Comp 1 - Strategic Planning

Question 1

• Describe the steps in the strategic planning process

Answer 1

1. Establishment of mission, values and goals.
2. Analysis of eternal opportunities and threats.
3. Analysis of internal strengths and weaknesses
4. SWOT – Strength, weakness, opportunity & threat. – analysis & strategy formulation
5. Strategy implementation
6. Strategic control.

Question 2

Describe the concepts of strategic vision (intent), mission, and goals

Answer 2

• Mission clear and concise expression of the basic purpose of the organization (what does the organization do? Who does it do it for? Values?) Mission describes the organization as it currently operates.
• Vision – points to the future – it provides a perspective on where the organization is headed and what it can become. Clarifies the long-term direction of the company and its strategic intent. The most effective vision statements inspire organization members.
• Goals – evolve from the mission and vision of the organization.

Question 3

Explain the components of a SWOT analysis and how it is used in the strategic planning process

Answer 3

• External environments – outside the organization’s control – including
  o macroenvironment (economy, technology, legal and regulators, demographics, social issues and natural ecology) & competitive environment (rivals, suppliers, buyers, new entrants & subs and complements.
• Internal environment – culture, values & climate
• Strengths and weaknesses (both internal resources), opportunities and threats. SWOT analysis help managers summarize the relevant, important facts from their external and internal analysis. They can identify primary and secondary strategic issues their organization faces.
• Internal - strengths and weaknesses – financial situation, market position, operations, hr
• External – threats & opportunities – industry & market, competitor, political/regulatory, social demographic, hr/labor, macroeconomic, technological

Question 4

Explain what a Core Competency/Capability means for an organization

Answer 4

• When resources are valuable, rare, inimitable, and organized. A “core capability” is something a company does especially well compared to its competitors.

Question 5

Describe what Porter’s Five Forces Model is and how it is used in the strategic planning process

Answer 5

1. Competition in the industry – rival firms
   a. # of competitors & ability to undercut a company.
   b. Larger # competitors w/ # of equivalent products/services offered, the lesser the power of a company
   c. Supplies/buyers seek out a company’s competition to offer better deals/prices vs. low competitive rivalry, company has more power to higher prices and terms of deals
2. Potential of new entrants into an industry
   a. Company’s power affected by force of new entrants into its market. Less time & money it costs for a competitor to enter a company’s market and be effective, the more established company’s position could be significantly weakened.
   b. Industry with strong barriers to entry is better for existing companies enabling higher prices & negotiating better terms.
   c. New competitors may be limited by barriers to entry
3. Power of Suppliers
   a. Easy it is for suppliers to increase cost of inputs. Dependent on the # of suppliers of good or service inputs, how unique they are and how much it costs to switch to another supplier.
   b. Fewer suppliers = more a company is dependent on a supplier.
   c. Many suppliers = company can keep input costs lower & enhance profit.
   d. Switching costs – On time delivery
4. Power of customers
   a. Customers ability to drive prices lower / level of power
   b. Affected by how many buyers/customers a company has, how significant each customer is and how much it costs a company to find new customers or markets for its output.
   c. Smaller & powerful client base means each customer has more power to negotiate for lower prices/deals. Co. with many smaller independent customers have easier time charging higher prices to increase profitability.
5. Threat of substitutes or complements
   a. Substitute goods/services can be used in place of a co.’s products or services pose a threat.
   b. You want to have few close substitutes to have more power over pricing/terms.

