3.10 - Organisational Structure

Question 1

Whats organisational/corporate culture and how types is there?
Culture is built up over no. yeasr as a result of which 4 influences?

Answer 1

Sums up spirit, attitudes, behaviours&ethos of orgnisation embodied in people woring there via traditions built up overtime (how poeple interaact&how things done over time)
1 Strong (healthy)
2 Weak (unhealthy)

• aim/mission of business
• behaviour of comany directors&other seniro staff (role models)
• attitude of senior managemnent to enterprise&risk
• recruitment&training procedures (eg/risk avser to suit culture)

Question 2

What factors does culture consist of?

Give 3 example of how cultre of a buiness is reeflected

Answer 2

• shared values of business
• beliefs&norms affceting every aspect f work life (noral way to act)
• behaviours of typical day to day behaviour (eg/ do managers sit sepeate from employees?)
• strnegth of culture determines how diff/easy it is how to behave in business (weak=dont know how to behave)

1 how employees recuited (which is more suitable, will they fit in with culture)
2 how work space&delegation/individual responsibility=roganised (formal set up eg/rows)
3 how staff call each other&methods&resposivness of organisation

Question 3

What sthe importance of organisational culture?

What are key charcteristics of the 2 types of organisational strcutres?

Answer 3

Is at heart of every business&can impact all stakeholders&decison making
Can impact on success of change anagemnet eg/if cultre happy with changes/regimental&resist change

1 STRONG/HEALTHY

• employees need less supervision (behvaiour natirally fits with compny values)
• focuses on customers real needs (staff actually belive in thing selling)
• attitude of “can do”=motivated=productive&feeling for organoisatopn as “us”&conviction orgnsiation=force for good(feel part of it not just have to for work&believe in product)
• loyal staff=low staff turnover

2 WEAK/UNHEALTHY

• dont share company values (dont believe on system/trying to achieve)
• have to be forced to compy with company values through policies&”must we” attitude (questioning)
• weak motivation&productivity=dont feel valued/part of it=high staff turnover

Question 4

Whic model identifies 4 types of organsiational culture? Explain it

Answer 4

Handy identifed 4 types
1 POWER (few key people at centre of organisation who make all major decisions, other employees refer to these to get decision made=common in small businesses where founder heavily involved&wants to keep close control, +those at centre have overview of everything done=quicker decision making&consisitent approach -as expands puts greatr pressure on centre=overload on key managers=slow decison making&stress so only effective in small departments)
2 ROLE (individuals=clear role, know who to report to&who responsible for, commonly adpated as business move from power culture&starts to formalise processes&procedures more&adopt fnuctional organisational strcuture, creating order, structure&certainty)
3 TASK (indiviudias identify with task working on&each persons importance depends on ability to contribute to particular project regardless of age/seniority/length of service-common where theres many projects eg/advertising businesses)
4 PERSON (individuals have own space&given own parts of business to control eg/exists in hospitals surgeons have independence +respects indivuduaks experise -not consistent&senior managers placing high level of trust in others in organsaition)

Question 5

Which model identofes 6 types of orgnsaitional culture?

Answer 5

Hoftsede idenified 4 (later 6) areas of national culture (diff people from diff parts of world have diff cultures eg/mediteranean=enthusiastic, party, open/British=reserved, formal, cautious)
1 POWER DISTANCE (considers extent inequality=tolerated&whether theres strong sense of position&status, high PD score=national culture accepts&encourages bureaucracy&high respect for authority&rank, low=encourages flatter structure&greater emphasis on personal responisibilty&autonomy)
2 INDIVIDUALISM/COLLECTIVISM (some societies value performance of indiciduals eg/American Dream, for others team performance=more important=have importnant implications for financial rewards at work eg/individual bonuses vs profit sharing for bigger groups)
3 UNCERTAINTY AVOIDANCE (considers diff attitudes to risk taking between countries-view anxiety in unkown situations, low UA=willingness to accept more risk, work outside rules&embrace change=more entreprenuerial national culture, high=more support for rules, data, clarity of roles&responsibilities=less entrepreneurial as consequence)
4 MASCULINITY VS FEMININITY (diff in decision making=M=hard edged, fact based&aggressive style, F=much greater degree of consultation&intuitive analysis)
5 LT VS ST ORIENTATION (concerned with diff emphasis national cultures have on time horizons for business planning, objectives&performance eg/Britain=increasingly impatient&want immediate rewards/Germany=dont mind suffering now bc will be better off-LT approach=implicates impact on decisons&risk taking)
6 INDULGENCE VS RESTRAINT (indulgence=society that allows relatively free gratification of basic&natural human drives related to enjoying life&having fun, restraint stands for society that suppresses gratification of needs&regulates it by means of strict social norms)

