l1 Flashcards
what are the four elements that strategy is concerned with?
- long term direction (objectives)
- environment in which operates
- resources at its disposal
- returns to stakeholders
what are the three levels of strategy?
- corporate strategy
- business strategy
- functional strategy
what is corporate strategy?
looks at whole organisation. which businesses should we be in? complex, uncertain decisions. acquisitions, mergers, closures
what is business strategy?
looks at each distinct part within a business, such as product or business unit. how should we achieve success?
what is functional strategy?
looks at different functional areas within business. eg. R&D, finance, HR, IT, sale, distribution, production, purchasing. strategies enact mgt policies to support units in achieving corporate strategy goals
how do ethics impact strategy?
- some may not consider certain lines of business for ethical reasons
- may want to review how sustainable practices are
- may want to incorporate CSR initiatives into future strategies
what are the 6 elements to consider when planning a mission statement?
- why do we exist?
- what are we providing?
- who is it for?
- what are our values?
- which markets?
- what is our competitive advantage?
give 3 benefits of a mission statement.
- instils core values
- communicates nature of organisation to stakeholders
- helps strategic planning as goals set on basis of statement
give 3 criticisms of a mission statement.
- PR exercise
- full of generalisations & meaningless terms
- may be ignored by mgt
what are the 5 elements of a mission statement?
- purpose
- strategy
- policies
- standards of behaviour
- values
what is the SMART acronym used for and what does it stand for?
used to set objectives to achieve mission statement.
Specific
Measurable
Achievable
Relevant
Time bound
what are the three different timescales for planning?
short term (1-3yrs)
medium term (3-10yrs, 5yrs)
long term (10+yrs)
give 5 influences on planning horizons.
- ownership
- capital structure
- nature of industry
- quality / nature of mgt
- business environment
give 4 potential conflicts between major stakeholders.
maximising SH value vs spending profits on CSR initiatives
marketing spend in NFP vs spending money on charity
private equity firm vs family shareholders
director vs director
what is mendelows matrix?
a way to map stakeholders according to their power and level of interest
describe box a in mendelows matrix.
low power, low level of interest - minimum effort
lack of interest & power makes them open to influence. more likely than others to accept decisions and follow instructions
describe box b in mendelows matrix.
low power, high interest - keep informed
stakeholders are interested in strategy but lack power to do anything. mgt need to convince opponents to strategy that plans are justified, otherwise b gain power by joining parties with c and d
describe box c in mendelows matrix.
high power, low interest - keep satisfied
keep stakeholders satisfied to avoid them gaining interest and moving to box d. could involve them reassuring them of outcomes of strategy to stay informed
describe box d in mendelows matrix.
high power, high interest - key players / participation
major drivers of change and could stop mgt plans if not satisfied. mgt needs to communicate plans to them then discuss implementation issues.
