MIDTERM EXAM Flashcards
is the strategy level that concerns
itself with the entirety of
the organization, where
decisions are made with
regard to the overall
growth and direction of a
company.
Corporate Strategy
It takes a
_____________to strategic decision making by looking across all of a firm’s
businesses to determine
how to create the most
value.
portfolio approach
are arguably the most essential and broad-ranging strategy level within an organizational strategy.
Corporate Strategy
The ____________ at a firm focuses mostly on two resources: people and capital. In an effort to
maximize the value of the entire firm, leaders must determine how to allocate these resources to the
various businesses or business units to make the whole greater than the sum of the parts.
allocation of resources
involves ensuring the firm has the necessary corporate structure and related
systems in place to create the maximum amount of value.
Organizational design
looks at the way business units complement each other, their correlations, and decides where the firm will “play” (i.e. what businesses it will or won’t enter).
Portfolio Management
One of the most challenging aspects of corporate strategy is balancing the tradeoffs between risk and
return across the firm. It’s important to have a holistic view of all the businesses combined and ensure
that the desired levels of risk management and return generation are being pursued.
Strategic Tradeoffs
structures will play a big role in how much risk and how much return managers seek
Incentive
is a growth strategy that emphasizes blending businesses together through acquisitions and
mergers which includes horizontal integration and vertical integration.
Integrative growth strategies
are business strategies that companies use to consolidate their position among
competitors.
Vertical integration and
horizontal integration
is a strategy where the organization acquires another competing business.
Horizontal integration
is the process of consolidating into an organization other companies involve in all
aspects of a products or a services process from raw materials to distribution.
It is an integrated growth
strategy adopted by an organization to gain control over its suppliers and distributors, increase the company’s market share, minimize transaction, and inventory costs, and ensure adequate stocks in the
retail stores. Vertical integration can either be backward or forward.
Vertical integration
is another integrative acquisition growth strategy where the organization
buys one of its suppliers.
Backward Integration
is carried out when the integration buys distribution companies that are part
of its distribution chain.
Forward Integration
matrix is a model used to analyze a business’s products to aid with long-term strategic planning.
The matrix helps companies identify new growth opportunities and decide how they should invest for the
future. Most companies offer a wide variety of products, but some deliver greater returns than others.
gives the business a framework for evaluating the success of each product to help the
company determine which ones they should invest more money into and which they should eliminate
altogether. It can also help companies identify a new product to introduce to the market. The matrix is
divided into four quadrants based on market growth and relative market share.
A BCG matrix
% market share of Company A’s product divided by the market share of the
largest competing product. The market growth rate is this year’s industry sales minus the past years
industry sales.
Relative Market Share
High Growth, High Share. A key tenet of a BCG strategy for growth is to invest in “____” as they have high future potential.
Stars quadrant
is a market leader that generates more cash than it consumes.
are business units
or products with a high market share but low growth prospects.
Low Growth, High
Share. Companies are advised to invest in cash cows to maintain the current level of productivity or to
“milk” the gains passively.
A Cash Cow
sometimes also referred to as Pets, are units or products with a low market share and low growth
rates.
Low Share, Low Growth. Companies should liquidate, divest, or reposition
these “dogs.” These business units are prime candidates for divestiture.
Dogs’ quadrant
These parts of a business have high growth prospects but a low market share. They consume a lot of cash
but bring little in return.
High Growth, Low
Share. Companies should invest in or discard these “question marks,” depending on their chances of
becoming stars - to invest if the products have potential for growth, or to sell if they do not.
Question Marks quadrant
The BCG Growth-Share Matrix
is a business management tool that allows companies to identify the
aspects of their business that should be prioritized and which might be jettisoned.
The starting point for any
organizational design is a
realistic__________
that is based on a well-thought-
out strategy.
company structure
provides the framework within strategies are used and provide the
necessary mechanism for its effective implementation and control.
