Lecture 7/8 - Strategy & Management Preferences

Question 1

What are the 3 roots of strategic preferences?

Answer 1

1. Basic Needs
2. Beliefs
3. Job Context/Situational Pressures

Question 2

What do we mean by the “basic needs” of management?

Answer 2

The central aspects of the manager’s personality. These needs are stable and hard to change. They play a significant role in influencing strategic preferences.

Examples: need for achievement, power, security, recognition, etc.

Question 3

How does management’s beliefs impact their strategic preferences?

Answer 3

Management’s beliefs direct their preferences towards specific strategic initiatives and responses. They can vary from deep to casual and can change over time.

Question 4

How do job context and situational pressures influence management’s preferences?

Answer 4

What the manager does and the expectation of others define the scope and nature of manager’s responsibilities, performance assessment, and rewards.

Question 5

What are some personal elements that influence a manager’s strategic preferences?

Answer 5

• Country of birth
• Age
• Gender
• Education
• Culture
• Work background
• Personal interests

Question 6

What are the 5 steps of Management Preference Analysis?

Answer 6

1. Develop/analyze the strategy.
2. Identify required management preferences for the proposed strategy
3. Test the strategy - management preferences link (Compare REQUIRED preferences with OBSERVED preferences)
4. Develop gap-closing analysis (if the costs of closing the gaps/ chance of SUCCESSFULLY closing the gaps is successful, move the proposal forward)
5. Move to the next step of Diamond-E analysis

Question 7

What impact does the Board of Directors (Corporate Governance) have on organizations?

Answer 7

Managers can act in their own self-interest. Therefore, the board of directors is in place to:

• Ensure strategic direction is in the best interest of the corporation (stakeholders)
• Monitor management behaviour

Question 8

What are some ways to address governance shortcomings?

Answer 8

• Majority of the board members should be independent
• The board should be diverse (racially, culturally, genders, etc.)
• Board members must be expert
• Board members need better access to information