Question 6

Provide an example of a business with a strong/healthy business culture

Answer 6

WALT DISNEY

• intends to extend magical experience to employees&organisational culture
• pride, culture, wonderful community, amazing growth opportunity&creative atmosphere
• Disney only hires people who align with what they stand for&provide many employee benefits inc access to Mickey’s Retreat (exclusive area for cast members&families), generous discounts, incentive schemes&private healthcare=know company cares

KRAFT HEINZ

• after merger ruthless strategy of major job&expense cutting which worked ST=appears to have fatigued organization
• lots expected from employees making work/life balance challenging=11 hour days have become norm&toxic environment sums up culture (showed in no. employee reviews which screams red flag for any employee considering working there
• cant cut way to growth as wont create loyal, engaged employees with this mindset

Question 7

Hoftedes model idenified 4 (later 6) areas of national culture. What are the implactions of his work?

Answer 7

Reasons for change in organisaional structure, providing benchamrk - why should change to be more/less risky (eg/firm carries out own research&finds UA in firm=higher than UK nattional avg., might choose to do something about culture of risk aversion eg/encourage bonus for taking risk bc is culture affecting performance-too cautious/holding bcack?

Ways of changing organisational culture (possibly change balance of staff in terms of nationalities)

Problems of changing organisational structure (if national characteristics=as constant as Hofstedes work implies may be very diff to shift staff cultures eg/make chinese workers very reposnive to democratic but goes against culture=prefer being told what to do)

Plan for communications when: trading with intenational suppliers, expanding into new countries, during mergers/takeovers=recognise if implementing your culture would work
Good for multinationals: could help assess how proposed changes will affect employees in diff countries, can then adjust to changes to match diff cultures in diff countries-are cultures similar, will it work?

Question 8

What are the 6 influences on organisational culture?

Answer 8

1 Influence of founder (set visions&core values which shapes culture, reward systems&appraoch to decision making eg/Ikeas=modest,drove common car etc depite being billionaire)
2 Business size&complexity (as become larger&more comlpex perhaps inevitable its culture changed too eg/smaller=+informal approach to how things done, larger=more formal)
3 Rewards (reward system can have significant influence on culture eg/if routinely paid through bonuses have diff apprqaohc to dooing things than tgose just paid on salary-could encourage risk taking)
4 Industry/market (linked to influence of reward systems since often based on nature of industry/market eg/creative industries cultures shaped by need to encourage team work&innovation)
5 Organisational strcuture (structure adapts to reflect ways people in business find works best)
6 Work enviro (delibertely designed to support existing &/or deesired culture=physical enviro people work in msut influence culture at business=influences comm eg/work from home/sit togther/alone)

Question 9

A business wants to change its orgnsaitionsal structure because it needs to change strategic direction. To what extent do you think itll have to change leadership too to successfully change its culture?

Answer 9

Intro=in some, doesnt havent to change but does in most as likely to be important factor where business believes culture=cause of need for new strategic direction

One hand=most liekly needed in situtaions where existing culture=strong&existing leaders=liekly to resist new strategic direction, cultures often deeply engrained&power cultures where decision makking=limited to few in centre so liekly to resist due to self interest even if cultures damaging to business eg/failing to innovate, so new leader has greater authoruty to challenge way things=done&comm. why new culture=important for successful strategic direction eg/might encourage democratic decion making, new leader maybe successful if use comm&education etc but depends on recruiting right person so better chance if have experience from elsewhere&strong personal skills to persuade

