Extra chapter

Question 1

What does Strategic management do?

Answer 1

1.Considers organization’s environment to identify opportunities and threats as well as internal strengths and weakness.
2.Provides direction and intent to organization
3.Identifies ways of creating value for stakeholders
4.Provides a system for coordinating management activities
5.Understanding internal and external environments is key to organization planning-can adapt to changes

Question 2

Overall purpose of strategic management

Answer 2

Overall purpose is to ensure consistency in the management of the organization

Question 3

Highest level

Answer 3

Corporate-level strategy is concerned with managing the multi-business corporation and is the domain of the corporate board of directors

Question 4

Next level

Answer 4

Seek sources of sustainable competitive advantage. Provides the framework for functional managers to develop and implement functional strategies.

Question 5

Lowest level

Answer 5

It is the responsibility of supervisors or first-line management to manage from day to day in line with the overall strategic direction of the organization

Question 6

External consistency

Answer 6

Consistent with the opportunities and threats presented by the external environment

Question 7

Dynamic consistency

Answer 7

Consistent with the core and distinctive capabilities of the organisation

Question 8

Internal consistency

Answer 8

Policies and procedures have to be aligned with the chosen strategic direction of the organisation

Question 9

Good strategic management process leads to three outcomes

Answer 9

1.Optimizes consistency between different levels of management
2.Optimizes consistency between the organization and internal and external environments
3.Leads to sustained performance higher than the industry norm.

Question 10

Strategic management process

Answer 10

1.Strategic direction
2.Strategic objectives
3.External environment
4.Internal analysis
5.Strategic choice
6.Strategy implementation
7.Strategy control

Question 11

Strategic direction and objectives(in terms of vision)

Answer 11

1.Should serve as inspiration to stakeholders
2.Should be short enough to remember
3.Should be closely identified with the organisation
4.Contains an indication of the future direction of the organisation

Question 12

External environmental analysis

Answer 12

1.Identify opportunities and threats
2.Opportunities allow the organization to meet or exceed strategic objectives
3.Threats constrain the ability of the organization to meet objectives
4.Threats may threaten the existence of an organization

Question 13

Internal analysis

Answer 13

1.Discover what an organization is better at than its competitors
2.Uncover key weaknesses that could prevent the organization from attaining objectives or make it vulnerable to its competition
3.Roles of resources and core capabilities has become increasingly important
4.Approach suggests organizations can be successful by exploiting their assets and capabilities

Question 14

Strategic choice

Answer 14

Differentiation strategies
Cost leadership strategies
Focus strategies

Question 15

Differentiation strategies

Answer 15

Competitive advantage stems from higher prices that customers are willing to pay for perceived quality of product

Question 16

Cost leadership strategies

Answer 16

Competitive advantage stems from its ability to produce products and services at lower production costs than competitors

Question 17

Focus Strategies

Answer 17

Organization attempts to gain dominance in narrow segment of the market through differentiation or cost leadership

Question 18

Strategy implementation

Answer 18

Alignment of business and functional strategies
Leadership and culture:
Routines, rituals, stories, symbols, power structures, control systems, organization structure, Paradigm
Creation of technology systems and organizational processes to support the strategy:
Competencies, technology and processes

Question 19

Strategic control

Answer 19

1.Forward looking as well as backward looking
2.Have internal and external focus
3.Be able to manage by exception
4.Be actionable
5.Be systematic

Question 20

Aspects of strategic control

Answer 20

Competitive intelligence
1.Human intelligence
2.Customers
Business intelligence systems(BIS)
1.Online analytical processing(allows users to compare data based on a criteria)
2.Data mining(designed to explore data in search of consistent patterns)
3.Executive ISs(operational data presented in the form of charts and tables)
4.Strategy alignment(refers to the alignment of business-unit functions with the functions of info for effective use of info)
Integrating mechanisms(role is to ensure that all available data is integrated, analyzed, and presented to management decision-makers in such a way that it supports the decision-making process)
1.CI officers or analysts
2.Processes like scenario analysis and planning
3.Technology

Question 21

Strategic direction and objectives(in terms of mission)

Answer 21

Current focus and long-term purpose of the organization
provides mechanism to ensure internal consistency
Objectives should not only be financial, should follow SMART

Question 22

Alignment of business and functional strategies

Answer 22

Ensuring that functional strategies support the business level strategy directly or indirectly

Question 23

Leadership and culture

Answer 23

The leaders of the organization play a critical role in ensuring that the culture of the organization is aligned with the strategic direction

Question 24

Competencies ,technology and processes

Answer 24

Individuals have the right competencies, different technologies can play a role in the strategy implementation, production and information and communication strategies, all integrated in processes to deliver

Question 25

Two categories of quality

Answer 25

Form, content, time-information is only valuable if it is in the right format for use, appropriate for use and is available when required

Question 26

Richness and reach of information

Answer 26

The information developed should be meaningful and evocative enough to respond to the need, and its sources should be trustworthy

Question 27

Competitive intelligence

Answer 27

Refers to those environmental scanning activities that the organisation undertakes constantly to monitor its external environment

Question 28

Business Intelligence

Answer 28

Integrate various information systems with a view to making the information available to decision-makers in the organization