Question 6

Describe the types of corporate strategies that organizations can use

Answer 6

1. Corporate strategy:
   a. Identifies set of businesses, markets or industries which an organization competes and distribution of resources among those businesses.
2. Concentration: 1 business & 1 industry strategy focuses on a single business competing in a single industry. (Arm & Hammer, pursues this by making baking soda for home personal care applications; enabled church & Dwight co. to operate successfully for 175 years.
3. Vertical Integration: backward & forward- owning multiple assets within the supply chain - expanding the co.’s domain to include supplier & distributers. Reduces costs associated with suppliers or distributors and reduce uncertainties created by unpredictable business relationships.
   a. Forward – firm gains ownership/control over its previous customers
   b. Backward – firm gains ownership/control over its previous suppliers
4. Concentric diversification: creates similar business - moves into new but related businesses. Ex: a restaurant business gets into airline catering, hotels & fast food.
5. Conglomerate Diversification: contrast to concentric diversification, explanation into unrelated business.

Question 7

Understand the two kinds of business strategies that companies can use to gain competitive advantage

Answer 7

• Low-cost strategies (efficient, offer a standard, no-frills product. Think Wal-Mart: an organization using this strategy must generally be the cost leader in its industry):
  o Focuses on offering a more -or-less standardized, “no-frills” product or service in the most efficient way – low price leader.
• Differentiation strategy (company attempts to be unique along some dimension that customers value – high product quality, excellent marketing and distribution, superior service). Customized products that competitors are unwilling or unable to match. Apple – unique – trend setters.

Question 8

Define what the Value Chain concept means, as well as the purpose of a value chain analysis

Answer 8

• Value Chain: is the activities flow of raw materials to the delivery of a good/service, which a value added at each step.
• When the total value is created, what customers are willing to pay, exceeds the cost of providing the good or service, results is the profit margin.

Question 9

Identify and understand the differences between mechanistic and organic organizational structures

Answer 9

• Mechanistic maximize internal efficiencies. Organic – emphasizes flexibility.

Question 10

Describe what a Total Quality Management (TQM) system is and how implementing one benefits an organization

Answer 10

Focus on= understanding the concept of TQM and how it benefits organizations
* Integrative approach that supports attainment of customer satisfaction through a wide variety of tools and techniques that result in “high-quality goods & services”.
* Bottom-line – to improve quality and weave it into everything the organization does.
* Concept of continuous improvement – meeting a customer’s needs & improving the value chain. Add value from R&D to service and tqm gives them the opportunity to.

Question 11

Identify and understand the importance of statistical analysis in Total Quality Management (TQM) models/methodologies

Answer 11

• 6 sigma - focuses on the statistical sign for standard deviations which at 6, would translate into less than 3.4 defects/mistakes per million. (Almost perfect score)
• Requires – fundamental changes in org processes & relationships w/ customers & suppliers.

Question 12

Identify key quality management approaches such as Deming’s 14 points

Answer 12

• Deming – holistic approach to quality (everyone is on board with quality)
  14 - Take action to accomplish the transformation - provide a structure that enables quality

Question 13

Understand and briefly discuss the main ideas behind Six Sigma quality-control tools

Answer 13

6 Sigma a product or process is defect free 99.99966 % of the time.
* 6 sigma - focuses on the statistical sign for standard deviations which at 6, would translate into less than 3.4 defects/mistakes per million. (almost perfect score)
* Requires – fundamental changes in org processes & relationships w/ customers & suppliers.

Question 14

Distinguish between quality assurance and quality control

Answer 14

• Quality control – process that measures and determines the quality level of products/services. (Reactive - after the fact)
• Quality Assurance – complete system to assure the quality of products/services. It’s not only a process but a complete system of management that includes quality control. (proactive)

Question 15

Describe what a Quality Audit is and entails

Answer 15

• “Periodic, independent, and documented examination & verification of activities, records, processes, and other elements of a quality system to determine their conformity with the requirements of a quality standard (like ISO).
• Internal, production, supplier, safety, environment, etc. audits.

Question 16

Describe what the Strategic Triangle is and how the three components relate to each other

Answer 16

The strategic triangle (3C’s) is a framework used to establish the competitive position of the company in relation to its customers and competitors. The framework is based on the premise that competitive advantage is determined by the ability to deliver greater value to customers at a lower cost than competitors. Strategy is formulated by optimizing the relationships between the players (company, competitors, and customers) based on the strengths to better satisfy the customers.

