Chapter 1

Question 1

Strategic management definition

Answer 1

Consist of the analyses, decisions, and actions an organization undertakes in order to create and sustain competitive advantages

Question 2

Analyses of strategic goals include

Answer 2

Vision, mission, strategic organization and analysis of internal and external environments of the organization

Question 3

Competitive advantages has two fundamental questions:

Answer 3

How should be compete in order to create competitive advantages in the marketplace?
How can we create competitive advantages in the marketplace that are unique, valuable, and difficult for rivals to copy or substitute?

Question 4

Fundamental question: How should we compete in order to create competitive advantages in the workplace?

Answer 4

Should managers position itself as the low-cost producer, develop products and services that are unique to charge premium prices, or combination of both?

Question 5

Fundamental question: How can we create competitive advantages in the marketplace that are unique, valuable, and difficult for rivals to copy or substitute?

Answer 5

Advantages must be sustainable not temporary

Question 6

Operation effectiveness definition and what it includes

Answer 6

Performing similar activities better than rivals

Includes: total quality, just-in-time, benchmarking, business process reengineering, outsourcing

Question 7

Four attributes of strategic management

Answer 7

Directs the organization toward overall goals and objectives
Includes multiple stakeholders in decision making
Needs to incorporate short-term and long-term perspectives
Recognizes trade-offs between efficiency and effectiveness

Question 8

Stakeholders

Answer 8

Includes: owners, employees, customers, suppliers

Managers will not be successful by only focusing on one stakeholder

Question 9

Short-term vs. Long term perspectives

Answer 9

Managers must maintain a future vision and present operating needs

Financial markets exert pressure on executives meeting short-term targets

Corporate leaders often take the short-term approach

Question 10

Trade-offs between effectiveness and efficiency

Answer 10

Do we manage for today or for tomorrow?
Do we stick to boundaries or cross them?
Whom do we focus on, shareholders or stakeholders?

Question 11

Types of paradoxes

Answer 11

Innovation: firms taking the risk and learning from failures in pursuit of new products or services

Global: not having all the talent and brains in one location

Obligations: being socially responsible could bring short firm’s share price and prioritizing employees may conflict with short-term shareholders or customer needs

Question 12

Ambidexterity

Answer 12

Managers challenge to align resources to take advantage of existing product markets and proactively exploring new opportunities