Exam 3 Flashcards
Acquisition
A strategy through which one firm buys a controlling interest in another firm with the intent of making the acquired firm a subsidiary business within its portfolio
Merger
A strategy through which firms agree to integrate the entities on a relatively coequal basis
Takeover
An acquisition I. Which the target firm did not solicit the bud of the acquiring firm (unfriendly). Take over implies acquiring firm is larger than target; reverse takeover of the target is larger than the acquirer
Reasons for acquisitions
Increased market power, overcoming entry barriers, cost of new product development and increased speed to market, lower risk than new products, increased diversification, reshaping competitive scope, leaving and developing new capabilities
problems in achieving success with acquisitions
Integration difficulties, inadequate evaluation of target, large debt, inability to achieve synergy, too much diversification, overly focused on acquisitions, too large
Organization design
The deliberate process of how a company will. Create, use and configure structures, systems and processes, and cultural practices to create an effective organization capable of achieving and exciting strategy
Hard infrastructure
Organizational structure and systems
Soft infrastructure
Culture and norms
An organizations ability to execute strategy depends on its…
Hard and soft infrastructure
Organizational design is made up of..
Structure, systems and controls, and culture
Structure
Assigning employees to value creation activities that are linked to achieve efficiency, quality, innovation, and responsiveness to customers
Benefits of structure
Defines jobs and tasks, defines communication channels, prescribes how individuals and teams coordinate their work efforts, hierarchy of authority
Types of organization
Talk or flat
Components of external stakeholders
Customers, suppliers, creditors, governments, unions, local communities, general public
Internal stakeholders
Stockholders, employees, managers, board members
What matters most for structure in order to successfully execute strategy
clarifying decision, designing information flows, aligning motivators, making changes to organizational structure, enhancing communication mechanisms
Strategic controls
Allow managers to monitor and evaluate if te business model is working as intended and how it can be improved
Balanced scoresheet
Managers develop strategic objectives for the balanced scorecard by answering Key questions (how do customers view us? How do we create value?)
Triple bottom line
Performance targets beyond profits 1. People (social concerns) 2. Planet (environmental concerns) 3. Profits (economic concerns)
Implications for the strategist
Better strategy, integrative nature of strategy, tools to measure performance, quantitative and qualitative measures
Culture
Describing the collection of values, norms, beliefs and attitudes shared by people and groups within an organization
Characteristics of strong and adaptive corporate culture
Bias for action, organizations mission, employees motivated to do their best
