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.
