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491: Strategic Management > Final Exam > Flashcards

Final Exam Flashcards

1
Q

Absolute Cost Advantages

A

When a firm has lower average costs of production in all levels of output compared with rivals.

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2
Q

Adhocracies

A

No bureaucracy or hierarchy. Decision-making authority is diffused and located within organizational members’ areas of specialisation. Co-ordination is achieved informally through mutual adjustment.

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3
Q

Administrative mechanism

A

The process by which decisions concerning production and resource allocation are made by managers rather than the market.

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4
Q

Agency relationship.

A

The arrangement that exists when one person (known as the agent) acts on behalf of another (known as the principal). For example, the arrangements by which the managers of a firm (the agents) act on behalf of its owners (the principals).

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5
Q

Ambidextrous organization

A

An organisation that can handle both gradual and revolutionary change.

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6
Q

Architectural capabilities

A

The ability of a firm to innovate at a product or systems level i.e. to change the way in which component parts fit together.

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7
Q

Barriers to entry

A

The obstacles a firm faces in trying to enter a particular market.

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8
Q

Barrier to exit

A

The obstacles a firm faces in trying to leave a particular market.

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9
Q

Benchmarking

A

The process by which one organisation gathers information on other organisations in order to evaluate and improve its own performance.

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10
Q

Bilateral monopolies

A

A single seller (a monopoly) and a single buyer (a monopsony) in the same market.

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11
Q

Born global companies

A

A company that operates internationally on start-up

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12
Q

Brand extension

A

The use of an established brand name in a new product category.

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13
Q

Business environment

A

All the external influences that affect a firm’s decisions and performance

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14
Q

Business Strategy

A

how a firm competes within a particular industry or market.

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15
Q

Capabilities

A

What organisations are able to ‘do’

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16
Q

Capital expenditure budget

A

the part of a company’s overall financial plan that deals with expenditure on assets such as equipment or facilities

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17
Q

Causal ambiguity

A

the situation where it is difficult or impossible to map the connections between actions and results. When causal ambiguity exists the source of a successful firm’s competitive advantage is unknown.

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18
Q

Clusters

A

Groups of firms that form part of a close networks, usually because of their geographic proximity to each other.

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19
Q

Codifiable Knowledge

A

knowledge that can be written down

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20
Q

Collateralized debt obligations (CDOs)

A

Promises to pay money to investors based on the cash flow generated by the assets on which the CDOs are based, for example in the case mortgage backed CDOs the flow of mortgage repayments.

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21
Q

Competencies Modelling

A

involves identifying the set of skills, content knowledge, attitudes and values associated with superior performers within a particular job category, then assessing each employee against that profile.

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22
Q

Common Ownership

A

The shared possession of assets.

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23
Q

Comparative Advantage

A

A situation in which a country or a region can produce a particular good or service at a lower opportunity cost than rivals.

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24
Q

Competitive Advantage

A

The ability of one firm to earn (or have the potential to earn) a persistently higher rate of profit than rivals who operate in the same market.

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25
Q

Complementary Resource

A

Mutually dependent assets that enhance the value of an industry’s products, for example petrol stations are a complementary resource to cars.

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26
Q

Component competencies

A

the ability of the firm to innovate at the level of component parts or sub-systems

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27
Q

Concentration Ratio

A

the combined market share of the leading firms

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28
Q

Consumer Surplus

A

the difference between the maximum price a consumer is willing to pay for the product and the amount he or she actually pays

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29
Q

Core competencies

A

Corporate culture - refers to the values and ways of thinking that senior managers wish to encourage within their organisation

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30
Q

Corporate culture

A

The values and ways of thinking that are promoted by the senior management team within an organisation

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31
Q

Corporate Governance

A

refers to the set of processes, institutions, regulations and policies that are promoted by the senior management team within an organisation

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32
Q

Corporate incubators

A

are business developments established to fund and nurture new businesses, based upon technologies that have been developed internally, but have limited applications within a company’s established businesses

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33
Q

Corporate planning

A

adopting a systematic approach to setting corporate objectives, making strategic decisions and checking progress towards achieving objectives.