Question 17

Explain what “Reengineering” is and describe how organizations use Customer Relationship Management tools to better understand and meet their needs

Answer 17

• Cutting costs by focusing on what the customer wants and how the value chain can be improved – “if you were the customer, how would you like us to operate”
• Complete overhaul of the org operations in revolutionary ways, to achieve the greatest possible benefits to the customer and to org.

Question 18

Identify the common characteristics that entrepreneurs possess
(6 topics)

Answer 18

1. Commitment & determination – decisive, disciplined, self-sacrifice
2. Leadership – self-starter, team builders, etc.
3. Opportunity Obsession – knowledge of customers’ needs, market drive
4. Tolerance of Risk, ambiguity, and uncertainty – ambiguity, and uncertainty: calculated risk takers and managers, stress & handle problems
5. Creativity, Self-reliance & ability to adapt – open-minded, learn quickly, adaptable,
6. Motivation to excel – high goals, drive to achieve,

Question 19

Understand and be able to apply the Entrepreneurial Strategy Matrix to assess an entrepreneurial opportunity

Answer 19

Mostly about Money
High Innovation - Low Risk
High Innovation - High Risk
Low Innovation - Low Risk
Low Innovation - High Risk

Question 20

Describe common reasons behind entrepreneurial success and failure

Answer 20

• Success –
  o great product,
  o viable market
  o good timing
  o Planning (opportunity analysis & business plan)
   Executive summary
   Industry & co & its products or services
   Market & research analysis
   Economics of business
   Marketing plan
   Design & development plan
   Manufacturing & operations plan
   Management team
   Financial plan
   Proposed co. offering
  o Cash to cover start-up expenses
• Failure –
  o you might not enjoy it,
  o survival is difficult,
  o growth creates new challenges,
  o hard to delegate,
  o misuse of funds,
  o poor controls
  o Mortality & succession.

Question 21

Identify common ways in which entrepreneurs finance their ventures

Answer 21

• Entrepreneurs’ own money – self funding
• Loans from family & friends
• Loans from a bank or financial institution
• Venture capital – private equity or investors

Question 22

Describe what “Intrapreneurship” is and identify and apply the concepts of Bootlegging and Skunkworks

Answer 22

• Building intrapreneurship derives from careful and deliberate strategy
• Intrapreneurs create new ventures inside of larger companies
  o Bootlegging- employees work to create new products/processes of their own choosing or initiative (informal = secretive)
  o Skunkworks – project teams designated to develop a new product with a specific goal within a specified time frame.

Question 23

Discuss how a larger organization can promote and maintain the spirit of entrepreneurship and innovation

Answer 23

• Entrepreneurial orientation – organization to identify & capitalize successfully on opportunities to launch new ventures by entering new or established markets with new or existing goods or services.
  o Allow independent action
  o Innovativeness
  o Risk taking
  o Pro-activeness
  o Competitive aggressiveness

Question 24

Describe Constructive Conflict, why it can be beneficial to organizations and what structured processes can be used to encourage it

Answer 24

o Conflict = Opposing pressures from different sources, occurring on the level of psychological conflict or of conflict between individuals or groups.
* Cognitive conflict – issue-based differences in perspectives or judgments.
* Dialectic = a structured debate comparing two conflicting courses of action
* Devil’s advocate – person who criticizes ideas to ensure that their downsides are fully explored

Question 25

Identify the various stages of the conflict process

Answer 25

• Potential opposition or incompatibility second –
  o Communication, structure & personal variables such as word usage (jargon) structure of group, personality of people, etc.
• Cognition & personalization
  o Emotions come into play in perceptions of conflict (stress, anger, etc.)
• Intentions
  o People’s decisions to act in a certain way (5 conflict styles)
• Behavior
  o Actions and reactions/ signs of conflicting parties
• Outcomes
  o Dysfunctional (people aren’t happy with results) can be dysfunctional or functional.

