Strategic Leadership: Managing The Strategy-making Process For Competitive Advantage Flashcards
Define strategic leadership
The process of creating competitive advantage through the effective management of the strategy-making process
Define strategic formulation
The selection of strategies based on an analysis of an organisation’s internal and external environment
Strategic implementation
Putting strategies into action
What determines shareholder value
The effectiveness of the strategies will lead to profitability and profit growth that in turn determine shareholder value
Define competitive advantage
A company’s position when their profitability is greater than other firms in it’s industry
What is sustained competitive advantage?
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
Business model
The conception of how all strategies will fit together and work in sync in order to create a competitive advantage
Describe a general manager
One who bears responsibility for a company’s overall performance or just the performance of a self contained subunit/s or division
Describe a functional manager
Has the responsibility for supervising particular functions, activities, tasks and operations.
Describe a multidivisional company
A company that competes in several different businesses and has a separate self contained division to manage it
List the Levels of strategic management
Corporate level: head office
Business level: divisions
Functional level: business functions
Steps in a formal strategic planning process
- 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
List and describe the components of a mission statement
- 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
What is the purpose of an internal and external analysis
- 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
Describe the benefits of a SWOT analysis in the different business levels
- 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
Describe the strategy implementation process
- 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
Describe the feedback loop
- provide information to the corporate level on the:
- strategic goals that are being achieved
- degree of competitive advantage being created and sustained
Describe the scenario planning process
- Identify different possible futures
- Formulate plans to deal with those futures
- Invest in one plan
- Ensure to cover angles by preparing for other scenarios
- Switch strategy if analysis shows alternative scenarios becoming more likely/viable
Discuss scenario planning
- 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
Discuss cognitive biases in strategic decision making
- 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
List and discuss techniques for improving decision making
- 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
List the characteristics of a good strategic leader
- 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
Define strategy
A set of related actions that managers take to increase the performance and efficiency of the company