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34
Q

Corporate social responsibility

A

A business organisation’s accountability for the social and environmental as well as the economic consequences of its activities and its commitment to having a positive impact on society

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35
Q

Corporate strategy

A

Strategic decisions concerning the scope of the organization’s activities in terms of the markets and industries in which it competes

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36
Q

Cost advantage

A

When a firm is able to supply an identical product of service to its rivals at a lower cost

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37
Q

Cost drivers

A

The determinants of a firm’s unit costs (costs per unit of output) relative to its competitors

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38
Q

Creative abrasion

A

Friction or differences that generate new ideas

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39
Q

Cross-subsidization

A

Using profits or surpluses generated by one part of a business to support other parts of the business that perform less well

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40
Q

De allo entrants

A

entrants that are established firms from another industry

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41
Q

De novo entrants

A

Entrants that are new start-ups

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42
Q

Differentiation advantage

A

a competitive advantage that is built on providing something unique that is valuable to buyers beyond simply offering a low price

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43
Q

Distinctive competence

A

Those thigns that an organisation does particularly well relative to its competitors

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44
Q

Diversification

A

The expansion of an existing firm into another product line or field of operation

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45
Q

Dynamic Capabilities

A

a firm’s ability to integrate, build or reconfigure its internal and external capabilities in response to rapidly changing environments

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46
Q

Economies of scale

A

Reductions in unit costs that result from increases in the output of a particular product in a given period of time

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47
Q

Economies of scope

A

Reductions in unit costs that result from increase in the output of multiple products i.e. using a resource across multiple activities

48
Q

Emergent Strategy

A

decisions that are derived from the complex process in which individual managers interpret the intended strategy and adapt to changing external circumstances.

49
Q

Emotional intelligence

A

The ability to perceive and understand one’s own and others’ emotions and to manage emotions in a way that facilitate communication, collaboration and relationship

50
Q

Entrepreneurship

A

The process through which individuals identify opportunities, allocate resources, create value and assume risk for new ventures

51
Q

Evolutionary strategy

A

A strategy that involves incremental rather than radical change. In the context of high-tech industries an evolution strategy is often used to describe the decision by a firm to retain backward compatibility with earlier products.

52
Q

Firm as property

A

a viewpoint that sees management’s responsibility as acting in the interests of shareholders.

53
Q

Firm as social entity.

A

a viewpoint that sees management’s responsibility as acting in the interests of a broad set of stakeholders and making a positive contribution to society at large.

54
Q

First-mover advantage

A

Refers to the advantages that an intial occupant of a strategic position or niche gains by pre-empting the best resources or by using early entry to build superior resources and capabilities.

55
Q

Fixed Costs

A

costs that do not change when a firm’s output changes.

56
Q

Franchise

A

A contractual agreement between the owner of a business system and trademark (the franchiser) and a licensee (franchisee) that permits the franchisee to produce and market the franchiser’s product or service in a specified area

57
Q

Functional analysis

A

Identifying organisational capabilities in relation to each of the principal functional areas of the firm e.g. operations, sales and distribution etc.

58
Q

Global industries

A

Industries which internationalise thorugh both trade and direct investment is important

59
Q

Hierarchy

A

An ordered grouping of people with an established pecking order

60
Q

Horizontal Diversification

A

The extension of the firm’s activities into areas that are at the same stage of the production process as its existing activities

61
Q

Human resources

A

The people who staff and run an organisation

62
Q

Hypercompetition

A

A situation characterized by intense and rapid competitive moves, where firms constantly strive to build (new) advantages and erode the advantages of their rivals

63
Q

Incumbency advantage

A

the advantages experienced by existing competitors in an industry or market relative to new comers

64
Q

Industry life cycle

A

The notion that industries, like products, go through distinct phases which comprise introduction, growth, maturity and decline

65
Q

Innovation

A

is the initial commercialisation of invention by producing and marketing a new good or service by using a new method of production

66
Q

Intellectual property

A

creative products of the mind that have commercial value, for example literary or artistic works or ideas for new products or processes

67
Q

Intended strategy

A

the strategy as conceived of by the top management team

68
Q

Internal capital market

A

the mechanism by which the headquarters allocates funds to various divisions of the business

69
Q

Internal environment

A

All the factors within an organisation that affect its strategic decision-making and performance for example, its organisational structure, management systems and human resources

70
Q

Intangible resources

A

assets that you cannot touch or see but that add value

71
Q

Invention

A

The creation of new products and processes through the development of new knowledge or from new combinations of existing knowledge.

