Module 1.1B: Leadership & Strategy Flashcards
What is an Organization’s Philosophy?
Set of beliefs or attitudes that act as guiding principles for an organization.
Who are the 4 well-known business theorists?
1) Michael Porter
2) Henry Mintzberg
3) Edgar Schein
4) Geert Hofstede
What was Henry Mintzberg known for?
Thought leader who proposed that there are 5 distinct types of management strategy: plan, pattern, position, perspective, and ploy.
Business strategy needs to allow for change & fluidity to succeed.
What was Edgar Schein known for?
Organizational Development expert who created an organizational culture model that identifies 3 distinct layers to the culture within an organization: behaviors & artifacts, stated or espoused values, and basic underlying assumptions.
The values in an organization that exert the greatest influence over its culture may be subconscious.
What was Geert Hofstede known for?
Social psychologist whose model of dimensions of national culture can be used to illuminate organizational culture: dimensions are distribution of power, tolerance for uncertainty, individual versus collective, long-term orientation, and restraint versus indulgence.
Organizational culture is best understood by evaluation of its practices, values, and preferences.
What was Michael Porter known for?
Porter’s 5 Forces - framework for understanding level of competition within a given industry.
The greater the intensity of a force, the more competitive the industry.
An effective business strategy must address 5 forces that influence industry competition.
What are Porter’s Five Forces?
- Potential for New Competitors
- Supplier Power
- Customer Power
- Substitute Product Threat
- Industry Rivalry/Competition
What is the Potential for New Competitors?
Aka Threat of New Entrants.
This force refers to the potential for new businesses to join the industry.
The intensity of this threat is determined by how easy or hard it is to enter the industry.
Relevant factors include the amount of up-front capital necessary, the need to create a unique product, the cost of switching industries, as well as the distribution channel and supply access.
What is Supplier Power?
Refers to the bargaining power of industry suppliers or vendors.
Determined by whether an organization has the option to obtain supplies from multiple vendors.
In industries with few suppliers, those suppliers have greater bargaining power because organizations have limited options.
What is Customer Power?
Refers to the bargaining power of industry customers.
The intensity of this force is determined by how easy or difficult it is for a customer to purchase a similar product across the industry.
Customers wield significant bargaining power and competition increases.
What is Substitute Product Threat?
Refers to the availability of alternate products that are capable of fulfilling the same customer need.
Substitute product may be from a different industry entirely. Ex) Online news substitute for physical newspaper.
When the intensity of this threat is high, the existing product may become obsolete.
What is Industry Rivalry/Competition?
Refers to the intensity of competition or rivalry among organizations within the same industry.
Common tactics for attracting customers involve promotions, introduction of new products & services, and lowering prices.
When the intensity of this force is high, organizations that focus entirely on “beating” their competition may decrease profits by excessively lowering prices.
What are the 5 distinct types of management strategy?
- Plan - Closest to the strategic planning process, this strategy involves outlining and following specific steps to accomplish a set of predetermined goals.
- Pattern - This strategy occurs when past actions and behaviors are viewed retrospectively and a pattern emerges that varies from the stated intent.
- Position - Involves locating an organization as it is situated in relation to customers, stakeholders, and competitors.
Relies on external factors as the determining factors in strategy.
- Perspective - This strategy relies on an underlying theory or ideology about the organization that guides strategic decision making.
- Ploy - Designed specifically to best the organization’s competition.
What did Henry Mintzberg state about managers?
Importance of recognizing that managers are not inherently leaders and leaders are not inherently managers.
Effective managers must be able to lead and effective leaders must be able to manage.
What are the 3 distinct layers to the culture within an organization? (Pyramid)
- Behaviors & Artifacts
- Stated Values
- Basic Underlying Assumptions
These layers correlate to the behaviors and actions of an organization, the values an organization espouses, and the values that are assumed but not formalized.
What are behaviors and artifacts?
Cultural artifacts comprise the observable characteristics of an organization’s culture.
“What they do”
Ex) Office décor, furniture, codes of conduct, and dress codes. Dress codes are determined with heavy input from HR.
Behaviors and artifacts are not only visible to employees, but are also externally visible.
Most readily recognized.
What are stated values?
Formally codified values — what an organization says it believes and how it makes those beliefs public.
“What they say”
They are usually expressed in a mission statement, vision statement, and organizational goals. These values are intended to guide the decisions and behaviors of the organization as well as the employees within it.
What are basic underlying assumptions?
Every organization has underlying assumptions about how the world is and how it ought to be that largely manifest as unconscious behavior.
“What they believe”
Assumptions form the organization’s culture and drive management behaviors including interpersonal relationships, what results in disciplinary action, and what garners rewards.
What are the 5 dimensions of national culture?
- Distribution of Power
- Tolerance for Uncertainty
- Individual vs. Collective
- Long-Term Orientation
- Restraint vs Indulgence
Geert Hofstede acknowledged that his dimensions of national culture can provide insights to organizational culture. Culture change is a slow process influenced by external and internal forces.
What is Distribution of Power?
Aka power distance. Refers to the level of equality within a culture.
Organizations with a large power distance likely follow a hierarchal structure and have significant disparities of responsibility and pay between entry level employees and executive leadership.
What is Tolerance for Uncertainty?
Aka uncertainty avoidance. This dimension refers to how well a culture adapts to ambiguity and uncertainty.
An organization that is highly structured with rigid rules and established standard operating procedures has a low tolerance for uncertainty.
An organization that prioritizes creativity and innovation over structure and rule-following has a high tolerance for uncertainty.
What is Individual vs. Collective?
This dimension refers to whether a culture values the group over the individual or the individual over the group.
An organization that encourages employee autonomy and independence values individualism.
An organization that is more collaborative in nature and encourages loyalty values collectivism.
What is Long-Term Orientation?
An individual with short-term orientation values freedom and autonomy. They are adaptable and work well in fast-paced environments.
Long-term-oriented individuals will make concessions and sacrifices in service of a long-term goal. They often have significant self-discipline and work well in organizations with multi-year plans.