Organizational structure
refers to the system or mode by which a group of individuals can
achieve its desire goals. It outlines how responsibilities and roles are assigned and grouped
throughout an organization.
oragnizational structure
READ
The following are the importance of organizational structure:
* Clear definition of authority, responsibility relationship facilities better understanding of
the objectives and the policies of the enterprise.
* Organizational structure lays down both channels and the patterns of communication. It
facilitates proper administration.
* It helps to coordinate activities of the component parts to facilitate the realization of the
goals of the organization.
* It helps in growth and diversification of the activities of an organization.
* Workers, participation in organization increases their cooperation and improves their will
to work. It stimulates initiation and creative thinking.
* Implementation of policies and the achievement of the goals become easier.
* It prevents duplication of functions and makes it possible to achieve maximum production
with minimum efforts.
is a type of business structure that organizes a company into different
departments based on areas of expertise.
Examples of departments in a functional organization structure
include a
- sales department, a
- production department, a
- human resources department, an information technology
- department, a marketing department, and a legal department.
A functional structure
In this system, the target market is divided
into geographical units according to certain criteria.
have several advantages. First, personnel familiar with the
history of customers in the area, their culture, their preferences, expectations, and habits
of living can cultivate the local markets. Second, the company and its sales force can respondquickly to changes in the competitive environment. Third, there is closer contact between
managers familiar with the territory and their subordinates. Finally, because management
is familiar with local conditions, it can make quicker strategic decisions.
Territorial Organizational Structure
is a framework in which a business is organized in separate
divisions, each focusing on a different product or service and functioning as an individual unit
within the company. It defines how a company’s resources and personnel are allocated to design,
develop, and manage products.
This structure promotes efficient decision-making, collaboration,
and innovation by aligning employees’ skills and expertise with the organization’s goals and
product strategy.
Product Organizational Structure
READ PLS
There are four courses of action that an organization can implement to improve or replace any
product management structure. They are:
1. Conducting training programs in forecasting, interpersonal skills, planning, motivation,
and control to improve the ability of product managers to do the job.
2. Switching from a marketing manager to a marketing team that implements activities to
market the product effectively.
3. Eliminating product managers of minor brands and consolidating them with other
products. This feasible when the product line appeals to similar consumers or industrial
users.
4. Establishing divisions around the major company products and using functional structural
arrangements within the divisions. Despite the problems involved in the product
structure, this organizational form can be successful.
The key to performance is top management support with reasonable budget, planning and
resource allocation. Without to management support, product/brand managers will experience
difficulty in gaining the cooperation of those from the advertising, marketing research, and sales
divisions.
This division structure raises the issues of whether any marketing functions should be performed
at the corporate staff level.
SBU Organizational Structure
firm. Generally speaking, the size of the firm will indicate the complexity of its
organization. A firm producing and selling in a restricted territory may find the functional
organization the best form for their purposes, whereas a larger firm which produces several products and sells to a wider market may opt for a regional form of organization
to maximize selling efforts.
Size of the firm.
The nature of the product or products to be sold is another factor that
influences the choice of an organizational structure. Consumer and industrial goods may
require different types of services from the producer.
The products.
Characteristics of the market like geographic dispersion, income class, and
buyer behavior need to be considered in organizing the market unit. If markets are
concentrated, the stakeholders may find it easier to sell directly to the customers.
The market
A final factor that affects the structure of an organization is
the management philosophy prevailing in the company.
Philosophy of management.
in an organization involves a comparison of actual
performance with the pre-established standards or plans.
Facilitating control
The coordination of individual actions is often called ________. A firm
employing several specialists and line officers at different levels may still produce
ineffective results if efforts are not properly coordinated.
team effort
markets are dynamic and subject to change, it is essential
for managers to gather information in order to anticipate changes and mad decisions
accordingly.
Providing information.
A firm can choose from the simplest to the most complex type of
organization.
three important factors – the
organizational information it desires, the organizational control it wishes to employ,
and the costs of organizing its personnel. The
Cost of the system.
