging resources and capabilities.
Firms’ most important sources of competitive advantages are _____________.
core competences and product-market positions
True or false: One half of organisational decisions fail.
True
3 conditions that affect managerial decisions about resources, capabilities and core competencies:
1) uncertainty
2) complexity
3) intraorganisational conflicts (among managers within organisation)
What is judgement?
The capability of making correct decision when no models/rules/data are reliable or complete.
GE managers’ ability to exercise good judgement is seen in two ways:
1) GE created more value for its stakeholders than other companies.
2) Former GE managers are now CEOs of other companies.
Tangible resources are ______________.
assets that can be observed and quantified
Intangible resources are ______________.
assets that are difficult for competitors to analyse and imitate
List four types of tangible resources.
1) financial
2) organisational
3) physical
4) technological
List three types of intangible resources.
1) human
2) innovation
3) reputational
List two financial resources.
1) borrowing capacity
2) ability to generate internal funds
List one organisational resource.
Firm’s formal reporting structure; formal planning, controlling and coordinating systems.
List two physical resources.
1) sophistication and location of a firm’s plant and equipment
2) access to raw materials
List one technological resource.
Stock of technology (patents, trademarks, copyrights, trade secrets).
List four human resources.
1) knowledge
2) trust
3) managerial capabilities
4) organisational routines
List three innovation resources.
1) ideas
2) scientific capabilities
3) capacity to innovate
List five reputational resources.
1) reputation with customers
2) brand name
3) perceptions of product quality, durability, reliability
4) reputation with suppliers
5) interactions and relationships
Intangible resources are usually more ________.
sustainable
What are core competencies?
Capabilities that give competitive advantages.
It is recommended to have ____ core competencies per strategy.
3 to 4
What are two tools that identify and build core competencies?
VRIN model and Value Chain model.
What does the VRIN model stand for?
Value, rare, imitable, substitutable.
True.
Core competencies are capabilities, but not all capabilities are core competencies.
What does a valuable capability do?
Helps firms neutralise threats or exploit opportunities.
What does a rare capability entail?
It is not possessed by others, or only by few.
What are three aspects of inimitable capabilities?
1) Historical: unique organisational culture or brand name
2) Ambiguous cause: the causes and uses of a competence are unclear.
3) Social complexity: interpersonal relationships, trust
What does a non-substitutable capability entail?
It has no strategic equivalent.
What are performance implications of a competitive disadvantage?
Below-average returns
What are performance implications of a competitive parity?
Average returns
What are performance implications of a temporary competitive advantage?
Average to above-average returns
What are performance implications of a sustainable competitive advantage?
Above-average returns
What does a Value Chain Analysis do?
Helps identify parts of operations that create value and those that do not.
What are the two categories the Value Chain Analysis consist of?
Primary and secondary activities.
What are the five primary activities of value chain?
1) Inbound logistics
2) Operations
3) Outbound logistics
4) Marketing & Sales
5) Service
What are the four support activities of value chain?
1) Firm infrastructure (general management, finance, accounting, etc.)
2) Human resource management
3) technological development
4) Procurement
Creating value from value chain activities often requires alliances with _________ and strong relationships with __________.
suppliers , customers
What is outsourcing?
The purchase of a value-creating activity from an external supplier.
Why do companies outsource?
Few companies have competitive advantages for all primary and supporting activities.
Companies can focus on core competencies.
What are consequences of outsourcing?
- potential loss of firm’s innovative ability (although companies can also learn from then)
- loss of jobs within firms
-
What generates inertia?
Emphasising a core competence that is no longer competitively relevant, causing weakness.
