BST Flashcards
What is corporate governance?
This is to do with the direction and control of the company that also helps determine the structure of the business, its objectives and relationship between management, board of directors and shareholders.
Responsibilities fall on the Board collectively. Good corporate governance requires the directors to put in place a risk management strategy.
Explain Lewin Schein’s iceberg model
Change Management Model:
- Unfreeze existing behaviour
Consult stakeholders and make the case for the change clear - show the benefits. - Change
Implement the change and provide ongoing support and communication. - Refreeze
Reinforce the new habits and celebrate the outcome of the change.
What does the value chain analysis cover?
Primary activities:
- inbound logistics
- operations
- outbound logistics
- marketing and sales
- service
Support activities:
- Firm infrastructure (organisational structure)
- HR management
- Technology development
- Procurement
What is the TEF framework?
Transparency - would I mind people knowing what I have decided?
Effect - Who does the decision affect or hurt?
Fairness - would the decision be considered fair by those affected?
Explain Lewin Schein’s iceberg model
Change Management Model:
- Unfreeze existing behaviour
Consult stakeholders and make the case for the change clear - show the benefits. Give people time to get used to the idea. - Change
Negotiate, implement the change and provide ongoing support and communication. Involve them here so they are less resistant. - Refreeze
Reinforce the new habits and celebrate the outcome of the change. +ve and -ve reinforcement.
What factors affect centralisation/decentralisation?
- mnagaement style (e.g. authoritarian)
- size of organisation
- extent of diversification
- speed of technological advancement
- geography of locations
- extenet of local knowledge needed
What factors affect centralisation/decentralisation?
- mnagaement style (e.g. authoritarian)
- size of organisation
- extent of diversification
- speed of technological advancement
- geography of locations
- extenet of local knowledge needed
Describe the Mintzberg organisational structure
It can be described as five distinct componenets which operate within the sixth component - the ideology of the organisation.
Strategic apex - responsible to the organisation’s owners.
Middle line - middle managers that connect apex to operators.
Operating core - members who perform the actual work.
Technostructure - e.g. accountants, IT etc. Affect certain forms of standardisation in the organisation.
Support staff - they have no control over the work of the operating core (unlike technostructure).
What factors affect centralisation/decentralisation?
- managaement style (e.g. authoritarian)
- size of organisation
- extent of diversification
- speed of technological advancement
- geography of locations
- extent of local knowledge needed
Describe the Mintzberg organisational structure
It can be described as five distinct componenets which operate within the sixth component - the ideology of the organisation.
Strategic apex - responsible to the organisation’s owners.
Middle line - middle managers that connect apex to operators.
Operating core - members who perform the actual work.
Technostructure - e.g. accountants, IT etc. Affect certain forms of standardisation in the organisation.
Support staff - they have no control over the work of the operating core (unlike technostructure).
What are the advantages and disadvantages of a matrix structure?
Advantages:
- offers greater flexibility
- improves communication within organisation
- gives a dual perspective
- encourages inter-disciplinary cooperation
Disadvantages:
- could be conflict between two manages
- accountability to two people could cause stress
- requires consensus and agreement which may slow down decision making
What is data analytics?
The process of collecting, organising and analysing large sets of data to discover patterns and other information the business can use to make decisions.
What is a good model for assessing project options?
Suitability - whether it is in line with the strategic objectives of the company, their ethos, vision, mission etc
Acceptability - what are the expectations associated with it? Look at the risk and returns - is this acceptable to stakeholders/shareholders?
Feasibility - does the business has the competencies, funding, time and resources to effectively implement the project?
What is the difference between stratetigic planning and strategic management?
Strategic planning = top down
- start with an internal analysis to come up with the mission and objectives, and then implement the strategy.
- set the goals first, then design strategies to achieve them
- more controlled and predicted
Strategic management - bottom up (emergent)
- strategy is based on the external environment
- empowers managers to develop and adapt strategies as circumstances change and opportunities arise
- strategic choice and implementation happen concurrently
How can we define the relationships we hold with stakeholders?
Map their power and interest - Mendelow’s matrix
Low interest, low power (casual labour) - minimal effort
Low interest, high power (govt) - keep satisfied
High interest, low power (small, local suppliers) - keep informed
High interest, high power (main suppliers, key employees)
What are the limitations of using Porter’s five forces?
- ignores role of the state
- positioning view, not resource-based
- not helpful for not-for-profits
- ignores potential for collaboration
What are the 5 stages of the industry life cycle?
Introduction - sales are low, need to monitor competitor products and attract adoption. Innovation is key.
Growth - sales increase, need to maintain barriers to entry, consider expansion and lowering costs.
Shakeout - slower growth, increasing rivalry. Weaker firms do not succeed. Firms may seek potential merger candidates and extend growth.
Maturity - standardised product by this point, and high entry barriers. Firms need to defend their positions through maintaining market share and pricing strategies.
Decline - margin pressure pushes the weaker candidates out of the industry. Obsolescence and evolving markets negatively impact demand. Firms should look towards the best time to exit and exit strategies.
