test 5

Question 1

purpose and intent of the strategic planning process

Answer 1

• what: a strategic plan highlights a business’ direction and priorities
• purpose - why: the purpose of a strategic plan is to set overall long-term goals and objectives for a business
• intention - why: the intention of a strategic plan is to develop a plan to achieve the long-term goals and objectives in order to achieve business success
• how:
  
  • it can assist management to make decisions about the allocation of resources and assets
  • it involves various stakeholders of a business and the purpose of the process is to build commitment upon goals and objectives
  • strategic planning involves scanning the macro environment and using tools to analyse the market and possible business opportunities that could potentially lead to long-term success.

Question 2

key features of strategic plans:

mission and objectives

Answer 2

• mission -
  
  • what: having a mission means to have a clear purpose - a simple declaration underlying the purpose of an organisations existence and its core values. (vision statements are focussed on the very long term)
  • how: outlines the purpose of the business, what it wants to achieve long-term, how is it different to its competitors - and managers must need to ensure that decisions are consistent with the organisations mission statement. clearly defined and realistically achievable to work towards it.
  • why: unify all people and corporate cultures within the workforce in their attempt to achieve the organisations vision.
  objectives -
  - what: Without having clear long-term objectives, organisations have no sense of direction and purpose. long term goals include
  - profit maximisation: Difference between firm’s total revenue and total costs. Without profit, owners and investors will find it difficult to justify the existence of the business
  - growth: Growth is usually measured by an increase in sales or by market share. Growth is essential for business survival
  - image and reputation: Businesses may strive to enhance their image and reputation. A bad image (could be portrayed by the media) can turn customers against a firm’s products and services.
  - how: objectives provide the basis for measuring and controlling the performance of the workforce, management and the business.
  - why: should serve to unify all people and corporate cultures within the workforce in their attempt to achieve the organisations vision.

Question 3

key features of strategic plans:

environmental scan: PEST

Answer 3

• what: a strategic planning tool that evaluates the political, economic, social and technological factors that could impact a business.
  It has 4 factors:
  
  • Political (P): tax laws, industrial relations laws, environmental regulations, consumer protection, trade regulations, stability and relationships of foreign governments
  • Economic (E): interest rates, inflation, unemployment, growth, discretionary spending, currency fluctuations
  • Social (S): population growth, religious beliefs, lifestyles, community expectations for safety, value for money and ethics
  • Technological (T): rate of change, automation, research and development.
• how: it can asses the major external factors that may impact its operations and overall business in a particular market
• why: the PEST analysis will gauge how the external factors may impact the overall profitability and success of a business. Hence, it is an important tool in the strategic planning process.

Question 4

key features of strategic plans:

environmental scan: porter’s five forces

Answer 4

• what: five forces analysis, looks at assessing the nature of competition within an industry (same market)
• how: The theory gives managers some insight into the degree of competition within the industry they operate in, so as to identify the important issues that need addressing. (ANALYSIS OF THE 5)
  why: the factors affecting profitability in a specific industry help to inform decision on whether to enter a specific industry, whether to increase capacity in a specific industry, and developing competitive strategies

Question 5

porter’s five forces

Threat of substitution:

Answer 5

• Where close substitute products exist in a market, it increases the likelihood of customers switching to alternatives in response to price increases.
• This reduces both the power of suppliers and the attractiveness of the market.

Question 6

porter’s five forces

Threat of new entrants to an industry:

Answer 6

• Profitable markets attract new entrants, which erodes profitability.
• Unless business has strong and durable barriers to entry, then profitability will decline to a competitive rate
• For example, patents, economies of scale, capital requirements or government policies

Question 7

porter’s five forces

Bargaining powers of buyers:

Answer 7

• How easy it is for buyers to drive prices down.
• This is driven by the: number of buyers in the market; importance of each individual buyer to the organisation; and cost to the buyer of switching from one supplier to another.
• If a business has just a few powerful buyers, they are often able to dictate terms.

Question 8

porter’s five forces

Baragaining power of suppliers:

Answer 8

• How easy it is for suppliers to drive up prices.
• This is driven by the: number of suppliers of each essential input; uniqueness of their product or service; relative size and strength of the supplier; and cost of switching from one supplier to another.

Question 9

porter’s five forces

Competive rivalry:

Answer 9

• The importance of this force is the number of competitors and their ability to threaten a company.
• The larger the number of competitors, along with the number of equivalent products and services they offer, the lesser the power of a company.

