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Business Policy > Policy Midterm Review > Flashcards

Policy Midterm Review Flashcards

1
Q

An Integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage.

A

Strategy

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2
Q

When a firm implements a value creating strategy that is difficult to duplicate or too costly to try to imitate.

A

Competitive Advantage

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3
Q

An Investors uncertainty about the economic gains or losses resulting from a particular investment.

A

Risk

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4
Q

Returns in excess of what an investor expects to earn from other investments with a similar amount of risk.

A

Above Average Returns

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5
Q

MintzBerg’s 5 definition of strategy

A

Plan, Play, Pattern, Perspective, Position

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6
Q

Plan

A

An intended and deliberate course of action with dealing with a situation

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7
Q

Ploy

A

A maneouvre intended to outwit an opponent or competitor

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8
Q

Pattern

A

A fairly consistent set of actions as opposed to a course of action

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9
Q

Perspective

A

How the organization perceives the world, ( the right way, wrong way and their way )

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10
Q

Position

A

Positioning the firm in the environment where it can gain a competitive advantage and obtain above average returns

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11
Q

Plans or conscious corses of actions required to deal with a specific situation. These lead to _________ (2)

A

Intended Strategy ( deliberate strategies )

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12
Q

Patterns of actions that come about over time in an unintended manner.

A

Emergent Strategies

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13
Q

Emergent Strategies are: ( attributes )

A

Bottom Up, Result from everyday actions without conscious planning.

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14
Q

The increasing economic interdependence among countries and their organizations as reflected in the flow of goods and services, financial capital and knowledge across borders.

A

Globalization

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15
Q

Specifies that the industry a firm chooses to compete in has a stronger influence on the firm’s performance than choices managers make inside the firm.

A

I/O Model

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16
Q

I/O Model Underlying Assumptions (4)

A

1) External environment constrains determine strategies
2) Firms in industry control similar resources and pursue similar strategies
3) Resources are mobile across firms and differentiation in them are short-lived
4) Decision Makers are rational and committed to maximizing the firm’s profits.

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17
Q

Assumes each organization’s unique collection of resources and capabilities are the primary basis for a firm’s strategy and returns.

A

Resource Based Model

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18
Q

Resources

A

Inputs into a firms production process such as capital equipment, skills of employees, patents, finances, and talented managers.

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19
Q

Inputs into a firms production process such as capital equipment, skills of employees, patents, finances, and talented managers.

A

Resources

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20
Q

The capacity for a set of resources to perform a task or activity in an integrative manner.

A

Capabilities

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21
Q

Resources and capabilities that serve as a source of competitive advantage for a firm over its rivals.

A

Core Competencies

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22
Q

A picture of what the firm wants to be and in broad terms, what it wants to ultimately achieve.

A

Vision

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23
Q

Vision

A

A picture of what the firm wants to be and in broad terms what it wants to achieve.

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24
Q

Mission

A

Specifies the business or businesses in which a firm intends to compete and the customers to serve.

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25
Q

Specifies the business or businesses the firm intends to compete and the customers it wants to serve

A

Mission

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26
Q

Stakeholders

A

Individuals or groups who can affect or affected by the firm’s strategic outcomes and have enforceable claims on the firm’s performance

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27
Q

Groups or individuals who can affect or be affected by the strategic outcomes of a firm and have enforceable claims on the firm’s performance.

A

Stakeholders

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28
Q

Stakeholder Groups ?

A

Product Market, Organizational Market, Capital Market

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29
Q

Capital Market Stakeholders?

A

Shareholders, Capital suppliers

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30
Q

Organizational Stakeholders

A

Employees, Managers, Non Managers

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31
Q

Product Stakeholders?

A

Customers, Unions, Suppliers

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32
Q

Returns in excess of what an investor expects to earn with another investment with a similar amount of risk.

A

Above Average Returns

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33
Q

Returns below what an investor expects to earn with another investment with a similar amount of risk

A

Below Average Returns

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34
Q

Returns equal to what an investor expects to earn with another investment with a similar risk.

