Midterm Study Guide

Question 1

Management is about getting the right work done well by

Answer 1

(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.

Question 2

Scientific Management

Answer 2

management practices based on the scientific method resting upon clearly defined laws, rules, and principles

Question 3

Human Relations Management Theory

Answer 3

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.

Question 4

Strategic Management

Answer 4

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.

Question 5

Strategy

Answer 5

is a company’s action plan for outperforming its competitors and achieving superior profitability.

Question 6

Competitive Advantage

Answer 6

meeting customer needs more effectively, with products or services that customers value more highly, or more efficiently, at lower cost.

Question 7

Sustainable Competitive Advantage

Answer 7

is giving customers lasting reasons to prefer a firm’s products or services over those of its competitors.

Question 8

Business Model

Answer 8

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).

Question 9

Strategic Vision

Answer 9

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.

Question 10

Core Values

Answer 10

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.

Question 11

Mission Statement

Answer 11

Describes the firm’s current business and purpose—“who we are, what we do, and why we are here.”

Question 12

Objectives

Answer 12

are an organization’s performance targets – the specific results management wants to achieve

Question 13

Strategic intent

Answer 13

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.

Question 14

Stretch objectives

Answer 14

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.

Question 15

Financial objectives

Answer 15

relate to the financial performance targets management has established for the organization to achieve.

Question 16

Strategic objectives

Answer 16

relate to target outcomes that indicate a company is strengthening its market standing, competitive vitality, and future business prospects.

Question 17

Strategic Plan

Answer 17

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.

Question 18

Macro-environment

Answer 18

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.

Question 19

PESTEL Analysis

Answer 19

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.

Question 20

Five Competitive Forces (Porter)

Answer 20

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.

Question 21

Strategic Group

Answer 21

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.

Question 22

Key Success Factors (KSFs)

Answer 22

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.

Question 23

Industry attractiveness

Answer 23

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.

Question 24

Competitive Assets

Answer 24

are the firm’s resources and capabilities and are the determinants of its competitiveness and ability to succeed in the marketplace.

Question 25

Resource

Answer 25

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).

Question 26

Capability

Answer 26

is the capacity of a firm to perform some activity proficiently (e.g., superior skills in marketing).

Question 27

VRIN Testing

Answer 27

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).

Question 28

SWOT Analysis

Answer 28

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).

Question 29

Competence

Answer 29

is an activity that a firm has learned to perform with proficiency—a capability.

Question 30

Core Competence

Answer 30

is a proficiently performed internal activity that is central to a firm’s strategy and competitiveness.

Question 31

Distinctive Competence

Answer 31

is a competitively valuable activity that a firm performs better than its rivals.

Question 32

Weakness (Competitive Deficiency)

Answer 32

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.

Question 33

Value Chain

Answer 33

identifies the primary activities that create customer value and related support activities.

Question 34

Five types of Generic Strategies:

Answer 34

Low-Cost Provider, Broad Differentiation, Focused Low-Cost, Focused Differentiation, and Best-Cost Provider.

Question 35

Low-Cost Provider

Answer 35

Striving to achieve lower overall costs than rivals on products that attract a broad spectrum of buyers.

Question 36

Broad Differentiation

Answer 36

Differentiating the firm’s product offering from rivals’ with attributes that appeal to a broad spectrum of buyers.

Question 37

Focused Low-Cost

Answer 37

Concentrating on a narrow price-sensitive buyer segment and on costs to offer a lower-priced product.

Question 38

Focused Differentiation

Answer 38

Concentrating on a narrow buyer segment by meeting specific tastes and requirements of niche members.

Question 39

Best-Cost Provider

Answer 39

Giving customers more value for the money by offering upscale product attributes at a lower cost than rivals.

Question 40

Organizational Design

Answer 40

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.

Question 41

T-Shaped jobs

Answer 41

Experts in a discipline PLUS intimately acquainted with the potential systemic impact of their tasks in interaction with other specialties.

Question 42

Organizational Structure

Answer 42

A formal system of task and reporting relationships that coordinates and motivates organizational members so they work together to achieve organizational goals.

Question 43

Functional Structure

Answer 43

An organizational structure composed of all the departments that an organization requires to produce its goods or services.

Question 44

Product, Market, and Geographic Structures

Answer 44

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.

Question 45

Matrix structure

Answer 45

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.

Question 46

Product team structure

Answer 46

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.

Question 47

Integration Mechanisms for Organizational Design

Answer 47

strategy, structure, culture, monitoring systems, and incentive systems.

Question 48

Authority

Answer 48

the power to hold people accountable for their actions and to make decisions concerning the use of organizational resources.

Question 49

Span of control

Answer 49

the number of subordinates who report directly to a manager.

Question 50

Hierarchy of authority

Answer 50

An organization’s chain of command, specifying the relative authority of each manager.