Question 10

key features of strategic plans:

environmental scan: SWOT

Answer 10

• what: a successful organisation build on its strengths, overcomes weakness, identities new opportunities and protects against threats
• how: provides clear framework for decision making by highlighting the internal and external factors that can impact business objectives
  
  • RISK MANAGEMENT: identifying threats early, develop strategies counteract attack those threats
• why: helps in formulating strategies by identifying strengths that they can use/leverage on, weaknesses that can be improved, opportunities that can be pursued, and threats that need to be mitigated

Question 11

strategic formulation

Answer 11

• what: the process of selecting the best suitable course of action to meet the organisational long-term objectives and vision
• how: the steps include: establishing organisational objectives, forming quantitative goals, performance analysis, selection of strategy
  
  • is could be done though environmental scans (SWOT)
• why: strategic formulation aims to improve the business performance and profits - is important as it can help the business gain a competitive advantage. it is important to develop business strategies that can provide direction on achieving goals and objectives.

Question 12

strategic implementation

Answer 12

• what: communication of the strategy and to develop commitment so that long-term objectives are met
• how: monitor and asses the implementation → determine whether the plan is achieving the objectives leading to the strategic goal, if not adjustments to the long-term strategy may need to be made
• why: so that objectives are met

Question 13

evaluation and control

Answer 13

• what: control - is measuring activities, timelines, and resource consumption; analysing deviations and correcting processes/outcomesevaluation - the process of evaluating the performance and feeding back information into decision-making for the next strategic planning cycle
• how:
  
  • establish standards to measure the progress and goals of the stratergy (using KPI’s)
• why: expand business and meet goals, financial stability and long-term stability, time-frame being met, to see if we shoudl we revise the goal, if adequate resources

Question 14

purpose of production management systems

Answer 14

• what: production management deals with converting raw materials into finished goods or products.
• how: focuses specifically on the production of goods and services and is concentrated upon transforming inputs into outputs (by designing, operating and controlling production systems) processes and controls that need to take place in order to ensure a product or service is created in line with the specifications, within the quantity and by the schedule demanded and at a minimum cost to the business.
• why: the purpose is to produce goods and services that are: the right quality, the right quantity, and the right time (avoid recession) and at minimum cost (for lower cost of production, maximise profit)

Question 15

features of product development

Answer 15

• what:
  
  • product development outlines the stages from when a product/service is conceived as a raw idea to when it is finally brought to market
    
    • incremental innovation → product improvements, new features of better performance to existing products
    • disruptive innovation → a totally new product that will be sold to a new existing market
• how:
  
  • the elements of the product development is usually outlined in a 6 stages of product development: product ideas, evaluate the ideas, product concept evaluation, prototype testing, market testing, launch the product
  • each on of these events require an investment of skills, financial resoures and time.
• why: establishing competitive advantage or maintaining it, process and technologies are turned into something that can be made by the business and sold to consumers

Question 16

features of quality management

control

Answer 16

• what: aims to identify defects in the finished product - quality control is a reactive process - the activities or techniques used to achieve and maintain the product quality
• how: finding and eliminating courses of quality problems through tools and equipment so that customer’s requirement are continuously met
• why:
  
  • maintaining competitive advantage can be supported by consistently delivering a product of high quality
  • identifies defects after a product is developed and before its released

Question 17

features of quality management

assurance

Answer 17

• what: aims to prevent defects with a focus on the process used to make the product it is a proactive quality process
• how: establish a good quality management system and the assessment if its adequacy and conformance audit of the operation and the review of the system itself
  
  • developing the QA system
  • document guidelines and instructions for critical tasks, processes and systems (all employs must be able to access this (e.g. cloud/intranet)
  • inform and instruct staff
• why:
  
  • maintaining competitive advantage can be supported by consistently delivering a product of high quality
  • improve development and test processes so that defects do not arise when the product is being developed

Question 18

features of quality management

improvement

Answer 18

• what: refers to the unceasing efforts of everybody in a company to adapt a systematic approach to the elimination or reduction of rework, waste and losses in the production of process
• how:
  
  • plan - inspect and review performance, identify problems and solutions
  • do - choose the best option and implement the performance
  • check - monitor the improvement, seek feedback
  • act - update procedures, train staff
• why:
  
  • maintaining competitive advantage can be supported by consistently delivering a product of high quality

