Commerce 4PA3 MC Test

General Management Perspective

having the capacity to understand and appreciate issues facing individuals placed in the specific role of a general manager

general manager

someone who has responsibility for all functional facets of the business

create, capture and distribute value

what is the job of the general manager?

set direction, create strategy, implement change

3 fundamental components of the GM's job?

operating performance, organizational health

2 sets of measures for assessment of organizational performance

quadrant 1

desired state of performance matrix

quadrant 2

inward-looking and self-satisfied organization where people enjoy their work but are performing inadequately in terms of market/financial standards

quadrant 3

business is achieving operating objectives at the expense of organizational health

quadrant 4

represents a problem in which immediate and comprehensive action is necessary

colins and porras framework

based on solid research and provides a practical approach for applying the concept. vision consists on 2 major components. guiding philosophy includes the core purpose and values of the organization

core purpose and core values

guiding philosophy 2 elements

values

represent the basic beliefs that govern individual and group behaviour in an organization

core purpose

defines organization's reason for being and may never be fully realized, in contrast to goals and objectives, which are formulated specifically to be achievable

mission statement

mission is clear and compelling goal that serves to unify an organization's efforts

feasibility

question of whether you can reasonably expect to get to your visionary destination cannot be answered in the abstract

flexibility

vision must be flexible because circumstances may change in unanticipated ways

stretch

vision should go further than what is doable with today's resources/capabilities

managerial strategy

Which of the following is not one of the major levels of organization strategy?

management preferences

When developing alternatives based on the Diamond-E drill, this element often provides the most strain on action plans:

development

Which stage is not included in the product life cycle?

the balanced scorecard

Kaplan and Norton developed:

strategic planning

approach to undertaking strategic analysis on a recurring basis and deals with who develops the strategy, how it happens and when it takes place

strategy

concrete expression of how an organization intends to operate in service of whatever mission it has designed

definitive tool for building, communicating and maintaining direction of the business

goals

set up targets against which progress/performance can be assessed

product market focus

provides critical direction to people throughout the organization so they can focus their effort on targeted markets and products/services

value proposition

beacon for employees, illuminating specifically what the business is trying to do for customers and clients and requirements of their particular goal

defines tangible benchmark for testing customer appeal and competitive differentiation

statement of the fundamental benefit or benefits that it has chosen to offer in the market place

core activities

highlight key jobs that will have to be done and the capabilities that need most to be developed and reinforced

provide basis for identifying cost, control and flexibility trade-offs that would be sensitive to external trends and developments

relates to the notion of cross-enterprise leadership

strategy business unit

sells a distinct set of products/services to an identifiable group of customers and is accountable for distinct revenues, costs, and investments directly or by reasonable allocation

business strategy

focuses on how an organization will create value within a particular line of business

corporate strategy

deals with portfolio of business strategies and how they relate to each other

strategic goals

an expression in measurable terms of what a business intends to achieve or where it intends to go

hard goals

focus on aims and performance of the business as a classic economic entity whether it be for-profit or not-for-profit, revealing measurable targets/time frames

soft goals

set out targets for the social conduct of the organization

growth strategy

implies priority on market, plant and personnel investments in order to grow the business, if necessary at the expense of current profitability

harvest strategy

implies stingy approach to investment and spending as priority is given to milking cash and profits from a business

divest

give priority to those actions that prepare and initiate the sale of the business

scope

whether the product/service is existing or new and whether the market already exists or is new, which frame this type of strategic choice

penetration strategy

suggests there is market share to be gained by focusing on the current products and markets, or perhaps there is growth in the market that would provide growth even if market share were to remain the same

low cost strategy

endeavours to provide products/services at a lower cost than competitors and enables firms to compete on price

differentiation strategy

integrated set of actions taken to produce goods or services (at an acceptable cost) that consumers perceive as being different in ways that are important to them

broad/intermediate levels of generality

emphasis is on describing the basic activities that a business has chosen to perform and less so on how it intends to link and perform them

