Chapter 5

Question 1

BCG matrix

Answer 1

A concept developed by the Boston Consulting Group that evaluates SBUs with respect to two dimensions—business growth rate and market share—and classifies them as cash cows, stars, bright prospects, or dogs

Question 2

Coalitional management

Answer 2

Building an alliance of people who support a manager’s goals and influencing other people to accept and work toward those goals

Question 3

Competitive advantage

Answer 3

What sets the organization apart from others and provides it with a distinctive edge in the marketplace

Question 4

Contingency plans

Answer 4

Identifies important factors in the environment and defines a range of alternative responses to be taken in the case of emergencies, setbacks, or unexpected conditions

Question 5

Core competence

Answer 5

Something that the organization does particularly well in comparison to others

Question 6

Cost leadership strategy

Answer 6

Managers aggressively seek efficient facilities, cut costs, and use tight cost controls to be more efficient than others in the industry

Question 7

Differentiation strategy

Answer 7

Managers seek to distinguish the organization’s products and services from those of others in the industry

Question 8

Diversification

Answer 8

The strategy of moving into new lines of business

Question 9

Focus strategy

Answer 9

Managers use either a differentiation or a cost leadership approach, but concentrate on a specific regional market or buyer group

Question 10

Goal

Answer 10

A desired future circumstance or condition that the organization attempts to realize

Question 11

Joint venture

Answer 11

A strategic alliance or program by two or more organizations

Question 12

Key performance indicators (KPIs)

Answer 12

Measures that reflect how well lower-level goals are helping the organization progress toward attaining its strategic goal

Question 13

Management by means (MBM)

Answer 13

A recent approach that focuses people on the methods and processes used to attain results, rather than on the results themselves

Question 14

Management by objectives (MBO)

Answer 14

A method whereby managers and employees define goals for every department, project, and person and use them to monitor subsequent performance

Question 15

Merger

Answer 15

Two or more organizations combine to become one

Question 16

Mission

Answer 16

An organization’s purpose or reason for existence

Question 17

Mission statement

Answer 17

A broadly stated definition of the organization’s basic business scope and operations that distinguishes it from similar types of organizations

Question 18

Operational goals

Answer 18

Specific, measurable results that are expected from departments, work groups, and individuals

Question 19

Operational plans

Answer 19

Specific action steps toward achieving operational goals and supporting tactical activities

Question 20

Plan

Answer 20

A blueprint specifying the resource allocations, schedules, and other actions necessary for attaining goals

Question 21

Planning

Answer 21

The act of determining goals and defining the means of achieving them

Question 22

Portfolio strategy

Answer 22

Seeks to establish a mix of SBUs and product lines that fit together in a logical way to provide synergy and competitive advantage

Question 23

Related diversification

Answer 23

Moving into a new business that is related to the corporation’s existing business activities

Question 24

Scenario building

Answer 24

Managers look at trends and discontinuities and imagine possible alternative futures
to build a framework within which unexpected future events can be managed

Question 25

Strategic business units (SBUs)

Answer 25

A division of the organization that has a unique business mission, product or service line, competitors, and markets relative to other units of the
same organization

Question 26

Strategic goals

Answer 26

Broad statements of where the organization wants to be in the future and pertain to the organization as a whole rather than to specific divisions or departments

Question 27

Strategic management

Answer 27

The set of decisions and actions used to formulate and implement strategies that will provide a competitively superior fit between the organization and its environment so as to achieve organizational goals

Question 28

Strategic plans

Answer 28

The action steps by which an organization intends to attain its strategic goals

Question 29

Strategy

Answer 29

The plan of action that describes resource allocation and activities for dealing with the environment, achieving a competitive advantage, and attaining goals

Question 30

Stretch goals

Answer 30

Reasonable yet highly ambitious and compelling goals, characterized by both an extreme difficulty and extreme novelty, that energize people and inspire excellence

Question 31

SWOT analysis

Answer 31

An audit or careful examination of strengths, weaknesses, opportunities, and threats that affect organizational performance

Question 32

Synergy

Answer 32

The organization’s parts interact to produce a joint effect that is greater than the sum of the parts acting alone

Question 33

Tactical goals

Answer 33

The outcomes that major divisions and departments must achieve for the organization to reach its overall goals

Question 34

Tactical plans

Answer 34

Actions designed to help execute the major strategic plans and to accomplish a specific part of the company’s strategy