Question 26

Identify and describe the various conflict styles and how conflict strategies function in organizations

Answer 26

• Avoidance – a reaction to conflict that involves ignoring the problem by doing nothing at all or deemphasizing the disagreement
• Accommodation – dealing with conflict through cooperation on behalf of the other party by not being assertive about one’s own interests.
• Compromise – dealing with conflict through moderate attention to both parties’ concerns
• Competing – strong focus on one’s own goals & little or no concern for the other person’s goals.
• Collaboration – emphasizing both cooperation & assertiveness to maximize both parties’ satisfaction
• Superordinate goals – higher level org. goals that takes priority over individual group goals

Question 27

Describe the key aspects of the job-characteristics model of organizing and describing jobs
Chapter 13- “The Hackman and Oldham Model of Job Design”
Focus on= Exhibit 13.6 and all 5 components that make up the model

Answer 27

• Skill variety – different job activities involving several skills and talents. SAS – business analytics software compo. Wants its knowledge workers to continually grow by adding new skills.
  o Keep employees challenged, motivated & engaged
• Task identity – completion of a whole identifiable piece of work. They build & invest in their own business, and as a result, agent retention & productivity are better.
• Task significance – Important positive impact on the lives of others.
• Autonomy – independence & discretion in making decisions
• Feedback – job performance – motivation to continue

Question 28

Explain what a “boundaryless” organization is and what it means for organizations

Answer 28

• Org in which there are few major obstacles to information flow.
  o Instead of barriers separating people & places, boundarylessness organizations, ideas, information, and decisions move quickly to wherever they are needed.
  o Integrity creates trust & transparency. Together are vital to personal, team & organizational effectiveness.

Question 29

Identify and summarize ways in which to become a better communicator cross-culturally

Answer 29

• Don’t use jargon if the receiver doesn’t know
• Simplicity in writing
• Consider receiver’s background

Question 30

Understand the Prosci 3 Phase Change Management Process
Focus on= 3 phases of the management change

Answer 30

Phase 1 – Preparing for change (preparation, assessment & strategy)
* Phase 2 – Managing change (planning & change management implementation)
* Phase 3 – Reinforcing change (data gathering, corrective action & recognition)

Question 31

Identify and apply approaches to gaining cooperation in organizational change initiatives

Answer 31

• Education & communication
• Participation & involvement
• Facilitation & support
• Negotiation & rewards
• Manipulation & cooptation
• Explicit & implicit coercion

Question 32

Describe strategic human resource management and how HR planning can benefit an organization
The HR Planning Process section, especially concepts of Supply & Demand with respect the human resources/capital

Answer 32

• HR Planning Process
  o Human resources management (HRM) – systems for mgmt. of people within org.
  o Human Capital – knowledge, skills & abilities of employees that have economic value
  o Job analysis – what is done on the job
  o Job description – essential tasks, duties in doing job
  o Job specification – skills knowledge & abilities needed to perform job
• Supply & Demand
  o Demand –
   Consider sales & projected future sales growth to estimate production capacity needed to meet demand, sales force, support staff, etc.
   Calculate labor hours to operate plant, sell product, distribute, serve customers to project demand.
  o Supply –
   Forecast supply of labor by estimating # & qty of current employees & external supply of workers.
   Estimate internal supply by past experiences, data with turnover, terminations, retirements, promotions, and transfers.