Question 19

inventory control techniques

just-in-time

Answer 19

• what: involves the idea that products should be produced just in time for delivery, and raw material should be ordered and delivered just in time to be used for production
• how:
  
  • preventing over-production, saving resources by streamlining your production systems, reducing capital you have tied up in stock
  • under this system, inventory never sits around and a minimum amount of money is tied up in inventory
• why:
  
  • it can improve production efficient and competitiveness
  • there is a less storage space needed which allows a business to save on rent and insurance costs
  • discourages the build-up of any unsold products
  • there is a minimal chance of stock becoming ‘out-of-date’.
• disadvantages:
  
  • may require a major overhaul of your business systems - they may be difficult and expensive to introduce
  • risks associated with supply chain, with no stock to fall on, a minor disruption in supplies to your business from just one supplier could force production to cease at a very short notice
    
    • implication: loose customers to competitors

Question 20

inventory control techniques

just-in-case

Answer 20

• what: an inventory strategy where companies keep large inventories on hand - a company practicing this strategy essentially incurs higher inventory holding costs in return for a reduction in the number of sales lost due to sold-out inventory
• how: companies have enough production material on hand to meet unexpected spikes in demand
• why:
  
  • there is a greater ability to meet any unexpected increases in demand for thebusiness’ product as there is always inventory on hand to meet these demands
  • businesses hold large amounts of inventory just-in-case there are surges indemand or supply
  • reduces down-time in production as there is no delay in inventory from suppliers
  • customer satisfaction is maintained as production does not wait for materials to be delivered
  • businesses could reap the benefits of economies of scale, such as buying supplies in bulk.
• disadvantages:
  
  • higher storage costs

Question 21

leadership traits needed in a cross-cultural setting, including:

starting sentence

Answer 21

leadership in a cross-cultural setting, means to lead teams in culturally diverse settings by integrating various cultural perspectives, being (insert trait) is a key trait these leaders may possess to become successful in their role

Question 22

leadership traits needed in a cross-cultural setting, including:

skilled communicator

Answer 22

• what: to be able to identify the best method of communication in the different markets, situations and people
• how:
  
  • needs to process and have the ability to exchange information accurately and timely, and to actively listen
  • needs to understand that it is more difficult in a cross-cultural setting due to language barriers, but if multiple languages can be spoken to convey messages this is an important advantage.
  • communication itself has to be incredibly nuanced in that it adheres to the cultural norms of people who receive the message. As well as adhering to cultural norms, the message itself must be clear enough for a message to be understood.
• why:
  
  • enables a leader to effectively encode messages that transcend language and cultural barriers
  • continuous learning to navigate cultural nuances and foster team cohesion, promotes innovation and inclusivity

Question 23

leadership traits needed in a cross-cultural setting, including:

socially aware

Answer 23

• what: an awareness of relationships, thus leading to the ability to understand the needs of his team members
• how:
  
  • needs to use his emotional intelligence to be able to perceive and understand complex emotions and to regulate his own emotions to communicate
    well in new markets.
  • cultures are socially constructed so an effective leader must understand the social dynamics of a particular type of culture if they are to be able to be accepted within various cultural groups, such as ethnic cultures and popular sub-cultures
  • needs to be aware of the social norms in country in order to not offend
    any employees.
• why:
  
  • the ability to understand other social and cultural customs leads to the ability to establish trust and long-lasting business relationships
  • continuous learning to navigate cultural nuances and foster team cohesion, promotes innovation and inclusivity

Question 24

leadership traits needed in a cross-cultural setting, including:

skilled decision maker

Answer 24

• what: it is essential for leaders to know when to make decisions quickly if required, but also be able to balance the risk in decision making to avoid damage to the business
• how:
  
  • this trait is needed in a new cross-cultural setting as there is no history of past actions and performance to follow or provide advice
  • a cross-cultural context is new/different/more complex; therefore,
    leaders will often be required to make decisions quickly, and often in the
    absence of full or limited available information.
  • decision must be in-tune with what is happening on a cultural level within an organisation because the way in which a decision is made can be the results of one’s own cultural values.
• why: continuous learning to navigate cultural nuances and foster team cohesion, promotes innovation and inclusivity

Question 25

leadership traits needed in a cross-cultural setting, including:

future thinker

Answer 25

• what:
  
  • to have a long-term vision of where the business is headed, so incremental planning can take place and the business is proactive, rather than reactive in its responses
  • the ability for to see the larger global picture, implement the vision on a
    global scale, and being open to possibilities which would provide an inclusive work
    environment required in a new cross-cultural setting
• how:
  
