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GCS > Theory of Strategy and Culture > Flashcards

Theory of Strategy and Culture Flashcards

1
Q

Definition of Strategy?

A

The direction and scope of an organisation over the long term

Achieved advantage in a changing environment through its configuration of resources and competences with the aim of fulfilling stakeholder expectations

(Johnson, Scholes and Whittington, 2009)

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2
Q

Johnson, Scholes and Whittington, 2009 define what?

A

Strategy

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3
Q

How is Strategy achieved according to Johnson, Scholes and Whittington, 2009?

A

Through its configuration of resources and competences with the aim of fulfilling stakeholder expectations

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4
Q

Basic goal of strategy?

A

To increase profit margins and therefore performance

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5
Q

What is the difference between strategy and global strategy?

A

Essentially none

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6
Q

Strategy becomes what when competing internationally?

A

More complicated

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7
Q

International Strategy definition? (Tallman and Yip, 2009)

A

“Brings forward and explicit consideration for the effects of locational differences and institutional contexts”

“that require adaptations in the application of classic strategic analysis techniques”

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8
Q

Who defined International Strategy?

A

(Tallman and Yip, 2009)

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9
Q

Why is international strategy more difficult?

A

Due to the differences companies need to take into consideration when developing their scope

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10
Q

What is the Strategy Tripod? (Peng)

A

3 perspectives on what influences a firms strategy

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11
Q

What are the three strategies in Peng’s strategy tripod?

A

Industry-based view
Resource-based view
Institutional perspective

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12
Q

What is the industry based view?

A

It is the structural conditions of the particular industry in which they operate that makes the firms differ

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13
Q

Why do firms differ?

A

Strategy Tripod- IBV, RBV, IP

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14
Q

What is the resource based view?

A

It is the resources and capabilities firms have that makes them differ (not structural conditions)

Every firm is a bundle of productive resources and capabilities, competitive advantage is based on these

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15
Q

What is the institutional perspective?

A

Institutional constraints that companies face, both formal and informal

Strategy is created within the boundaries of constraints
Firms differ due to different boundaries

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16
Q

What is determined by Porter’s Five Forces Framework?

A

Structural Conditions of the industry

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17
Q

Porter’s Five Forces Framework shows

A

Industry Competitiveness

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18
Q

Industry competitiveness is made up of (Porter’s Five Forces Framework)

A 
Bargaining power of customers
Bargaining power of suppliers
Threats of entrants
Threats of substitutes
Rivalry among competitors
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19
Q

Performance depends on?

A

Degree of competitiveness in industry

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20
Q

The stronger and more competitive the five forces are

A

The less likely to earn above average return

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21
Q

How can firms respond to different structural conditions?

A

By implementing different strategies

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22
Q

What are the three main strategies firms can implement?

A

Cost leadership
Differentiation
Focus strategy

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23
Q

What is cost leadership?

A

Focus on decreasing price, selling cheapest compared to competition in the market

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24
Q

What is differentiation?

A

Create products that are different and bring significant vale to the customers compared to competitor products

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25
Q

What are the features of differentiation strategy?

A

Low volume, high margin
Uniqueness is hard to identify
Lower bargaining power of suppliers and buyers
Key functional areas = R&D, Marketing/Sales, After Sales

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26
Q

What is focus strategy?

A

Focus on serving needs of a particular segment or niche of industry

e.g geographical market, type of customer, product line

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27
Q

When may a focus strategy be successful?

A

When a firm possesses intimate knowledge about a particular segment

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28
Q

What are the two types of focus strategy?

A

Specialised cost leader

Specialised differentiator

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29
Q

What is a specialised cost leader?

A

Focus strategy that deals with a narrower segment compared with traditional

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30
Q

What is a specialised differentiator?

A

Has a smaller, narrower and sharper focus than a large differentiator (Focus strategy)

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31
Q

Resources and capabilities are defined as what?

A

The tangible and intangible assets a firm uses to choose and implement its strategy

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32
Q

What are tangible assets?

A

Assets that are observable and easily quantifiable

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33
Q

What are intangible assets?

A

Assets that are difficult to observe

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34
Q

Three types of tangible assets

A

Financial
Physical
Technological

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35
Q

Three types of intangible assets

A

Human
Innovation
Reputation

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36
Q

What is the dynamic capabilities and resources view? (Teece, 2007)

A

Need the ability to enhance and reconfigure resources and capabilities for long term success

Extension fo RBV as RBV is too static as firms progress and change

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37
Q

Who coined the dynamic capabilities?

A

Teece 2007

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38
Q

For dynamic capabilities, core competencies should be used to do what?

A

Modify short-terms competitive positions that can be used to build a competitive advantage

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39
Q

What is the cycle of dynamic capabilities?

A

Sense threats and opportunities
Seize opportunities
Reconfigure capabilities

40
Q

What is the VRIO framework? (Barney, 1991)

A

Strategic idiosyncratic resources for sustainable competitive advantage
(Assessment of RBV)

41
Q

What is the VRIO framework made up of?

A

Value
Rarity
Imitability
Organisation

42
Q

Who coined the VRIO framework?

A

Barney 1991

43
Q

What is value in VRIO?

A

Do the resources and capabilities add value?

Necessary for competitive advantage

44
Q

What is rarity in VRIO?

A

How rare are the valuable resources and capabilities?

Valuable but common = no advantage
Valuable and rare = temporary advantage

45
Q

What is imitability in VRIO?

A

How easy is it to imitate the tangible resources and capabilities than the intangible ones?

Valuable, rare but imitable = temporary advantage
Valuable, rare and non imitable = sustained competitive advantage

46
Q

Why is imitation so difficult?

