Section Fourteen Flashcards
Define strategy
a plan for achieving its corporate objectives for example if a business’s, main objective is to grow, it needs a strategy for how it’s going to go about growing.one way, ist through the strategic planning process
process in the strategic planning process?
senior manager set the long-term corporate objectives of the business based on its mission
they analysis the internal position of the business to identify strengths and weaknesses
internal influences on planning a strategy?
when planning a strategy a business looks at internal factors to determine its strengths and weaknesses.
these can include many different things such as the skills and motivation of the staff, the quality of the products, the business’s finances, the production capacity and the core competencies
For example, if a business has the capacity for increased production this would be a strength enabling it to grow
External influences on planning a strategy?
will look at any opposites and threats
these can include political-legal economic social technological and environmental factors and competition
what are Contingency plans?
strategic planning can include contingency planning- outlining what to do if something unexpected happens
what can contingency plans do?
Contingency plans can help a business respond to a lot of different types of crisis.For example a hostile takeover bid.a fire that destroys a factory, bad news or PR in the media, a sudden change in demand for products or lost or corrupt data caused by computer network problems
Can business plan for every unforeseen event?
Businesses can’t plan for every unforeseen event. some adverse events are hard to plan for.Contingecy planning is very expensive so it’s not worthwhile to plan for every single thing that could possibly go wrong.
the manager has to decide how likely a particular adverse event is to happen, and how badly it would damage the business if it did
what is crisis management?
Crisis management is when an unexpected situation occurs and a business has to respond
what if the mangers haven’t carried out contingency planning?
if the managers haven’t carried out contingency planning they are not prepared so they have to make snap decisions about what to do.if they have done contingency planning then they have already decided what to do in that situation, which makes crisis management much more straightforward
why do managers have to act quickly?
managers need to act quickly and decisively to limit the amount of damage caused. this is best achieved through strong leadership e.g. an autocratic leadership
Emergent strategies
emergent strategies develop over time as a business’s actions lead to patterns of behaviour.emergenct strategy can be adapted as the business learns what works in the current environment.Following an emergent strategy can solve many of the problems that occur with a planned strategy
Advantages of emergent strategies?
Emergent strategies save a lot of time and money that would otherwise have been spent on strategic planning
Emergent strategies stay relevant because they can adapt to the changing enviroment
A planned strategy relies on senior manager making a lot of the decisions emergent strategies is based more on the decisions of junior and middle managers- they will often have access to more up to date information about the business and its environment
disadvantages of emergent strategies?
with an emergent strategy, it might not be clear what the end goal is - a planned strategy is clearly working towards stated objectives
If the strategy is constantly changing in the lower ranks of a company those at the top might have little idea about whats going on in their business. this could lead to senior managers believing that the company is following aparticular direction, but in reality, its going in a completely different direction
the disadvantage of a planned strategy
planing a strategy can cost a lot of time and money.it’s easy to get caught up trying to plan the perfect strategy which is practically impossible.
A planned strategy will practically become out of date.for instance, if a strategy is planned for over 5 years then 3 years into the implementation the environment could have changed a lot from the time of the planning its difficult o adapt a planned strategy to a changing environment
Senior managers who plan the stragy could be out of touch with whats really going on in the business
Advantages of strategic planning?
strategic planning can be helpful because a strategic plan gives the business a clear direction it can communicate exactly what the business is trying to achieve, so everyone works towards the same goals
Strategic planning akes managers think about the strengths and weaknesses if the business and its external threats and Opportunites. this helps the manager to spot opportunities that they might not have noticed and to match strategy to the current situation