  • needs to be able to communicate motivation and vision by explaining to them how their daily achievements or setbacks will contribute to the future success of the
    business.
  • thinking about the future can be something that transcends cultural boundaries, however, there may also be variations on the level of importance different cultures place on the future
• why: the continuous learning to navigate cultural nuances, fosters team cohesion, promotes innovation and inclusivity

Question 26

leadership traits needed in a cross-cultural setting, including:

self-dicipline

Answer 26

• what: able to control own emotions and have intelligence in dealing in adverse situations
• how:
  
  • in a cross-cultural setting this could mean being able to keep your emotions under control, especially if there is some sort of miscommunication or misunderstanding between people from different cultures.
  • as a leader, it could also mean being able to stand outside your cultural comfort zone and be able to make a determined effort to apply and embrace cultural norms.
• why:
  
  • a self-disciplined leader understands the impact that their actions and decisions
    may have in a cross-cultural setting, as it helps to provide greater certainty for staff
  • continuous learning to navigate cultural nuances and foster team cohesion, promotes innovation and inclusivity

Question 27

leadership traits needed in a cross-cultural setting, including:

responsible

Answer 27

• what: The ability to be take control and be answerable, independent, accountable, accept authority and be more aware that actions have consequences.
• how:
  
  • this trait is needed in a new cross-cultural setting to understand where pre-established ideas or the ‘same old’ consensual view of reality cannot be relied upon
  • to understand where adaptation or new ideas are required
• why: continuous learning to navigate cultural nuances and foster team cohesion, promotes innovation and inclusivity

Question 28

leadership traits needed in a cross-cultural setting, including:

motivational

Answer 28

• what:
  
  • the ability to use psychological forces/motivate people to strive for certain goals rather than simply act on orders
• how:
  
  • leaders need to be aware a new cross-cultural setting to provide motivation, direction and support for staff while recognising differences in intrinsic and extrinsic motivations, rewards and punishments in different cultural settings
• why: continuous learning to navigate cultural nuances and foster team cohesion, promotes innovation and inclusivity

Question 29

adapting leadership styles in a cross-cultural setting, including:

autocratic

Answer 29

• cross-cultural setting leadership is the ability to effectively lead and manage individuals from diverse cultural backgrounds; understanding the distinct cultural dynamic that influences business operations.
• an autocratic leader communicates one-way, making decisions alone.
• how:
  
  • in a cross-cultural setting, there may be communication breakdowns due to language barriers, educational and cultural differences - which may hinder understanding the culture or new business landscape
  • senior management/businesses can eliminate the process of involving employees in the decision making-process
• why:
  
  • it could potentially reduce the time to make a decision, reduce misunderstandings within teams and potential conflicts. employees can then focus on their core roles.
  • it allows for quick and concise decisions pertaining to the future of the company

Question 30

adapting leadership styles in a cross-cultural setting, including:

participative

Answer 30

• what:
  
  • what: cross-cultural setting leadership is the ability to effectively lead and manage individuals from diverse cultural backgrounds; understanding the distinct cultural dynamic that influences business operations.
  • a participative leadership invites input from employees on company decisions - allows to gain a two-way communication from employees from a diverse background.
• how:
  
  • businesses can encourage employees to become actively involed in the decision-making process and develop positive relationships with employees with a two-way comunication processes.
  • they can also take advantage of the cultural knowledge skills and expertise of a diverse workforce
• why: this could breed innovation, create feelings of belonging, motivation, and inclusion among staff and help retain and reduce staff turnover.

Question 31

adapting leadership styles in a cross-cultural setting, including:

situational

Answer 31

• what:
  
  • what: cross-cultural setting leadership is the ability to effectively lead and manage individuals from diverse cultural backgrounds in a manner that fosters inclusivity, adaptability and mutual respect; understanding the distinct cultural dynamic that influences business operations.
  • a situational leaders adjusts their style to fit the development level of the followers they are trying to influence
• how:
  
  • managers adapt their actions, methods of communication and decision making to the sitaution and are able to utilise multiple styles as conditions change
  • recognise strengths and weaknesses of each style and apply this knowledge
• why:
  
  • promotes the benefits of combining a range of different styles
  • changing to situational leadership, can be more democratic which could develop positive relationships with employees, recognising their success and adding to their motivation.