SBL Flashcards
CH1 Strategy Leadership and Culture
Define strategy
long term direction of organization
CH1 Strategy Leadership and Culture
Define 3 levels of strategy
Corporate level
- ex. sensitivity analysis, scenario based; vision
Business
- Strategy related to running the business
Operational
- Strategy related to operations
CH1 Strategy Leadership and Culture
What are the three interrelated elements of Strategic Management according to
Johnson, Scholes and Whittington?
Strategic position
- external environment (PESTEL and SWOT)
Strategic choices
- deals with objetives (competitive advantage etc.)
Strategic in action
- all things surrounding the implementation and monitoring of strategy
CH1 Strategy Leadership and Culture
Define Culture
“The way we do things around here….”
i.e.
Pattern of shared basic assumptions …. considered valid and transmitted to new members.
CH1 Strategy Leadership and Culture
List the six elements, comprising using the cultural web, surrounding the Paradigm (org. assumptions).
(Use these as headings for ‘Culture’ questions)
- PARADIGM (Org’s culture - in the center)
- Control systems
- Org structure
- Power structures
- Stories and myths
- Symbols
- Routines and Rituals
Ch2 Stakeholders and Social Responsibility
List three elements of Strategic Values
Ethics in business
CSR
Corporate Governance
Ch2 Stakeholders and Social Responsibility
What are the two types of stakeholders?
Direct
- have their own voice
Indirect
- Inarticulate, voiceless (examples: animal kingdom, plants, suppliers in other countries)
Ch2 Stakeholders and Social Responsibility
What is the best solution to solving the Agency Problem?
Align interest between principal and agent.
Ch2 Stakeholders and Social Responsibility
What are the three ways to categorize stakeholder groups?
Internal - employees, mgmt
Connected - shareholders etc.
External - Gov’t
Ch2 Stakeholders and Social Responsibility
CSR (Carrol) is modelled on hierarchy of needs. What are the four elements?
- Philanthropic - charitable donations etc.
- Ethical - the “right thing” beyond the law
- Legal -
- Economic - shareholders, improving EPS
Ch2 Stakeholders and Social Responsibility
Outline a Corporate Citizenship approach (Matten and Crane) to social responsibility.
There are three views:
Limited view
- main stakeholders are local communities etc.
Equivalent view
- similar to CSR view with 4 elements, partly voluntary and partly imposed
Extended view
- social rights, civil rights, political rights
Ch2 Stakeholders and Social Responsibility
Name elements of the Ethical Stances approach (Johnson and Scholes) to social responsibility.
- ST shareholder interest
- LT shareholder interest
- Multiple shareholder obligations
- shaper of society
- Laissez faire
- enlightened self interest
- Forum for stakeholder interraction
Ch2 Stakeholders and Social Responsibility
Gray, Owen and Adams categorize social responsibility into 7 CSR viewpoints. What are they?
- Pristine capitalist
- Expedient
- Proponents of the Social Contract
- Social ecologist
- Socialists
- Radical feminists
- Deep ecologists (Greens, Patagonia)
Ch2 Stakeholders and Social Responsibility
What is the main difference between conventional reporting and Integrated reporting_
IR focuses on the process, not on the product.
Ch2 Stakeholders and Social Responsibility
What are Integrated Reporting’s 7 guiding principles?
Connectivity of information Conciseness Comparability Strategic forward looking Stakeholder relationships Reliability Materiality
Ch3 Impact of Corporate Governance and Strategy
Define Corporate Governance.
System by which an organizations is controlled.
It is the set of relationships between organization’s directors, shareholders and other stakeholders. Provides structure through which an organization’s objectives are set, means of attaining them, and monitoring activities.
Ch3 Impact of Corporate Governance and Strategy
What are the 11 core principles that underlie most good corporate governance systems?
(HINT: Decide to Disclose your Reputation)
Qualities that ensure sound Decision making:
- Integrity
- Fairness
- Independence
- Scepticism
- Judgment
Qualities that ensure honest and transparent Disclosures:
- Transparency
- Probity
- Responsibility
- Accountability
- Innovation
= REPUTATION
Ch3 Impact of Corporate Governance and Strategy
OECD issued 5, nonbinding, principles of corporate governance. What are the categories?
- Rights of shareholders
- Equitable treatment of shareholders
- Role of stakeholders
- Disclosure and transparency
- Responsibilities of the board
Ch3 Impact of Corporate Governance and Strategy
Name two UK jurisdictions in terms of corporate governance.
Cadbury report 1992
Greenbury report 1995
Hampel report 1998
Combined code (first 3) 1998
Turnbull report 1998
Smith report 2003
Higgs report 2003
Combined Report 2006 and 2008
When drafting answers, just refer to combined report and then outline all audit functions (role of audit committee, risk management, principles based approach etc. )
Ch3 Impact of Corporate Governance and Strategy
what was the most prominent result of SOX?
Creation of the PCAOB.
Rules based approach.
Additional provisions of SOX include:
- Auditors should review internal controls
Ch3 Impact of Corporate Governance and Strategy
What are criticisms of SOX?