Other hand=culture change=diff&no gurantee new leader will be +successful than existing, in mnay cases culture will outlast any particular leader eg/business may have culture strongl influenced by founder, has ways of doing things understood&accepted by all, new leader may face resistance too so might be better to support existing leader as know business well, have good undetndin of where resistance may arise&overcome so might just need approp. support&incentive to lead culture change

Question 10

What are 4 main reasons why a business may wants and/or need to change its organisational strcuture/

Answer 10

1 Business performance (when threat of business survial=sign things need to change inc. culture eg/become complacent about need to innovate&lost edge so competitors now have advantage)

2 New leadership/strategy (new leader often align change in strategy with call for change in culture usually bc existing identified as potential restraining force reucing chance of successful change in managennt)

3 Change in external enviro (ext. shocks=powerful facilitor of cultural change eg/financial crisis showed cultural change needed in firms taht survived-culture of reward&excessive risk taking)

4 To support change management (new leadership&existing managers identify need for change as part of change initaives designed to improve competitiveness eg/change culture to change something else eg/change from centralised to decentralised to change how business communicates)

Question 11

What are 5 reasons why changing organisational structures can be difficult?

Answer 11

Reluctance of staff to change/entreched attitudes
Staff dominated by certain type eg/MC men
All staff&middle managemnt must believe changes going to happen&is right one
Messge msut be clear&consistent
Sometimes change in culture isnt needed&is unsuccessful

Question 12

What is strategic implementation?

What are the 5 stages in a strategic planning process?

Answer 12

Change=unavoidable so strategy to implement required change=vital for success, inc:
Putting plans into action (to achieve goals)
Plan then put ino practice&executed properly

1 senior managers set LT corporate objectives based on overall aims/missions
2 analysis of internal position of business to identify strengths&weaknesses (SWOT)&analysis of external enviro to identify opp.&threats (PESTEL)
3 develop various strategies to meet corporate objectives, evaluate each, then choose which best fits business
4 plan out how strategy will be implemented (inc outline functional objectves for each department&resources needed)
5 set up process for monitoring&evaluating strategy as its implemented

Question 13

What are 3 factors influencing the planning of a strategy? Include models&tools which help with each planning stage

Answer 13

1 Analysis of internal&external fatcors (eg/finance=efficiency ratios, resources)

• SWOT/PESTEL
• Porters 5 force
• Balanced scorecard

2 Analysis of risk&feasabiililty (possible to carry out-is there right resouces&skills?)

• Decison trees
• Investment appraisal&sesnitivty analysis
• Stakeholder mapping

3 Developing contingency plan
-outlnie what to do if something unexpected happens eg/crisis/change in demand etc (impoaaible to plan everything but consdier how likely something=to hapen/howbad itll be if did) aka crisis managemnet&maangers have to repsond where contingency plan helps decisoion making (managers need quick decsions to limit damage possibly best achieved through autocratic)

Question 14

Strategic planning creates a strategy

What are the advnages adn disadvantages of strategic planning?

Answer 14

+ Can help give clear direction&communicate to all exactly what business is trying to achieve
+ Makes manages think of SWOT (helps match strategy to situation)
+ More useful in stable market (can be followed through)

• Strateguc planning can restrict flexibility (become scared of change&stick with strategy but somethong changes so no longer useful)
• Possibly based on inaccurate info so plan=inaccurate
• Not useful to innovative business es who constantly need to respond to change (emeergent stratgey may be more suited=develop sragey constantly to changes)

Question 15

Whast the valuue of leadership in strategic implementation?

Answer 15

Good leader can take action to make sure implemenetation of strategy (usually requiroing changes) will go as smoothly as possible

Good leader should:

• take overall ewposnibility for management of strategic implemenetauion construcing clear visison&explanation of steps to get there&set example
• appoint right managers&delegate resposnisbilties fro diff elements where necessary
• motivate allto enageg in proocess by creating positive culture&keep going in difficult ST
• leadership style adopted=important in maanagemnent of chnage

otter&Schlesinger can be used to explain barriers to chnage neeeding effective leadership&6 ways of overcoming them

Question 16

Is new leadership a requirement of change/implementing a new organisational strategy?
Give a reason why an external leader may be necesary and why not