Question 33

Understand and identify the key techniques used in the employee recruitment and selection process in and organization

Answer 33

• Internal & external recruitment
• Selection -
  o Applications / resumes
  o Interviews
  o Reference check
  o Background checks
   Tests
• Personality test
• Drug test
• Cognitive ability test
• Performance test
• Integrity test

Question 34

Identify and apply major U.S. Equal Employment Laws to the workplace environment and how they affect human resource considerations

Answer 34

• Fair labor standards act
• Equal pay act
• Title VII of civil rights act
• Executive orders
• Age discrimination in employment act
• Vocational rehabilitation act (must consider people with disabilities capable of working after reasonable accommodations)
• Americans with disabilities act amendments act (must provide reasonable accommodations)
• Civil rights act
• FMLA

Question 35

Identify issues that could arise between older and younger workers in an organization

Answer 35

• How you say something can determine if the message will be accurately received, processed & understood.
• Failure to use an appropriate mode of communication is not only inefficient, it can be interpreted as disrespectful.
• Texting vs. phone calls amongst generations

Question 36

Identify and apply the Americans with Disabilities Act (ADA) legislature in the workplace

Answer 36

• Defines what a disability is
• Prohibits discrimination of disability in employment.

Question 37

Identify and apply common components in diversity training programs

Answer 37

• Orientation training
• Team training
• Diversity training
• Management training

Question 38

Describe the fundamental concepts of the organizational chart, including the Division of Labor and Coordination

Answer 38

• Org charts are the positions in a firm and the way they are arranged. Reporting structure and division of labor in an organization – each box represents different work performed.
  o Functional and divisional
• Differentiation
  o Org is composed of various units that work on varying tasks using different skills & methods.
  o Dividing work into smaller tasks & assigning it to different groups (division of labor)
  o Specialization – dividing up tasks among individuals or groups/units
• Integration
  o Extent that these different work units work together in their efforts
  o Coordination, refers to how the various parts of an organization link together to achieve its mission and goals

Question 39

Explain in detail the key elements of the vertical organizational structure

Answer 39

• Deals with issues of authority, reporting relationships and responsibilities.
• Represents authority structure

Question 40

Explain in detail the key elements of the horizontal organizational structure

Answer 40

• Deals with actual structure of an organization and departmentalization.
• Functional

Question 41

Identify and describe what a “matrix” and “network” organizational structure is

Answer 41

• Network is a dynamic structure that provides the most flexibility in that it centers around more of a network of usually independent entities that collaborate on a contracted project or product basis rather than in a traditional org. Also called a modular or virtual corporation. (circle structure)
• Matrix org – hybrids of multiple forms of structure
  o composed of dual relationships in which some managers report to two bosses. Your instructors, for example, may report to department heads in their respective disciplines and to a director of undergraduate or graduate programs.

Question 42

Understand and describe key approaches to bureaucratic control & steps in the bureaucratic control process sequence

Chapter 16- “ Bureaucratic Control Systems” + “Approaches to Bureaucratic Control” + “Designing Effective Control Systems”
Focus on= Exhibit 16.3 The Control Cycle, 3 approaches to control, and 5 steps to designing effective control systems described in the text

Answer 42

• The control cycle
  o Setting performance standards
  o Measuring performance
  o Comparing performance against the standards & determining deviations
  o Taking action to correct problems & reinforce successes
• 3 Approaches to control
  a. Feedforward control – future orientated
  i. Takes place before operations begin & includes policies, procedures, and rules designed to ensure that planned activities are carried out properly.
  b. Concurrent control – in the moment
  i. Takes place while plans are being carried out; directing, monitoring & fine-tuning activities as they occur.
  c. Feedback control – gathering data, identify and then carrying out
  i. Uses information about results to correct deviations after they arise.
• 5 steps to designing effective control systems
  1. Establish valid performance standards.
  2. Provide adequate information to employees
  3. Ensure acceptability to employees
  4. Encourage open communication
  5. Use multiple approaches.

Question 43

Explain the need for organizational controls and the types of control mechanisms that exist

Answer 43

• Bureaucratic control
  o Uses formal rules, standards, hierarchies, and legitimate authority. Works best where tasks are certain, and workers are independent.
• Market control
  o Uses prices, competition, profit centers, and exchange relationships. Works best where tangible output can be identified, and market can be established between parties.
• Clan control
  o Involves culture, shared values, beliefs, expectations, and trust. Works best where there is no one best way to do a job and employees are empowered to make decisions.