What are the benefits of a value chain analysis?
- can compare those of competitors to identify sources of differentiation
- identify opportunities for synergy between firm and a potential acquisition
How can a business decide whether to outsource or not?
Use Harmon’s strategic matrix based on strategic importance and process complexity
Low importance, low complexity - outsource
Low importance, high complexity - automate/outsource
High importance, low complexity - automate
High importance, high complexity - be improved as much as possible
What are the downsides to using the BCG matrix?
Factors other than market share and market growth affect cash flow
Does not take associated risks into account
Focuses on known markets and known products
What strategies should be used for dog/question mark/cash cow/star?
Dog - exit
Question mark - improve or exit. Might need to invest heavily in order to improve market share.
Cash cow - use the cash to support any question marks
Star - reinvest cash to hold on to position and build upon it
What are the strategic approaches to CR?
Proactive - the business takes full reponsibility on its own
Reactive - allowing a situation to continue until somebody brings it to light
Defence - avoids additional obligations arising
What are the disadvantages of a joint venture?
- conflict over profit sharing
- protection of intellectual property
- exit routes may be unclear
- danger of either partner’s priorities changing
Why should a company consider expanding overseas?
- differing product life cycles
- domestic competition too high
- reduced dependence on a single domestic market
- diversification helps spread risk
- economies of scale
For each of the following CSFs, give examples of KPIs: Marketing Production Logistics Sales Pricing Management information
Marketing
- sales volume
- market share
Production
- quality standards
Logistics
-level of service
Sales
- contribution per salesperson
Pricing
- price relative to industry average
Management information
-timeliness of reports
What is an alternative way of measuring divisional performance to ROI?
Residual income = divisional profit - (net assets x req. rate)
What does a balanced scorecard include?
Looks at goals and then measures KPIs.
Financial perspective
Customer perspective
Internal business perspective e.g. technology, design, productivity
Innovation and learning perspective
How can IT/IS add value to the value chain?
Operations:
- automate and improve physical tasks in manufacturing sector
- automated tools can be more precise
Logistics:
- track stock availability and warehousing
- stock control systems can automatically order
Marketing
- purchase mailing lists
- monitor customer preferences
- EPOS systems can tell us how each product is selling during the day
Service
- internet helps us manage customer relationships
Support activities:
- CAD can be more easily updated
- purchasing decisions become easier
How can IT/IS add value to the value chain?
Operations:
- automate and improve physical tasks in manufacturing sector
- automated tools can be more precise
Logistics:
- track stock availability and warehousing
- stock control systems can automatically order
Marketing
- purchase mailing lists
- monitor customer preferences
- EPOS systems can tell us how each product is selling during the day
Service
- internet helps us manage customer relationships
Support activities:
- CAD can be more easily updated
- purchasing decisions become easier
What are threats to IT systems?
- data being stolen, political terrorism
- fraud
- deliberate sabotage
- viruses spreading
- denial of service attacks
- if it fails, there should be a backup
What are practical measures a business can take to combat IT risks?
- Business continuity planning (back up system) to ensure the business can still run
- limit systems access control
- physical and environmental security
- personnel security and reporting security related incidents
- computer and network management
- security policy
What are the benefits of market segmentation? How can a market be segmented?
- can identify new marketing opportunities
- specialists can be used for the major segments
- can try and dominate one of the segments to gain a competitive advantage
Segment by:
- location
- psychological
- purchasing frequency
- demographic
What are the additional Ps in the marketing mix for service companies?
People e.g. sales assistants or waiters
Process - how you book or deliver
Physical evidence - e.g. branding
What are the benefits of strong branding?
- positive associations made by customer so reduced marketing costs through high brand awareness and loyalty
- more bargaining power
- can charge more due to higher perceived quality
- more predictable income stream
- the goodwill can be sold
What are the four types of benchmarking?
Internal:
- comparing between the divisions or historical comparisons e.g. inputs - time/cost/quality or outputs - sales, customer satisfaction and growth.
- shows what the company is capable of
- but inward looking and not looking at competitive landscape
External:
- looks at competitors
- but doesnt necessarily mean that they are doing it right
- limited information available
Best-in-class:
- looks at standards in similar processes in a similar industry where possible
Generic:
- any industry but conceptually similar process e.g. looking at the quality of manufacture in medical equipment
What are examples of personnel barriers to change?
Habit - hard to change the way of doing things
Job security
Earnings
Fear of the unknown - reduces people’s willingness and interest in learning new skills
Selective information processing
What are the four elements of a good mission statement?
Purpose
Strategy - competitive position/competence
Policies/standards of behaviour - e.g. regulatory constraints
Values - what the company believes in and how this is replicated by employees
What are examples of barriers to entry?
Capital investment Switching costs Economies of scale Product differentiation/switching Qualifications/membership of professional bodies Brand Expertise
What things need to be considered when coming up with a marketing strategy?
Segmentation - identifying the bases for segmenting the market and characteristics of the different segments
Targeting - evaluating the attractiveness of each segment and selecting who to target
Positioning - requires a detailed marketing mix to be developed for each segment.