Answer 16

One reason why new external leadership IS essential in order for business to achieve successful change is that change required is likely to have arisen bc of inappropriate strategy by previous leader, indicating new direction is required (bc leadership becomes complacent&assumes previous business success will continue despite changes to nature of competition=business may lack investment in innovation=lead to business losing its competitive edge, either bc its costs=too high/it lacks innovation required to keep up with more agile competitors so existing leadership needs replacing, ideally by leaders who havent allowed business to drift off course=new strategy needs new perspective most likely to come from new external leader)

DONT need external leadership to achieve successful change bc internal leaders=just as capable of driving successful change as external leader=new leader drawn from existing business=more likely to have in-depth experience of business, both in terms of its competitive strategy&important organisational cultural issues that need to be considered as part of change-taking culture argument further=leader with deep experience in business will understand what Handy called “the way we do things around here”, a leader immersed in existing organisational culture ought to be better placed to understand key internal forces resisting change&identify strategy to overcome them by bringing whole organisation with him/her

Question 17

Whats the value of communications in strategic implemenetation?

Answer 17

Purpose of comm is to pass ideas, info&motivate people eg/fucntional objectives to department managers, coordinate activities, employee needs told how strategic change will impact their role&resposnibility

Question 18

Whats the importance of organisational strcuture ins tartegic implemenataion?

Answer 18

Firms structure=how set up&organsied in terms of people, fucntions&departments

• organisational charts can be used to show levels of authority, hierarchy&lines of comm.
• based on stragey being i lemented may need to change organisational strcture

4 types:
-Functional (by departments)
+employees with same skills&expertise work together=implementing strategey=easier
-lead to rivalry between departments (each may have own culture&focus on own priorities-if comm. isnt good between itll be hard to comm. strategy)
-Product based (built around)
+ideal if strategy=focused on individual products eg/grow MS of 1 product
-unnecessary duplication of rules=inefficient
-Regional (diff areas in countries)
-Matrix (mix-business can be interchangeable)

Question 19

What are the 4 types of organsaitional strcture?

Incklude an advantage and disadvantage of each

Answer 19

1 FUNCTIONAL STRUCTURES (orgnaise staff by department)
+ employyes with same skills&expertise work together, making implementing strategy easier
- can lead to rivalry between departments (each have own culture&focus on own priorties, if comm. isnt good between deprtments tll be hard to commmuniacte stargyety)

2 PRODUCT BASED STRUCTURES (organise satff by product=each product has own division, director, makreting team etc)
+ ideal is strategies=focused on individual products eg/grow market share of 1 product&keep market share steady of another)
- unnecessary duplictaion of roles=inefficint

3 REGIONAL STRUCTURES (orgnanise staff by geoegraphical location)
+ tend to suit market development strategy (if diff markets demand diff things, a business can=decentralised&adapt to local needs)
- unnecessary duplication of roles=inefficient

4 MATRIX STRUCTURES (organsie staff by combo of fcators eg/project&function)
+ staff have clearly defined objectives&it encourages departments to build up relationships
- poosible conflict(eg/project&department mnagers might have diff ideas about how strategy can be implemented)

Question 20

What is network analysis?

Answer 20

Complex roject broken into series of activites to help identify critical path aka activities requiring most careful management&scrutiny (so strategy=implemeneted cost efficiently&on time)
Critcical activiities if delayed=whole project delayed

Order&sequence which activitise must be performed in=worked out&duration of each=estimated

Then arranged as network/graph showing whole project from start to fionsish&showing which tasks can be performed at same time&shortest time required from strat to finsh=identified (get project completed asap)

Question 21

Network analysis includes breaking a complex roject into a series of activites to help identify the critical path
What does the essential techniques include to construct a moel of a project?
Using that info what does ir calculate?

Answer 21

1 list of all activities required to complete project
2 duration eacha ctivity takes to completion
3 dependenciies between activities (eg/cant cook bacon without heating grill first)

1 longest path of planned actiities to end off projwct
2 earliest&latest each activity can strat&finish without making project longer&parallel activities (can be done at same time)

Calculating EST (eariest start time) prvdes 2 key bits of info:
-earliest date certain resources needed (skilled workers, raw materials, machinery etc avoids tieing up working capital unnecessarily)
-earliest completion date for whole project (ensure youre prepped eg/stock on shelves when campaign goes out)
Calculating LFT provdes 3 kety bits of info:
-provides deadlines that musyt be met for project to be completeed on time
-heklps identify actovities with float time (slack between EST&LFT)
-identifies critical path

Question 22

Network analysis includes breaking a complex roject into a series of activites to help identify the critical path
What are critical paths/activties?
What is float time?