To be able to cope with the dynamic and changing environment, the firm
should have an organization that can adjust to changes, _________ is necessary to attain
good performance.
Flexibility.
is an entity composed
of people that it structured and
managed in such a way that it is able to
achieve its set goals and objectives.
An organization
refers to the administrative supervision of an organization. It includes leadership,
the organization’s vision-mission, goals, and objectives to attain organizational success.
Management
Is foremost in the management of any business. A good leader, regardless of whether
he owns or works for the organization, is someone who inspires his employees and stretches
them to their optimum productivity.
Leadership.
Aside from the management, _______ constitute a significant part of the
organizational milieu.
Employees.
three levels of
relationships. They are
employee satisfaction,
employee involvement, and
employee
commitment.
It is an emotional state where the employee experiences a
feeling of content in the workplace.
“to be satisfied with his
job”.
Employee satisfaction.
Satisfied with his work conditions, an employee may graduate
to a higher level of organizational relationship called ______________
Employee involvement
This degree of employee relationship is further heightened
when the employee reaches the highest level that is _________
“sense of owning”
Employee commitment
These ____________may be simple and crude as long as
they are functioning and producing the desired output. On the other hand, organizations with
sufficient capitalization, use the most sophisticated and the latest machinery and technology.
facilities and equipment
The ________ of an organization determine the direction the
organization will take and affect its capability to realize its set business goals and objectives.
financial resources
The organizational milieu includes company policies, which are the
lifeblood of an organization. They put organizational structure and system in place.
Organizational policies.
refers to the systematic process of planning, acquiring, operating,
maintaining, and disposing of an organization’s assets.
is the application of Asset
Management across the entire utility of an organization. It aims to produce value
as improved utility asset performance, reduction of risk, reduction in costs, and
creation of new opportunities.
It is a long-term planning and approach for maintenance and operations in
which a long-term plan is made. This plan could be for the next five (5) years,
ten (10) years or even twenty (20) years. In
Strategic asset management
Strategic asset management
enables organizations to minimize
unnecessary expenses related to
asset ownership, maintenance, and
replacement.
Cost reduction
ensuring that assets are used to their full potential. By tracking
asset performance and utilization, businesses can identify bottlenecks or
inefficiencies in their operations and take corrective action. This can lead to
improved productivity, reduced downtime, and increased output, all of which
contribute to the bottom line.
Operational efficiency
Strategic asset management can help businesses mitigate risks by ensuring that
assets are properly maintained and that potential failures are identified and
addressed before they cause disruptions.
Risk mitigation
Businesses that leverage asset management strategies gain a significant edge by
extending the lifespan of their assets, reducing operational costs, and achieving
optimal performance.
Competitive advantage
SAM relies heavily on collecting and analyzing asset data through advanced fixed
asset tracking tools.
Data-driven decisions
inventories all of the physical components of the facility. It is the most straightforward aspect of asset management.
The information should be kept up to date and any inaccurate information should be revised as soon as the errors are
discovered.
take digital pictures of the
assets that are visible. It helps in the data collection process and it creates a
permanent record of the assets.
Current state of the assets
enables to set goals for the facility regarding what services
you want to provide.
establishes what you want your assets to
provide.
Level of service
enables a manager to determine which assets are the most vital to the
sustained operation of the facility.
is the heart and
soul of asset management. Understanding criticality allows a manager to make
informed decisions about the best way to use the limited financial and personnel
resources.
Criticality
uses the information regarding the first three components –
what assets the facility owns, what you want them to do and which ones are
critical to the sustained operation to make informed decisions about operation
and maintenance and asset replacement.
This portion of the process is the most
complex, but allows the best use of limited resources. The facility managers must
make decisions regarding how they will operate and maintain their assets as well
as deciding when to continue to repair an asset versus replacing or rehabilitating
it.
