Midterm Study Guide Flashcards
Management is about getting the right work done well by
(1)implementing processes and practices to develop and deliver competitive advantage and superior performance in innovative and socially responsible organizations and (2) developing and using the critical skills that individuals need to know and have in order to: work more effectively with others in organizations, to work well in team, and to lead teams and organizations successfully.
Scientific Management
management practices based on the scientific method resting upon clearly defined laws, rules, and principles
Human Relations Management Theory
Theory based on the human and social aspects of work where corporations are viewed as social institutions, people want to find meaning in their work and will contribute in positive ways if the work is well designed, and workers will be most productive if they are respected and if managers rely on workers to motivate themselves and solve problems on their own.
Strategic Management
is the set of decisions and actions that result in the formation and implementation of plans designed to achieve a company’s objectives. Strategic management theory arose of the need to create and maintain a competitive advantage by adapting to external economic environment of the firm.
Strategy
is a company’s action plan for outperforming its competitors and achieving superior profitability.
Competitive Advantage
meeting customer needs more effectively, with products or services that customers value more highly, or more efficiently, at lower cost.
Sustainable Competitive Advantage
is giving customers lasting reasons to prefer a firm’s products or services over those of its competitors.
Business Model
How the business will make money by providing customers with value (the firm’s customer value proposition) and by generating revenues sufficient to cover costs and produce attractive profits (the firm’s profit formula).
Strategic Vision
Delineates management’s future aspirations for the business to its stakeholders by providing direction, setting out compelling rationale (strategic soundness) for the firm’s direction, and uses distinctive and specific language to set the firm apart from its rivals.
Core Values
are the beliefs, traits, and behavioral norms that employees are expected to display in conducting the firm’s business and in pursuing its strategic vision and mission.
Mission Statement
Describes the firm’s current business and purpose—“who we are, what we do, and why we are here.”
Objectives
are an organization’s performance targets – the specific results management wants to achieve
Strategic intent
is the relentlessly pursuit of a strategic objective by a firm through the concentration of the firm’s resources and competitive actions on achieving that goal, that result in quantum gains and involves establishing a grandiose performance target out of proportion to immediate capabilities and market position but then devoting the firm’s full resources and energies to achieving the target over time.
Stretch objectives
are objectives that challenge a firm to perform at its full potential, push the firm to be more inventive, increase the urgency for improving financial performance and competitive position, and cause the firm to be more intentional and focused in its actions.
Financial objectives
relate to the financial performance targets management has established for the organization to achieve.
Strategic objectives
relate to target outcomes that indicate a company is strengthening its market standing, competitive vitality, and future business prospects.
Strategic Plan
consists of a firm’s strategic vision, business mission, and core values, a firm’s strategic and financial objectives and the firm’s chosen strategy.
Macro-environment
encompasses the broad environmental context in which a company’s industry is situated that includes strategically relevant components over which the firm has no direct control.
PESTEL Analysis
Focuses on principal components of strategic significance in the macro-environment, Political factors, Economic conditions (local to worldwide), Sociocultural forces, Technological factors, Environmental factors (the natural environment), and Legal/regulatory conditions.
Five Competitive Forces (Porter)
is a powerful and widely used tool for diagnosing the principle competitive pressures in a market that includes the following forces: Competition from rival sellers, Competition from potential new entrants, Competition from producers of substitute products, Supplier bargaining power, and Customer bargaining power.
Strategic Group
consists of those industry members with similar competitive approaches and positions in the market: (1) Having comparable product-line breadth, (2) Emphasizing the same distribution channels, (3) Depending on identical technological approaches, (4)Offering the same product attributes to buyers, and (5) Offering similar services and technical assistance.
Key Success Factors (KSFs)
are the strategy elements, product and service attributes, operational approaches, resources, and competitive capabilities that are necessary for competitive success by any and all firms in an industry and vary from industry to industry, and over time within the same industry, and in importance as drivers of change and competitive conditions change.
Industry attractiveness
is whether the industry environment presents a company with good opportunity for above-average profitability; the industry outlook is fundamentally unattractive if a company’s profit prospects are unappealingly low.
Competitive Assets
are the firm’s resources and capabilities and are the determinants of its competitiveness and ability to succeed in the marketplace.
Resource
is a productive input that is owned or controlled by a firm. Can be tangible (e.g., plant/equipment) or intangible (e.g., people/intellectual capital).
Capability
is the capacity of a firm to perform some activity proficiently (e.g., superior skills in marketing).
VRIN Testing
assessment of the competitive power of a firm’s resources and capabilities based on whether it is competitively valuable, rare, hard to copy (inimitable), and if the resource is invulnerable to the threat of substitution from different types of resources and capabilities (non-substitutable).
SWOT Analysis
a tool for sizing up a firm’s: Internal strengths (the basis for strategy); Internal weaknesses (deficient capabilities); Market opportunities (strategic objectives); and External threats (strategic defenses).
Competence
is an activity that a firm has learned to perform with proficiency—a capability.
Core Competence
is a proficiently performed internal activity that is central to a firm’s strategy and competitiveness.
Distinctive Competence
is a competitively valuable activity that a firm performs better than its rivals.
Weakness (Competitive Deficiency)
is something a firm lacks or does poorly (in comparison to others) or a condition that puts it at a competitive disadvantage in the marketplace.
Value Chain
identifies the primary activities that create customer value and related support activities.
Five types of Generic Strategies:
Low-Cost Provider, Broad Differentiation, Focused Low-Cost, Focused Differentiation, and Best-Cost Provider.
Low-Cost Provider
Striving to achieve lower overall costs than rivals on products that attract a broad spectrum of buyers.
Broad Differentiation
Differentiating the firm’s product offering from rivals’ with attributes that appeal to a broad spectrum of buyers.
Focused Low-Cost
Concentrating on a narrow price-sensitive buyer segment and on costs to offer a lower-priced product.
Focused Differentiation
Concentrating on a narrow buyer segment by meeting specific tastes and requirements of niche members.
Best-Cost Provider
Giving customers more value for the money by offering upscale product attributes at a lower cost than rivals.
Organizational Design
The process by which managers create a specific type of organizational structure and culture so that a company can operate in the most efficient and effective way.
T-Shaped jobs
Experts in a discipline PLUS intimately acquainted with the potential systemic impact of their tasks in interaction with other specialties.
Organizational Structure
A formal system of task and reporting relationships that coordinates and motivates organizational members so they work together to achieve organizational goals.
Functional Structure
An organizational structure composed of all the departments that an organization requires to produce its goods or services.
Product, Market, and Geographic Structures
Each of these divisional organizational structures assigns enterprise resources (people/other assets) to specific markets (product segments, market segments, geographic areas) in order to use those resources more effectively/efficiently than in a functional structure.
Matrix structure
an organizational structure where people and resources are grouped in two ways simultaneously: by function and by product. This structure is very flexible and each person in a product team reports to two managers: (1) a functional boss, who assigns individuals to a team and evaluates their performance from a functional perspective, and (2) the boss of the product team, who evaluates their performance on the team. Thus team members are known as two-boss employees.
Product team structure
is an organizational structure in which employees are permanently assigned to a cross-functional team and report only to the product team manager or to one of his or her direct subordinates.
Integration Mechanisms for Organizational Design
strategy, structure, culture, monitoring systems, and incentive systems.
Authority
the power to hold people accountable for their actions and to make decisions concerning the use of organizational resources.
Span of control
the number of subordinates who report directly to a manager.
Hierarchy of authority
An organization’s chain of command, specifying the relative authority of each manager.