Answer 22

Critical path=no float time (if overrun, expected duration will be extended)
-by identifying it managers can apply management by exception (focus on excpetionally important tasks instead of spreding efforts thinly)

Float time=how long can be delayed wihtou tmaking project longer (important for amnagers to identify bc these can have flexibility eg/start it later)&are only non critical activuties
Total float(time can delay any activity without delaying completion)=LFT-duration-EST

Question 23

Network analysis includes breaking a complex roject into a series of activites to help identify the critical path
Give advantages and limitations

Answer 23

+ Helps reduce risk&costs of complex projects by encouraging careful assessmnet of requirements of each activity in project
+ By identifying activities that can be completed simulatnously, reduces total project time=time based managemnet (important if trying to get product out first for comptitive advantge
+ Help spot activities with some slack/float so can transfer some resources creating better alloctaion of resources
+ Resources/stock ordered no earlier than scheduled EST so cash outflows=delayed as long as possible (good forworking capital managemnt)=JIT
+ Decision making AND planning tool in 1
+ Providse useful overview of complex project (if somethings delayed, netwrok diagram=good strating point for wokring out implications&alt course of action, network can be amended throughout project)
+ Links well with other aspects of business planning inc cash flow forecasting&budgeting

• Reliability largely based on acccurate estiates&assumptions
• Doesnt guarantee success of a project (still needs mnanaged properly)
• Resources may not actually be as flexibiie as mnagement hope when come to address network float
• Too mnany axctivities make netwrok diagram too complicated (activities as selves broken into mini projects)
• Might be tempting for employees to cut corners to meet tight deadlines on critical activities=quality suffers
• Doesnt tell anything about costs/returns from strategy/project

Question 24

What are the 5 difficulties with strategic decision making?

Answer 24

RISK (difficult to acount for unknowns/difficult to figure out which bits=risky)

EXTERNAL ENVIRO (onstantly changing)

INTERNAL ENVIRO (changes)

FEASIBILITY DIFFICULT TO JUDGE (info needed on rsources, skills&time available)

STAKEHOLDERS (often want diff things)

Question 25

What are the difficulties with strategic implementation?

Answer 25

Lack of resources (moeny,time,skills as heavy investemnt may mean less working capital)

Managaers at all levels need to understand strategy&each may have diff interpretation

Witout string, clear leadership&comm. employees may not embrace changes required

Assumptions mayve been made about resoucres needed&lenght of time of tasks

Changing structure&/or culture can be diff

Lack of flexibility in strategy may cause problems if envrio changes

Question 26

Outline a case whch had difficulty with stratgic decsion making and implementation
Why did their strategy fail?

Answer 26

MORRISONS (Septemeber 2010)

• announced would operate no. smaller stores called M locla in major places eg/Birmingham (would have simila format to small TescoExpress&Sainsburys Local stores but inc wider range of ready to eat hot food&salad bar)
• items sttocked by nearby Morssions superstore&shopppers able to order food in inc fresh meat&fish
• around 70 shops opened by end of 2013, boosted by purchase of 7 Jessops, 6 HMV&49 Blockbuster premisies from admnistarators
• 2015, 6 unrofitiable convencience stores closed&roll out of chain=slowed&announced closure of further 23 loss making Mlocal stores
• by 2017=none

More of emergent than planned strategy

1 May be implementation probelm (perhaps related to store location eg/Jessops etc located in city centres but Sainsburys&Tesco located next to houses, pubs, stations etc so access=easy&can just pop in)
2 Rapid expansion (from 1-150 stores in 2 years=too ambitious=mistakes inevitable as everything not throroughly thought through, perhps tried to rush imlpementation to catch up)
3 Decision makers to blame (was it just to catch up?)