Life cycle costing
In this component, the facility
managers must determine how much money they need to operate and maintain
the assets and how much they need to replace or rehabilitate the assets over
time.
Long-term funding
is a strategic and analytical approach to the management of
a business’s assets.
asset life cycle
helps to establish the requirement of an asset, based on the evaluation
of existing assets. This is done by introducing a management system that can
analyze trends and data. Allowing the decision-makers to identify the need for
the asset and what value it can add to operations.
Planning
Once an asset has been identified, the next stage is to purchase it. This means
that an asset has been properly analyzed and identified as a much-needed
resource to improve business operations.
Acquisition
the longest phase of an asset life cycle. This stage indicates the application and
management of the asset, including any maintenance and repair that may be
needed.
asset ages and wear and tear increases,
Operation and Maintenance
at the end of an asset’s useful life, it is removed from service and either
sold, re-purposed, thrown away, or recycled. Although at this stage an asset has
no business value, it may still need to be disposed of efficiently to ensure it does
not harm the environment. This process could even involve dismantling the asset
piece by piece or wiping it clear of data.
Disposal
involves the management of physical assets
throughout their lifecycle with the singular purpose of helping the organization
realize its goals.
Strategic Asset Management
Develop and maintain a detailed inventory of all organizational assets, including
their specifications, locations, conditions, and maintenance histories.
Maintain a comprehensive item inventory
Effective asset management involves managing the entire lifecycle of an asset,
from acquisition to disposal.
Implement asset lifecycle management
mplement asset management software and other automated systems to
streamline processes, improve data accuracy, and enable real-time monitoring
and analysis of asset performance.
Leverage technology and automation
I
Establish a comprehensive preventive maintenance program to proactively
identify and address potential issues before they lead to asset failures or costly
breakdowns.
Prioritize preventive maintenance
This approach helps organizations get the most value from their investments and
reduces the need for unnecessary asset acquisitions.
Optimize asset utilization
Develop and implement standardized processes and procedures for asset
management activities, including acquisition, operation, maintenance, and
disposal.
Standardize processes and procedures
Invest in comprehensive training programs for employees involved in asset
management activities. Well-trained personnel can effectively operate, maintain,
and troubleshoot assets, contributing to improved asset performance and
longevity.
Empower employees with training
Treat asset management as an ongoing process of continuous improvement.
Regularly review and update strategies, processes, and technologies to adapt to
changing business needs, technological advancements, and industry best
practices.
Continuously improve and adapt
ACHIEVE BUSINESS GOALS AND CUT DOWN COSTS WITH STRUCTURED
ASSET MANAGEMENT
Strategic asset management helps organizations optimize their investments,
reduce costs, and gain a competitive advantage.
are intended to steer the company towards its
long-term strategic direction. It is also is considered as the process
of monitoring the various strategies of the organization and
determining whether there is a parallelism between the
organizational milieu and that of the environment.
It is concerned with tracking the strategy as it is being
implemented, detecting problems or changes in the premises and
making necessary adjustments.
Strategic controls
is designed to check systematically
and regularly whether the arguments set during the planning
and implementation processes are still binding or valid. If an
important premise is no longer valid, the strategy may have to
be changed.
Presupposition control
is applied to evaluate whether the
intermediate strategies are consistent with the overall strategy.
The purpose of _____________ is to evaluate as to
whether the business plans, programs and projects are actually
guiding the organization towards its pre-determined goals or
not.
is nothing but strategic rethinking
to avoid wastes of all kinds.
Implementation control
is a monitoring system whereby a
broad range of occurrences inside and outside the organization
threatens the implementation of an organization’s strategy.
Surveillance means shadowing, observing, and scrutinizing the
environment.
Strategic surveillance
is a special type of strategic control that is
applied when immediate reconsideration of an organization’s
strategy is pursued. It is also considered as a trigger mechanism
for a rapid response and immediate reassessment of a given
strategy in the light of a sudden and unexpected event.