Not strong enough, over rigid on many topics
Directors may avoid consulting lawyers (whistleblowing duty)
Companies are turning away from the US stock market and turning to others.
Ch3 Impact of Corporate Governance and Strategy
What are the main differences, in terms of responsibility, between the chairman of the board and the CEO?
Chairman provides leadership to the BoD
CEO provides leadership to the business
Ch3 Impact of Corporate Governance and Strategy
list the main committee types
Risk committee
Audit committee
Remuneration committee
Nominations committee
Ch3 Impact of Corporate Governance and Strategy
What are the factors that should be considered when agreeing remuneration packages for directors?
(HINT: 4 elements, 3 Key factors to consider
Elements:
- Fixed and variable terms
- cash and non cash elements
- immediate and deferred elements
- short and long term elements
Key factors to consider:
- Connected to performance
- Best practice
- Market factors
Ch4 The External Environment
What are environments are PESTEL and Porters5 applied to?
PESTEL - macro
Porters5 - micro
Ch4 The External Environment
What is a popular method of determining a country’s attractiveness in terms of investment?
Porters Diamond
4 interconnected factors:
- Firm strategy and structure
- Related and supporting industries
- Factor conditions
- skilled labor, infrastructure
- Home demand conditions
Ch4 The External Environment
Outline Porters5 and list triggers that would alter or eliminate force magnitudes.
- Threat of new entrants
- barrier to entry
- Threat of Substitutes
- Supplier power
- bargaining power
- Buyer power
all impact: - Rivalry and competition
change triggers:
- new entrants
- market interest rate delta
- technological developments
- mergers in supply chain
Think about who participates in the model and how they would be most affected.
Ch4 The External Environment
What are the 5 stages of the industry life cycle
- Development
- Growth
- Shakeout
- Maturity
- Decline
Ch4 The External Environment
What are the three main uses of Porters5?
- To analyse particular industry or segment profitability
- To identifying actions on an organization that will:
- promote its strengths
- mitigate its weaknesses
- To determine if forces affect all competitors equally
Ch4 The External Environment
What is one way that firms can mitigate risks imposed by key market influences?
Scanario planning develops a plausible view of how an industry could develop, short and long term, considering all market factors, risks and opportunities.
Note these are not forecasts; only plausible views to ensure all factors, and inherent outcomes are being considered.
Ch5 Strategic Capability
Define Strategic Capability
Term used to describe an organizations strengths and weaknesses
Ch5 Strategic Capability
Unique resources and core competences must have 4 qualities in order to sustain competitive advantage. what are they?
- Value
- Rarity
- Inimitability
- Organisational support
Ch5 Strategic Capability
what is tacit knowledge in terms of competitive advantage?
Tacit knowledge is knowledge locked in the minds of individuals. Firms engage in knowledge management to unlock this knowledge in an effort to sustain its competitive advantage.
Ch5 Strategic Capability
Name and illustrate the popular framework for assessing an organization’s strategic capability.
SUPPORT ACTIVITIES:
- Firm infrastructure
- Human resources mgmt
- Tech development
- Procurement
PRIMARY ACTIVITIES:
- Logistics
- Operations
- Sales and marketing
- Service
Successfully implementing the set of LINKED activities outlined above give rise to Margins.
Ch5 Strategic Capability
Why is the Porter’s Value Chain such an important tool for analysing an organisation’s strategic capability?
Because it focuses on the means available for creating value, rather than on infrastructure.
Ch5 Strategic Capability
Outline the primary goals of SWOT.
- Develop STARTING POINT
To develop a starting point from which future strategic options can be assessed (once SWOT performed). - CONVERT
To convert WEAKNESSES into STRENGTHS- (internal factors relating to strategic capabilities)
- CONVERT
To convert THREATS into OPPORTUNITIES- (relate to external factors)
Ch6 Competitive Advantage and Strategic Choice
Outline Porter’s generic strategy with regards to strategic choice (market position).
- Determine Competitive Basis
- Cost leader
- Differentiator
(Using creative language, outline how to achieve these)
- Determine Competitive Focus
- Cost Leader ship
- Differentiation
- Cost focus
- Differentiated focus
Ch6 Competitive Advantage and Strategic Choice
What is the primary strategic option available to an organization trying to create a long term competitive advantage?
Develop a sound MARKETING MIX (7 P’s)
Product
Place
Price
Promotion
People
Processes - services, kind, fast, efficient
Physical evidence - ex. evidence of ownership
Last three P’s also known as the
SERVICE MARKETING MIX
Ch6 Competitive Advantage and Strategic Choice
Illustrate the elements of the BCG matrix (Henderson, 1970).
Question Marks
- Growth: High
- Market share: Low
(potential to become stars – invest!)
Stars
- Growth: High
- Market share: High
(potential to become cash cows – invest in develop.!)
Cash Cows
- Growth: Low
- Market share: High
Dogs
- Growth: Low
- Market share: Low
Ch6 Competitive Advantage and Strategic Choice
What are the primary goals of the BCG model (HENDERSON, 1970)?
Used by organisations to manage activities and make decisions concerning the future direction of the entity.
Asses SBU (strategic bus unit) on financial performance only.