Question 27

In relation to further difficulties of strategic decsion making and implenetation, theres 2 types of strategy: planned&emeergent
Outline planned strategues and include 4 disadvanatges

Answer 27

Planned out before actions=taken to implement it

Linked to Porters ideas on satregy&competitive advantage (5 forces&generic strategies)
Strategy=owned by business leaders (planned by direvtors who expect senior managers to implement the strategy so comm.=important)
Possible issue with planned=undpredictable power of market place business actually operates in=cant always plan

• planning costs time&money
• plan will gradualy become outdated (think too long before releasing/launching esp. if=too detailed&theortical=time wasted)
• senior managers could be out of touch with whats going on in businesss world (far from customrs)
• managers can be too concerned with anaylsing data so strategy=too rigid stopping creativity&innovation (some of best decisions=gut instinct)

Question 28

Outline a business example which spent too much on planned strategy and failed

Answer 28

XBOX 1
Strategy=to be family enertainment console&be only 1 thing family needed eg/gaming, watch TV, listen to music etc (all in 1) = spent years&lots of moeny planning

Wring about what market wanted
Playstation 4 came out same time&rejected this saying theyre just for gaming created “for the players”

Question 29

In relation to further difficulties of strategic decsion making and implenetation, theres 2 types of strategy: planned&emeergent
Outline emergent strategues what benefit do they provide and include 4 disadvanatges

Answer 29

Strategy emerges from circumstances rather than being controlled&rgid

Will be plan at start but chaning circumstances=likely to force plan to change
Managers must have speed of thought&decision making powr to react to an ever changing world

+ May solve many of problems with planned strategies
Save time&money that wouldve been spent on startgic planning
Stay relevant&can adopt to changing enviro (dont become outdated)
Relies more on junior managers making decisions who may have more up to date info&more info on employees&resources=wholl be most suitable for diff tasks (lower ranking empployees will also have say as they deal with middle managers)

• might not be clear what end goal is
• those at top of company may have little idea about whats actually going on
• difficult for large companies bc of comm.&coordination problems so need written&shared plan (easier if structure=flat=less hierarchy, wider span of control&bettr decsion making)

Question 30

In relation to why stratgies fail, what is strategic drift?

Briefly outline details in diagrm thats used to demonsatrte this process

Answer 30

Occurs when strategy pursued by business no longer fits with enviro around it (conditions=changed=something no longer appropriate)
Happens when business strategy doesnt adapt to keep up with changes in business enviro
Business will end up in state of flux (managers uncertain what to do as have fallen so far behind trends in market) so at this point either make major transformational change/business dies

Usuall arsies from combo of factors inc:

• business failing to adpat to changing external enviro eg/social/tech change
• discovery that worked before doesnt wrok anymore (in terms of competitiveness)
• complacenecy sets in (often built on previous success which managment asssumes will continue)
• senior management deny theres a problem, even when faced wiht evidence (probably bc they came up with plan, investing lots of time&moeny=pride=hard to dmit wrong which wold prevent further damage&loss)

Diagram highlights how as chnge in enviro increases, businesses’ satregy may become increasingly inapproprtiate (axis=amount of change&time)
4 phases=incremental change, strateguc drift, flux, transformational stage/demise

Question 31

Strategic drift occurs when strategy pursued by business no longer fits with enviro around it
Outline details of the diagram used to demonstarte strategic drift

Answer 31

Diagram highlights how as chnge in enviro increases, businesses’ satregy may become increasingly inapproprtiate (axis=amount of change&time)

4 phases:
1 Incremental change (little signif. cahnge in external envrio so series of small changes to strategy enable business to remian in touch with external enviro=keeping pace)
2 Strateguc drift (rate of change in external enviro=acceleerating&small changes not enough to remian iin touch=business losing competitive advanage)
3 Flux (characterised by management indecision&signif. gap between what market expects&whta business=delivering, managemnt may have recognised gap&begun to alter strategy but no decisive improvment&may be disagreement between senior managemnt team about how to address whats now signif. strategic drift aka panic&try quick fixes)
4 Transformational stage/ demise (moment of trutth=mnagemnent either recognise need for transformational change in strategic direction/business fails-often takes external leadership for this recognition to be made&relevant strategic change programme implemented, for soe this phase comes too late)