A

Average Returns

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35
Q

Measures of firm performance (6)

A

Firm Survival, Accounting Measures, Market Measures, Multiple Stakeholder Approach, Present Value, MVA and EVA, Balanced Scorecard, CSR, Sustainability and triple bottom line

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36
Q

Triple Bottom Line

A

People, Planet, Profit

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37
Q

Firm Survival Adv/Dis

A

Adv: Easy to use, dont require detailed information about firms economic condition
Disadv: Difficult to know if firm no longer exists, Firm can die over an extended period of time, doesnt provide information related to above average returns.

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38
Q

Accounting Measures Adv/Disad

A

Adv: Easily available for publicly traded firms, accounting numbers important for managers to make strategic decisions, provide insight to economic rates of return
Disadv: Short Term Bias, Manager’s manipulation, Undervalue intangible assets.

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39
Q

Multiple Stakeholder Approach Adv/Disad

A

Adv: Relative to preferences of stakeholders who are important to the firm
Disadv: Different stakeholders have different interests, Different criteria to judge performance, difficult to satisfy all stakeholders

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40
Q

Present Value Approach Adv/Disad

A

Adv: Close link between PV and performance, Can maximize value creation
Disadv: Inaccurate with predicting cash flows years into the future, measuring discount rate is problematic, adequacy of economic model questioned

41
Q

Market Based Measure Adv/Disadv

A

Adv: More accurate reflection of firm’s economic performance, Publicly available information
Disadv: Not designed to measure performance, using systematic risk may not be appropriate for performance measurement, Market indexes questioned

42
Q

MVA

A

Difference between cash an investor expects to receive and the amount of cash debt/equity holders invested in the firm since inception.

43
Q

Difference between cash of what an investor expects to receive and the amount that debt/equity holders invested initially.

A

MVA

44
Q

EVA

A

Internal measure of a firm’s ability to generate MVA in the future.

45
Q

EVA/MVA Adv/Disad

A

Adv: captures the ability of a firm to manage resources, how senior managers manage capital
Disadv: doesn’t assess economic value/profit, doesn’t measure cash flow, doesn’t measure future cash flow but past accounting income, too complex, lack of consistent EVA definitions

46
Q

A firm voluntary taking further steps to improve quality of life of employees and families, communities and society.

A

CSR

47
Q

CSR in HR results in :

A

Higher retention and better recruitment results

48
Q

CSR results in ( Other than HR ):

A

Protection from environmental accidents and scandals

Avoid conflict with regulators and tax law.

49
Q

Triple Bottom Line Adv/Dis

A

Adv: Allows company to benchmark with other organizations
Disadv: Difficult to assess performance

50
Q

General Environment

A

Compromised of dimensions in the broader society that influence an industry and the firms within it

51
Q

compromised of dimensions in the broader society that influence an industry and the firms within it

A

General Environment

52
Q

Dimensions of General Environmental

A

Political/Legal, Global, Technological, Sociocultural, Demographic, Economic

53
Q

Political Legal Dimension includes:

A

Changing regulations, Antitrust laws, taxation laws, labor training laws

54
Q

Global Dimension includes:

A

Political events, Global Markets, Different culture and institutional attributes

55
Q

Economic Dimension includes:

A

Inflation, Interest Rates, GDP, Budget and trade surplus/deficit

56
Q

Demographic Dimension includes:

A

Age structure, Income, geographical distribution, ethic mix,

57
Q

Technological Dimension includes:

A

New communication technologies, product innovations, application of knowledge.

58
Q

Sociocultural Dimension includes:

A

Women in workplace, Cultural diversity, Attitude on quality of work life

59
Q

Set of factors that directly influences a firm and its competitive actions and competitive responses.

A

Industry Environment

60
Q

I/O Model of above average returns

A

External environment is primary determinant of firm performance

61
Q

The industry of which a firm intends to operate and compete has a strong influence on performance

A

I/O Model

62
Q

I/O Industry properties (5)

A

Economies of scale, barriers to market entry, diversification, product differentiation, degree of firm concentration in industry

63
Q

I/O Model 4 underlying assumptions

A

1) External environment poses constraints that help formulate the strategy
2) Competing firms have similar resources and strategies
3) Competitor’s differentiated resources are short lived, highly mobile across firms.
4) Decision makers are rational and committed to the firm achieving above average returns.

64
Q

An analysis of the firms internal weaknesses and strengths and external opportunities and threats.

