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Principles of Management > Chapter 3 > Flashcards

Chapter 3 Flashcards

1
Q

a statement of an organization’s fundamental purpose that sets a business apart from another

A

Mission

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2
Q

a goal set by and for an organization’s top management that focuses on broad general issues

A

strategic goal

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3
Q

a goal set by and for an organization’s middle managers that focuses on how to operationalize actions necessary to achieve a goal

A

tactical goal

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4
Q

a goal set by and for an organization’s lower level managers that is concerned with short term issues

A

operational goal

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5
Q

a general plan outlining decisions about the resource allocation, priorities, and action steps necessary to reach strategic goals that is set by a board of directors and extends over a wide scope of topics

A

Strategic plan

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6
Q

aimed at achieving tactical goals, is developed to implement specific parts of strategic plan that involves upper management and has more of a concrete focus

A

tactical plans

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7
Q

a plan that focuses on carrying out tactical plans to achieve operational goals that are developed by middle and lower management with a short term focus and a narrow scope

A

operational plans

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8
Q

what does an organization’s mission outline?

A
  • purpose
  • premises
  • values
  • directions
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9
Q

what are the four important purposes of goals?

A
  • Provide guidance and a unified direction for people in the organization
  • Goal setting practices strongly affect other aspects of planning
  • Goals can serve as a source of motivation for an organization’s employees
  • Goals provide an effective mechanism for evaluation and control
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10
Q

a comprehensive plan for accomplishing an organization’s goals

A

strategy

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11
Q

a comprehensive and ongoing management process aimed at formulating and implementing effective strategies; a way of approaching business opportunities and challenges

A

strategic management

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12
Q

a strategy that promotes a superior alignment between the organization and its environment and the achievement of strategic goals

A

effective strategy

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13
Q

what three areas does a well conceived strategy address?

A
  • distinctive competence
  • scope
  • resource deployment
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14
Q

an organizational strength possessed by only a small number of competing firms

A

distinctive competence

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15
Q

when applied to strategy, it specifies the range of markets in which an organization will compete

A

scope

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16
Q

how an organization distributes its resources across the areas in which it competes

A

resource deployment

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17
Q

what two levels do most businesses develop strategies at?

A

business level and corporate level

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18
Q

the set of strategic alternatives from which an organization chooses as it conducts business in a particular industry or market

A

business level strategy

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19
Q

the set of strategic alternatives from which an organization chooses as it manages its operations simultaneously across several industries and several markets

A

corporate level strategy

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20
Q

the set of processes involved in creating or determining an organization’s strategies; it focuses on the content of strategies

A

strategy formulation

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21
Q

the methods by which strategies are operationalized or executed within the organization; it focuses on the processes through which strategies are achieved

A

strategy implementation

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22
Q

an acronym that stands for strengths, weaknesses, opportunities, and threats

A

SWOT

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23
Q

a skill or capability that enables an organization to create and implement its strategies

A

organizational strengths

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24
Q

a strength possessed only by a small number of competing firms

A

Distinctive competence

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25
Q

an area in the environment that if exploited may generate higher performance

A

organizational opportunities

26
Q

an area that increases the difficulty of an organization performing at a high level

A

organizational threats

27
Q

a skill or capability that does not enable an organization to choose and implement strategies that support its mission

A

organizational weaknesses

28
Q

a strategy in which an organization seeks to distinguish itself from competitors through the quality of its products or services

A

differentiation strategy

29
Q

a strategy in which an organization attempts to gain a competitive advantage by reducing its costs below the costs of the competing firm

A

overall cost leadership strategy

30
Q

a strategy in which an organization concentrates on a specific regional market, product line or group of buyers

A

focus strategy

31
Q

a model that portrays how sales volume for products changes over the life of products

A

product life cycle

32
Q

what are the four stages of the product life cycle

A
  • introduction
  • growth stage
  • maturity stage
  • decline stage
33
Q

each business or set of businesses within an organization is frequently referred to as this

A

strategic business unit

34
Q

the number of different businesses that an organization is engaged in and the extent to which these businesses are related to one another

A

diversification

35
Q

What are the three types of diversification?

A
  • single product strategy
  • Related diversification
  • Unrelated diversification
36
Q

a strategy in which an organization manufactures just one product or service and sells it in a single geographic market

A

single product strategy

37
Q

a strategy in which an organization operates in several businesses that are somehow linked with one another

A

related diversification

38
Q

What are the three primary advantages of related diversification?

A
  • It reduces an organization’s dependence on any one of its business activities and then reduces economic risk
  • By managing several businesses at the same time, an organization can reduce the overhead costs associated with managing any one business
  • Related diversification allows an organization to exploit its strengths and capabilities in more than one business
39
Q

a strategy in which an organization operates multiple businesses that are not logically associated with one another

A

Unrelated Diversification

40
Q

what are two advantages of unrelated diversification?

A
  • A business that uses this strategy should be able to achieve stable performance over time
  • Because organizations that implement unrelated diversification fail to exploit important synergies, they are a competitive disadvantage compared to organizations that use related diversification
41
Q

methods that diversified organizations use to determine in which businesses to engage and how to manage these businesses to maximize corporate performance

A

Portfolio management techniques

42
Q

What are two important portfolio management techniques

A
  • BCG (Boston Consulting Group) Matrix

- GE Business Screen

43
Q

a framework for evaluating businesses relative to the growth rate of their market and the organization’s share of the market

A

BCG (Boston Consulting Group) Matrix

44
Q

In the BCG Matrix, what is a dog?

A

businesses that have a very small share of the market that is not expected to grow

45
Q

In the BCG Matrix, what is a cash cow?

A

businesses that have a large share of a market that is not expected to grow substantially

46
Q

In the BCG Matrix, what is a question mark?

A

businesses that only have a small share of fast growing market

47
Q

In the BCG Matrix, what is a star?

A

businesses that have the largest share of a rapidly growing market

48
Q

a method of evaluating businesses along two dimensions: 1. Industry attractiveness and 2. Competitive position; in general, the more attractive the industry and the more competitive the position, the more an organization should invest in a business.

A

GE Business Screen

49
Q

what can determine the attractiveness of an industry?

A

In addition to market growth, determinants such as market size, capital requirements, and competitive intensity

50
Q

what can determine the competitiveness of an industry?

A

In addition to market share, determinants such as technological know how, product quality, service network, price competitiveness, and operating costs

51
Q

a plan aimed at achieving tactical goals and developed to implement parts of a strategic plan; an organized sequence of steps designed to execute strategic plans

A

tactical plans

52
Q

two basic forms of operational planning

A
  • single use plans

- standing plans

53
Q

a single use plan for a large set of activities

A

programs

54
Q

a single use plan of less scope and complexity than a program

A

project

55
Q

developed for activities that recur regularly over a period of time

A

standing plans

56
Q

a standing plan that specifies the organization’s general response to a designated problem or situation

A

policy

57
Q

a standard plan that outlines the steps to be followed in particular circumstances

A

SOP

58
Q

describe exactly how specific activities are to be carried out

A

rules and regulations

59
Q

the determination of alternative courses of action to be taken if an intended plan is unexpectedly disrupted or rendered inappropriate

A

contingency planning

60
Q

at what four points does contingency planning come into play?

A
  1. Management develops the organizations basic plans
  2. The plan that management chooses is put into effect
  3. The company specifies certain indicators or signs that suggest a contingency event is about to take place
  4. Marks the successful completion of either the original or a contingency plan
61
Q

the set of procedures the organization uses in the event of a disaster or other unexpected calamity

A

crisis management

Principles of Management (7 decks)

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