Question 32

Satretigc drift occurs when strategy pursued by business no longer fits with enviro around it
Outine 2 cases of business whove suffred strategic drift

Answer 32

BLOCKBUSTER (dvd rentals)
Netflix terrified of going out of business&doing posting dvd service=making loss so met with BBin hope theyd take them over&be BBs online arm (knew wanted to do online streaming-get it when&where you want, never out of stock, no ads, watch as many/mushc as like like book&previously nothing giving intant access- but needed tech&peoples increased access to ttech to make ideas profitable)
BB=old tech&fursttrted ccutomers as new releases always out of stock
BB didnt want to invest money as feared potential takeover of them so kept with existing format not recognising change&changing demand (“we’re good existing business with many existing stores, why disrupt it to set up maybe stores”)

NOKIA (tech&phones)
Lost dominant global arket leadership in movile phoens by failing to reposnd to samrtphone tech (“our phones=best, people dont want touchscreen etc”=didnt see need for change but couldve been better than Apple&Samsung)

Question 33

In relation to why stratgies fail, what is divorce of ownership and control and what problems does this cause?

Answer 33

Small business=no divorce of ownership&control

Larger businesses eg/plcs =divorce of ownership&control btween shareholders&directors of business (controlling in shareholders intersts)
-causes prblem for implementation of strategy bc business will have diff groups with diff interests/ideas/views eg/shareholders=dividends&maximising profit managers=growth aka conflicting interests

Corporate governance escribes ower structure of business (who has power&drives it)
When ownership&control=sepaprate, cmopany could have many internal&external stakeholders with many diff intersts all competing for infuence on strategy (power struggle&conflict)
Eg/board of directors decide strategy but shareholders appoint board so choose who want to run business, so hareholdesr can influence strategy by appointing those who hare interest
External shareholder cam influnce by influencing internal stakeholders eg/trade union call strike if dont agree with strategy bc there for wrokers interests not owners=conflict

Question 34

In relation to strategies failing as a result of divorce between ownership and control causing conflicting inteterests
Corporate governance escribes ower structure of business (who has power&drives it)
Outline a case where theres been an issue in coroportate goverenance

Answer 34

SPORTS DIRECT

• has strained relationship between Board of Sports Direct plc&shareholders (institutional shareholders becoming increasingly agitated about way business is being run by Board of Directors)
• have come under fierce criticism&scrutiny for its working practices in recent months&external shareholders whove formed “activist” group now linking way business=ran (corporate governance) with business performance, claiming governance failings=clearly resulting in declines in operating performance&LT shareholder value”
• believe new skills, talent&expertise needed as current bod arent up to job

Question 35

What is strategic performnace? How is it evaluatedby businesses?

Answer 35

Outcomes of strategic decisions
Measured using measures within corportate objectives eg/profit performance-have we met target of…. However timescale=important
WHY
-strategies need constantly reviewed as they go
-managers must monitor if all parts of firm are meeting targets/sticking to budgets
-plans inc deadlines when objectives should be met (actual perormance can be compared with plan)
-competitive enviro needs closley monitored so external factors tht could lead to strategic drift can be spotted
-reasons behind targets/objectives not being met must be identfied&action taken to remedy situation

Question 36

Strategic performance is the outcomes of strategic decisions

Which 4 techniques are used to monitor performance?

Answer 36

1 constant primary&secondary market research&analysis (show if assumptions about market=correct)
2 audit sales levels=analyse diff between expected&actual sales
3 managemnt info systems=computer systems that constantly collect data which can give picture of current sate of business
4 managers can use prediction techniques eg/extrapolation to interpret data (why was there a peak-weather, laws? comptitors enetered?)

Question 37

What is the value of strategic planning?

What is and what is the value of contignecy planning?

Answer 37

Planning=2 parts:
Planning ow strategic deciion will be carried out
Planning how to make decision work

C=outline what to do if something unexpected happens eg/crsis event (all should have 1 to prevent detrimental failure)
Impossible to plan for every event so cosinder how liklwy something is to happen how bad itd be if it did
What if questions asked&no. scenarios consdered
Could help decsioin making