Chapter 2: Working with strategy

Question 1

What is a SWOT analysis?

Answer 1

Strenghts: those internal factors that make an organisation superior and more competitive than its peers. more able to control. internal.

Weaknesses: limitations, faults or defects within the organisation that will keep it from achieving its objectives. more able to control. internal.

Opportunities: any favorable current or prospective situation in the organisations environment; trend. external.

Threats: any unfavorable situation. Ex down in demand. external.

Question 2

What are the three dangers in a SWOT analysis?

Answer 2

Risk of confusing the internal and external. Risk and opportunities are external whilst strength and weaknesses are internal.

Over-generalisation.

SWOT should not be the substitute for analysis, it should be the outcome of analysis of other frameworks. (S&W from VRIO, value chain ex and O&T from PESTEL, forecasting, five forces, scenario ex).

Question 3

What is allocentricism?

Answer 3

Allocentricism = not only thinking about your own organisation but also other actors, suppliers, customers, rivals, governments. Their opinions, success, downfalls are likely to affect you.

Question 4

What is an issue tree?

Answer 4

Systematically breaking down big issues into smaller issues (subsidiaries issues) for further analysis

• a goal in issue tree analysis is to construct a set of subsidiary issues that are mutually exclusive and collectively exhaustive (MECE)

Question 5

What is system mapping?

Answer 5

system maps shows the links between the elements of a strategic problem.

in a system; all parts are interconnected, so changing one part is liable to have effects on all other parts.

Example: Apple ecosystem of mutually reinforcing products

Question 6

What is divergent thinking?

Answer 6

Divergent thinking - creative and receptive to a wide range of ideas and information. Generating multiple ideas or solutions for a problem. It encourages creativity and exploration, allowing for many possible answers or approaches. This type of thinking is useful in brainstorming sessions or when tackling open-ended problems.

Question 7

What are some divergent models and techniques?

Answer 7

Brainstorming & brainwriting.

Question 8

What is convergent thinking?

Answer 8

Convergent thinking - Narrowing down to find the best answer. This is the process of bringing together different ideas or pieces of information to find a single, correct solution to a problem. It often involves logical reasoning and is useful in situations where there is a clear answer, like in math problems or standardized tests.

Question 9

What are some convergent models and techniques?

Answer 9

Strategic planning and evaluating matrix.

Question 10

What is hybrid thinking?

Answer 10

Hybrid thinking includes both opening up (divergent) and refocusing (convergent) components.

Question 11

What did March 1991 mean by exploitation?

Answer 11

Exploiting current business, can be linked to convergent thinking (narrowing down).

Linked to
- cost, profit, efficiency
- stable environment
- top-down and transactional leadership

Question 12

What did March 1991 mean by exploration?

Answer 12

Exploration = seeking out new ways of growth. Can hence be linked to divergent thinking.

Characterized by
- innovation, growth
- higher risk
- dynamic environment
- visionary and transformational leadership

Question 13

What is the halo effect and who coined it?

Answer 13

It is a type of cognitive bias coined by Edward Thorndike in 1920. Its a too-simplified first impression.

“individuals who are physically attractive benefit from the tendency to assume that positive qualities cluster together”

Question 14

What is the halo effect within business studies?

Answer 14

Rosenzweig studied this in 2007.
Halo effect in business is

• delusion of absolute performance: success follows some specific steps or some magical formula
• delusion of lasting success
• ABB example by Rosenzweig. Not really much had changed besides performance that fell, but CEO was suddenly viewed differently
• If success could be reduced to a formula, companies would not need strategic thinking but could rely on administrators to tick the right boxes and ensure that formulas were followed with precision. What makes strategic decision making so difficult, and therefore so valuable to companies, is precisely that there are no guaranteed keys to success” (Rosenzweig, 2007, p 82).
• Bottom line: everything is uncertain: customers, technology, market

Question 15

What is a TOWS matrix?

Answer 15

The TOWS matrix is a strategic tool used to analyze an organization’s external and internal factors and help develop strategic options. It builds upon the SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) but places more emphasis on how the internal and external factors interact

Question 16

What did Oliver et al mean with balancing convergence & divergence?

Answer 16

Hybrid thinking serves as a useful approach to generating organisational creativity as its divergent side encourages novelty, while its convergent side
ensures that the discoveries will be valuable to the organisation. On their own, divergent approaches may ultimately cause frustration on behalf
of participants if the ideas produced are difficult to implement, which may lead to reduced ownership.