Topic 10.4 - Problems with strategies and why strategies fail

Question 1

Difficulties of strategic decision making and implementing strategy

Answer 1

• will have unpredictable long term impacts

Question 2

Planned strategy

Answer 2

Intended strategy that is determined by a formal strategic planning process

Question 3

Emergent strategy

Answer 3

A pattern of action that develops over time in an organisation in the absence of a specific mission and goals or despite a mission and goal

Question 4

Reasons for strategic drift

Answer 4

• business fails to adapt to changing external environments
• what worked before doesn’t work now
• complacency has set in
• senior management deny there is a problem

Question 5

The possible impact of the divorce between ownership and control

Answer 5

Dealing

• ensuring financial rewards and incentives are offered to managers align with shareholder interests
• implementing suitable corporate governance procedures to ensure shareholders are protected as far as possible
• company legislation

Question 6

Corporate governance

Answer 6

System by which companies are directed and controlled

Question 7

Evaluating strategic performance

Answer 7

• measured with comparison with corporate objectives
• profit
• competitors

Question 8

The value of strategic planning

Answer 8

• supported by PESTLE

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Question 9

The value of contingency planning

Answer 9

• minimise impact of foreseeable events and plan for how the business will resume normal operations after the crisis
• understand potential effects if things go wrong
• can waste resources as may never be used