Strategic Leadership: Managing The Strategy-making Process For Competitive Advantage

Question 1

Define strategic leadership

Answer 1

The process of creating competitive advantage through the effective management of the strategy-making process

Question 2

Define strategic formulation

Answer 2

The selection of strategies based on an analysis of an organisation’s internal and external environment

Question 3

Strategic implementation

Answer 3

Putting strategies into action

Question 4

What determines shareholder value

Answer 4

The effectiveness of the strategies will lead to profitability and profit growth that in turn determine shareholder value

Question 5

Define competitive advantage

Answer 5

A company’s position when their profitability is greater than other firms in it’s industry

Question 6

What is sustained competitive advantage?

Answer 6

When a company is able to maintain its profits over other companies for a long period of time because of effective strategic planning and implementing

Question 7

Business model

Answer 7

The conception of how all strategies will fit together and work in sync in order to create a competitive advantage

Question 8

Describe a general manager

Answer 8

One who bears responsibility for a company’s overall performance or just the performance of a self contained subunit/s or division

Question 9

Describe a functional manager

Answer 9

Has the responsibility for supervising particular functions, activities, tasks and operations.

Question 10

Describe a multidivisional company

Answer 10

A company that competes in several different businesses and has a separate self contained division to manage it

Question 11

List the Levels of strategic management

Answer 11

Corporate level: head office
Business level: divisions
Functional level: business functions

Question 12

Steps in a formal strategic planning process

Answer 12

• Select the organisation’s mission and goals
• Conduct analysis of org’s external competitive environment and internal operating environment
• select strategies that:
• solidify organisation’s strength and work on its weakness
• are in line with org mission and goals
• are congruent and constitute a viable business model
• final step is to implement the strategies

Question 13

List and describe the components of a mission statement

Answer 13

• mission: the purpose and strives a company wishes to do
• vision: articulation of the company’s future prospects and achievements
• values: statements that address how employees should conduct themselves and business in order to reach mission
• goals: precise and measurable desired future state that a company attempts to realise

Question 14

What is the purpose of an internal and external analysis

Answer 14

• external analysis:identifies strategic opportunities and threats that will affect how an organisation pursues its mission. Involves the examination of:
• macroenvironmnent
• country or national environment
• industry environment in which company operates
• internal analysis: focuses on reviewing resources, competencies and capabilities within the organisation
• its aim is to identify the company’s strengths and weaknesses

Question 15

Describe the benefits of a SWOT analysis in the different business levels

Answer 15

• functional level strategies: directed at increasing the effectiveness of operations within a company
• business-level strategies: encompasses businesses overall competitive theme
• global strategies: looks at ways of expanding operations beyond home country
• corporate-level strategies: determines the businesses a company should venture into to increase profits and growth as well as ho to gain a competitive advantage

Question 16

Describe the strategy implementation process

Answer 16

• involves taking action at a functional, business and corporate level to execute strategic pan
• designing the most suitable org structure, culture, and control systems to put a chosen strategy into action

Question 17

Describe the feedback loop

Answer 17

• provide information to the corporate level on the:
• strategic goals that are being achieved
• degree of competitive advantage being created and sustained

Question 18

Describe the scenario planning process

Answer 18

1. Identify different possible futures
2. Formulate plans to deal with those futures
3. Invest in one plan
4. Ensure to cover angles by preparing for other scenarios
5. Switch strategy if analysis shows alternative scenarios becoming more likely/viable

Question 19

Discuss scenario planning

Answer 19

• formulating plans that are based on ‘what if’ scenarios about the future
• encourages managers to
• think outside the box
• be more flexible
• anticipate probable scenarios
• ivory tower planning: recognises that successful strategic planning encompasses managers at all levels of the corp

Question 20

Discuss cognitive biases in strategic decision making

Answer 20

• cognitive biases: is the systematic errors in human decision making and arises from the way people process information
• prior hypothesis bias: decisions are made based on prior beliefs, even when evidence proves that those beliefs are wrong
• escalating commitment: decision makers, having committed significant resources to a project, commit even more, despite receiving feedback that the project is failing
• reasoning analogy: use of simple analogies to make sense out of a complex problem

Question 21

List and discuss techniques for improving decision making

Answer 21

• devil’s advocacy: a member of the team that identifies all the issues that make a proposal unacceptable. Possible problems that of recommended courses of action are put on the table
• dialectic inquiry: generation of a plan and a counter-plan that reflects plausible but conflicting courses of action. This promotes strategic thinking
• outside view: identifying and analysing past successful and failed implementations to see how effective the current strategy will be for the project

Question 22

List the characteristics of a good strategic leader

Answer 22

• vision, eloquence, and consistency
• articulation of a business model
• commitment
• being well informed
• willingness to delegate and empower
• astute use of power
• emotional intelligence
• self-awareness, self-regulation, and motivation
• empathy and social skills

Question 23

Define strategy

Answer 23

A set of related actions that managers take to increase the performance and efficiency of the company