72
Q

Isolating mechanisms

A

The barriers that protect a firm’s profits from being driven down by the competitive process

73
Q

Key success factors

A

those factors within the firm’s market environment that determine the firm’s ability to survive and prosper

74
Q

Lead time

A

is the time it will take followers to catch up

75
Q

Long-term contract

A

A contract involving a commitment to undertake agreed activity over several time periods

76
Q

Market failure

A

when resources cannot be allocated efficiently of effectively because of a break down in the price mechanism

77
Q

Multidomestic industries

A

industries that internationalise through direct investment in overseas markets

78
Q

Network effects

A

the effect that one user of a good or service has on the value of that good or service to other people

79
Q

Network externalities

A

The change in the benefit that an individual derives from a good or service when the number of other individuals consuming the same good or service changes

80
Q

Open innovation

A

market-based systems where companies buy in technology and also licensing out their own technologies rather than doing everything ‘in-house’

81
Q

Operating budget

A

A detailed projection of all estimated income and expenses based on forecasted sales revenue during a given period

82
Q

Organisational Capability

A

The firm’s capacity to deploy resources for a desired end result

83
Q

Organisational culture

A

the values, traditions, and social norms that exist informally within organisations

84
Q

Organizational complexity

A

when a business has many divers but interdependent parts that are linked through dense sets of interrelationships

85
Q

Organizational identity

A

refers to what is cenral, distinctive and enduring in an organization that determines organizational members collective sense of who they are

86
Q

Organizational process

A

the sequence of actions through which a specific task is performed

87
Q

PEST analysis

A

an environmental scanning framework that classifies external influences by source i.e. political, economic, social and technological

88
Q

Planned emergence

A

A strategy making process that combines design with emergence i.e. there is a planned strategy but this strategy is continually enacted through decisions that are made by every member of the organisation

89
Q

Positive feedback

A

a response that results in self reinforcing cycle of amplification or growth

90
Q

Producer surplus

A

The diference between the amount that a producer receives from the sale of a good and the lowest amount that producer is willing to accept for that good

91
Q

Product life cycle

A

The notion that products go through distinct stages from their introduction to eventual withdrawal from the market.

92
Q

Property rights

A

the legal rules that govern how individuals can control, transfer and benefit from the assets they possess

93
Q

Public goods

A

a product that one individual can consume without reducing its availability to another individual and from which no consumer can be excluded

94
Q

Public sector

A

organisations that are owned and controlled by government

95
Q

Realized strategy

A

the strategy that is pursued in practice

96
Q

Regime of applicability

A

describes the conditions that influence the distribution of returns from an innovation

97
Q

Relational contracts

A

Agreements based on informal social relationships between transacting partners rather than on formal legal documents

98
Q

Resources

A

Assets that the organisation ‘has’ and that it can use to pursue its objectives

99
Q

Resource-based view

A

A theoretical perspective that highlights the role of resources and capabilities as the principal basis for the firm strategy

100
Q

Resource leverage

A

utilising resource to the maximum advantage

101
Q

Revolutionary strategy

A

a strategy that involves radical rather than incremental change. In the context of high-tech industries a re-evolutionary strategy is often used to describe the decision by a firm to produce products that are not compatible with its earlier offerings.

102
Q

Segmentation

A

The processes of partitioning a market on the basis of characteristics that are likely to influence consumers’ purchasing behaviour

103
Q

Sheltered industries

A

industries that are protected from internatinoal competition

104
Q

Social enterprise

A

Businesses that do not give primacy to shareholders’ interests but instead have philanthropic goals

105
Q

Spot contracts

A

A contract for the immediate sale and delivery of a commodity

106
Q

Stakeholder analysis

A

the process of identifying, understanding and prioritising the needs of key stakeholders so that the questions of how stakeholders can participate in strategy formulation and how relationships with stakeholders are best managed can be addressed

107
Q

Stakeholder approach

A

viewing the business organisations as a coalition of interest groups where top management’s role to balance these different - often conflicting - interests

108
Q

Strategy

A

the means by which individuals or organisations achieve their objectives

109
Q

Strategic innovation

A

creating value for customers from novel products, experiences, or modes of product delivery

110
Q

Strategic management

A

the label given to an approach that places less emphasis on corporate planning and focuses more on competition as the central characteristic of the business environment and competitive advantage as the primary goal of strategy

111
Q

Time-based competition

A

rivalry based on speed to market

112
Q

Tipping

A

movement towards a market situation where the winner takes all i.e. a single firm dominates

113
Q

Trading industries

A

industries in which internationalism occurs primarily through imports and exports

114
Q

Uncertain imitability

A

the situation where there is ambiguity associated with the causes of a competitor’s success.

115
Q

Value chain analysis

A

Separates the activities of the firm into a sequential chain and explores the linkages between activities and to gain insight into the firm’s competitive position and capabilities

116
Q

Vertical integration

A

where a firm extends its activities into the preceding or succeeding stages of the production process

491: Strategic Management (1 decks)

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