It can be exercised through
the formulation of contingency strategies and assigning the
responsibility of handling unforeseen events to crisis
management teams when it is necessary.
Vigilance control
is the traditional way of looking
at strategic monitoring.
Sequential strategic control
is the more appropriate
approach for strategic control.
Interactive strategic control
it is the combination of sequential
strategic control and interactive strategic control approaches.
Feedback strategic control
is accurately measured by performance,
market performance, efficiency/productivity performance and people
performance.
Feedback strategic control
are measurable data used to track processes
within a business using activities, employee behavior and productivity as key metrics.
are a collection of data that employers evaluate against an established
objective (like employee productivity or sales objectives).
Performance metrics
track and assess specific processes
within a business, such as sales, marketing and profitability. This
allows for comparing data against established objectives or goals.
Business performance metrics
are important metrics to track
because this data can determine whether an investment will
result in a return (profit) or not.
ROI indicators
is an essential performance metric
that tracks a business’s profit margin and compares that data
to target goals.
Profitability
metrics measure the ratio of work
generated to the resources used.
Productivity
measure an individual’s or a team’s performance in
sales of a business’s products or services.
Sales metrics
can include sales action, lead generation and retention and key performance indicators like total revenue and
customer reach.
Common sales performance metrics
metrics provide data on what a business’s
sales people are doing daily. Sales managers can influence sales
activity (like implementing daily sales quotas or a minimum
number of sales phone calls), making it manageable to track.
Activity
metrics are important to
track so businesses can assess the prospect stage of acquiring
new sales. Average lead response time and percentage of
follow-ups are two examples of good lead generation metrics to
track in sales.
Lead generation
metrics track the rate at
which a sales person or team meets revenue goals. The less time
it takes for a revenue goal to be met, the higher the sales
productivity.
Sales productivity
are used to measure the
effectiveness and profitability of a project.
Project management performance metrics
Tracking productivity provides data that enables
a project manager to assess resources used to complete the
project and total effort made within the project parameters.
Productivity
Metrics that measure a project’s scope provide
data that can help determine the timeline and budget needed to
complete the project.
Scope of work
metrics
measure the quality of the project’s deliverable at its completion
and include customer-centric data.
Quality and satisfaction
metrics are key performance metrics to track in
project management.
Cost
is the difference between the total
cost of the project and the revenue it generates for an
organization.
is a key performance metric and is
usually targeted at the beginning of a project, keeping the
process focused on a set revenue goal.
Gross margin
assess employees’ productivity and
efficiency in reaching established benchmarks that contribute to the
overall growth of a business.
Employee performance metrics
Measures an organization workplace approach
that is designed to ensure that its employees are committed to
the organization’s goals and values, are motivated to contribute
to organizational success,
Engagement
Measures employee satisfaction in terms of whether the employees are happy and content and whether the
organization is able to fulfill their desires, needs and
expectations at work.
Satisfaction
Is an index that measures leadership in the ability
of the management of an organization to make sound decisions
and inspire others to perform well.
Leadership
are used to measure the quality
of employee performance.
Work quality metrics
Is another employee performance
metric to track as it is easier to measure than quality.
Work Quantity
combine data from work
quality and quantity to track the resources used to produce an
output.
Work efficiency metrics
Measures the degree of motivation by which an
individual or the entire organization is inspired to do their best
in any of their undertakings.
Motivation:
is a key performance
metric that can help businesses change processes, behavior
and meet target goals.
Employee productivity
Are financial indicators show the organization or the company’s
ability to generate earnings as compared to its expenses and other
relevant cost incurred during a specific period.
PROBABILITY MEASURES
Are financial indicators that measures the extent to when an
organization has a cash to meet immediate and short-term
obligations.
LIQUIDITY MEASURES
refers to the end results of these policies—the
relationship of selling price to costs, the size of output, the efficiency
of production, progressiveness in techniques and products, and so
forth.
Market Performance