A

Hard to acquire in a short amount of time what a competition has developed over a long period of time

Events earlier in time affect future events

Difficult to identify casual determinants of performance

47
Q

What is organisation in VRIO?

A

How is a firm organised to develop and leverage the full potential of its resources and capabilities?

48
Q

How can a firm leverage organisation?

A

Use complementary assets effectively
Manage social complexity effectively
Invisible relationships add value and make imitation difficult

49
Q

VRIO only achieves a

A

Short term competitive advantage

50
Q

Need what beyond the VRIO to achieve sustained competitive advantage?

A

Dynamic Capabilities

51
Q

What is the institutional perspective?

A

Companies differ as they operate in different institutional environments

52
Q

What are institutions according to North (1990)?

A

“The humanly devised constraints that structure human (political, economic and social) interaction”

53
Q

What does North (1990) define?

A

Institutions

54
Q

What is the impact of institutions on firm behaviour?

A

Govern individual and firm behaviour

Constrain and lead to use strategies

55
Q

What constitutes formal institutions?

A

Laws
Regulations
Rules

56
Q

What constitutes informal institutions?

A

Norms
Cultures
Ethics

57
Q

What is the regulatory pillar?

A

Formal institutions

58
Q

What is the normative pillar?

A

Informal institutions

59
Q

What is the major role of institutions?

A

To reduce uncertainty by signalling which conduct is legitimate or not

60
Q

Uncertainty can lead to

A

Transaction costs

61
Q

What are transaction costs?

A

Costs associated with economic transactions/costs of doing business

62
Q

What is a major source of transaction costs?

A

Opportunism

63
Q

What is opportunism?

A

“Self interest seeking with guile” (Williamson, 1993)

64
Q

Who defined opportunism?

A

Williamson (1993)

65
Q

Who coined institutional isomorphism?

A

Powell and Di Maggio (1993)

66
Q

What is institutional isomorphism?

A

Firms that operate in different institutional environments exhibits similar behaviours and strategies

67
Q

What is isomorphism?

A

Constraining process that forces one unit in a population to resemble other units that face the same set of environmental conditions

68
Q

What are the three types of isomorphism?

A

Coercitive
Mimetic
Normative

69
Q

What is Coercitive Isomorphism?

A

From political influence and the problem of legitimacy

70
Q

What is Mimetic Isomorphism?

A

From standard responses to uncertainty

71
Q

What is Normative Isomorphism?

A

From professionalisation

72
Q

Isomorphism

A

Organisational characteristics are modified in the direction of increasing compatibility with environmental characteristics

73
Q

What is the Institutional Based view in the Organisational field?

A

Isomorphism, Powell and Di Maggio 1983

74
Q

What are the two core propositions in the Institutional Perspective?

A

Bounded Rationality

Informal Ties

75
Q

What is Bounded Rationality?

A

Managers and firms RATIONALLY pursue they interests and make choices within the formal and informal constraints in a given institutional framework

76
Q

What is Informal Ties?

A

In situations where formal constraints are unclear or fail, informal constraints will play a LARGER role in reducing uncertainty to managers and firms

(While formal and informal constraints combine to govern firm behaviour)

77
Q

Strategic Choices are interlinked with what?

A 
Institutions
------ Dynamic interactions
Firms
------- Industry conditions and resource specific boundaries
Strategic Choices 
--------Formal and informal constraints
78
Q

One major informal institution is?

A

Culture…

Of people, of nations and workplaces

79
Q

What is the definition of culture?

A

“The collective programming of the mind which distinguished the members of one human group from another” Hofstede

80
Q

What does culture include?

A

“Systems of values; and values are among the building blocks of culture” Hofstede

81
Q

Summarised definition of culture

A

A system of values and norms that are shared among a group of people

82
Q

What does culture influence and why?

A

Business activities, international operations because of different cultural conditions

Management must adapt to domestic aspired cultural values

83
Q

What are Hofstede’s 6 Dimensions of culture?

A 
Power Distance
Uncertainty Avoidance
Individual vs Collectivism
Masculinity vs Femininity
Short-term vs Long-term
Indulgence vs Restraint
84
Q

What is Power Distance?

A

Extent to which the less powerful accept and expect that power is distributed unequally

Emotional distance between the person at the top and one below

85
Q

High power distance cultures are

A

Countries that let inequalities for into unequal power and wealth

86
Q

High power distance cultures believe

A

That power and authority are facts of life

Unconsciously and concisely teach that people are not equal

87
Q

Low power distance cultures

A

Expect and accept power reactions that are more consultative and democratic

88
Q

What is Uncertainty Avoidance?

A

To dow its handling ambiguity

Extent to which different cultures socialise their members into accepting ambitious situations and tolerating uncertainty

Complex, related to stress and anxiety

89
Q

High uncertainty avoidance features

A

Premium on job security, retirement benefits etc.

90
Q

Low uncertainty avoidance features

A

More willing to take risks, less resistance to change

91
Q

What is Individualism vs Collectivism

A

Focused on relationship between individual and their fellows

92
Q

Individualistic society features

A

Loose ties between individuals

Individual achievement and freedom highly valued

93
Q

Collectivism features

A

Tight ties

Like extended family, look after collective interests

94
Q

What is Masculinity vs Femininity?

A

Focused on relationship between generations and work roles

95
Q

Features of Masculine society

A

Sharp distinction between men and women in same job
Traditional masculine values that influence cultural ideas
e.g Tough, practical

96
Q

Features fo Feminine society

A

Little differentiation between men and women in the same job

e.g. Tender, concerned with Quality of Life

GCS (4 decks)

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