A

SWOT

65
Q

Demographic segment is

A

concerned with a population’s size, age structure, geographic distribution, ethnic mix and income.

66
Q

Economic environment is

A

Refers to the nature and direction of the economy in which a firm competes or may compete.

67
Q

Political/Legal segment of env. is

A

arena in which organizations and interest groups compete for attention, resources, and a voice for overseeing the body of laws and regulations guiding the interactions among nations.

68
Q

Sociocultural Segment is

A

concerned with a society’s attitude and cultural values

69
Q

concerned with a society’s attitude and cultural values

A

Sociocultural Segment

70
Q

Technological segment is

A

Includes institutions and activities related to creating new knowledge and translating that knowledge into outputs, products, processes and materials.

71
Q

Global segment of env. is

A

Includes relevant new global markets, existing changing markets, important international political events, and critical and cultural and institutional characteristics of global markets.

72
Q

5 forces of competiton

A

Rivalry among firms, substitute products, bargaining power of supplier, bargaining power of buyer, threat of new entrants

73
Q

Suppliers have high bargaining power when: 4

A

1) Industry dominated by few large companies
2) Substitute products are unavailable
3) Industry firms are not significant customers for supplier group
4) Supplier goods critical to buyer’s success

74
Q

Buyers have high bargaining power when: 4

A

1) They purchase a large portion of an industry’s total output
2) Purchased product sales account for a significant portion of sellers annual revenues
3) can substitute at no or little cost
4) Industry products are undifferentiated or standardized

75
Q

Inputs into a firm’s production process such as capital equipment, employees, pa tenets, finances and managers.

A

Resources

76
Q

Resources include:

A

Capital equipment, Employee skills, Patents, Finances, Managers.

77
Q

Resources

A

Input into a firm’s production process

78
Q

Capability

A

The capacity for a set of resources to perform a task or an activity in an integrative manner.

79
Q

The capacity of a set of resources to perform a task or an activity in an integrated manner

A

Capability

80
Q

Resource Based Model

A

Assumes that each organization’s resources and capabilities are the primary source of above average returns and a firm’s strategy.

81
Q

Assumes that an organizations resources and capabilities are the primary source of above average returns and a firm’s strategy.

A

Resource Based Model

82
Q

Core competencies

A

Resources and capabilities that serve as a source of sustained competitive advantage for a firm over its rivals.

83
Q

Resources and capabilities that serve as a source of sustained competitive advantage for a firm over its rivals

A

Core competencies

84
Q

Tangible resources

A

Assets that can be seen or quantified.

85
Q

Intangible resources

A

Assets that are typically rooted deeply into a firm’s history and have accumulated over time.

86
Q

Assets that can be seen or quantified.

A

Tangible Resources

87
Q

A firm’s formal reporting structure and its formal planning, controlling and coordinating systems

A

Organizational resources

88
Q

Sophistication of location of a firm’s plant and equipment

A

Physical resources

89
Q

Knowledge, Trust, managerial capabilities, organizational routines and ideas.

A

Human resources

90
Q

4 criteria of sustainable competitive advantage

A

Valuable capabilities, Rare capabilities, Costly to imitate capabilities, Organized to be exploited

91
Q

Allow the firm to exploit opportunities to generate revenues and/or neutralize threats to reduce costs

A

valuable capabilities

92
Q

Capabilities possessed by few if any current of potential competitirs

A

rare capabilities

93
Q

Capabilities that other firms cannot easily develop

A

costly to imitate capabilities

94
Q

When firms have the correct structure, control systems and reward systems to support each source of competitive parity, temporary competitive advantage and sustained competitive advantage.

A

Organized to be exploited

95
Q

Primary activities in value chain analysis means

A

Involved with a products physical creation, its sale and distribution to the buyers and its service after the sale

96
Q

Support activities in a value chain means

A

Provide the assistance necessary for the primary activities to take place

97
Q

Primary activities components ( Basic value chain )

A

Service , operations, Outbound logistics, inbound logistics, marketing and sales

98
Q

Support activities components ( basic value chain components)

A

Firm infrastructure, HRM, technological development, procurement.

99
Q

Outsourcing

A

Purchasing of value creating activity from an external supplier

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