process level of generality

focus turns to mapping activity systems in sufficient detail to support operations planning and coordination, systems development and quite detailed comparisons with competitors

henry mintzberg

creator of 5 Ps

plan, position, ploy, perspective, pattern

5Ps by Henry Mintzberg

emergent strategy

strategy that comes from the actions taken over a period of time

configuration school

differs from all other schools in one fundamental respect, it offers the possibility of reconciliation, one way to integrate the messages of the other schools

management preferences

acknowledges the individual elements that arise from the cognitive, political, entrepreneurial and cultural perspectives

design, planning, positioning

3 schools that influence field of strategy and strategic analysis

design school

considers strategy making as an informal process of conception (sometimes called SWOT)

planning school

accepts the premises of the former that the process be informal and chief executive be the key actor

positioning school

focuses on the content strategies more than on the processes

content side

emphasis placed on either external/internal has been a differentiating factor on what strategy includes

process side

emphasis has been placed on either strategy as a well-defined analytical process or strategy as an emergent and perhaps chaotic process has differentiated how strategy arises

corporate strategy

traditionally looks at decisions about the management of businesses across industries

business-level strategy

an integrated and coordinated set of commitments and actions the firm uses to gain a competitive advantage by exploiting core competencies in specific product markets

business portfolio, corporate resources, corporate management processes

develop a practical description of corporate strategy by focusing on 3 aspects of a multi-business operation

pure play

at least 95% of total corporate revenue comes from one business unit

dominant business

70-95% of revenue comes from a single business unit

unrelated diversification

less than 70% of revenue comes from a dominant business and there are no common links between the businesses

related constrained

less than 70% of revenue comes from any one business unit but the underlying businesses are closely linked in terms of product, technology and distribution

related linked

less than 70% of revenue comes from any one business unit and there are limited links between the businesses

U-form functional structure

firms pursuing a pure-play strategy should use...

M-Form structure

firms pursuing a dominant strategy would use...

diamond-e model

high-level road map for strategic analysis which identifies the key variables that need to be considered in the analysis and it structures the critical relationships among them

strategy

critical linking variable - telsl you what opportunities business is pursuing and what resources/capabilities and management required for effective execution

high internal consistency

leads to successful performance

short-run risk

usually one of miscalculating timing, potential or competitive reaction

long-run risk

usually one of missing/underestimating changes in the environment

capability risks

arise from inconsistencies between strategy and the resources/capabilities within the organization to deliver on strategy

environmental risks

manifest themselves in industry profits

strategic proposals

discrete ideas or action plans that will have significant implications for one or more of the components of the strategy and thus for the strategy of the business as a whole

strategy-environment linkage

first task in using diamond-E which requires assessment of forces at work in the environment and the translation of these observations into their implications for the business

strategy-resources linkage

second task in Diamond-E framework which identifies resource requirements for current strategy/new strategic proposal

strategy-organization linkage

usually last step in diamond-E analysis to determine whether organizational capabilities will allow the proposal to be implemented effectively

leadership, structure, management processes, culture

4 critical variables that have a major impact on organization capabilities

management preference

acknowledges that strategic analysis and action are not simply an economic and rational undertaking but are also a socio-psychological process involving what can be substantial individual differences

preference

captures ultimate expression of what people view as the best course of action

diamond-e analysis

focal point of a more comprehensive process of strategic analysis which provides full strategic review that works from an assessment of the current performance and strategy of the business, through creation and assessment of strategic options to decision and execution

base case analysis, strategic formulation/testing, decision/execution

3 steps/stages of work that need to be completed when doing strategic review

base case analysis

objective is to establish what will happen if you continue to employ the current strategy or modest variations of it and from this determine the urgency for strategic action

strategy formulation/testing

review insights, develop list of new opportunities/problems and assemble proposals that address the most attractive possibilities/urgent challenges

decision/execution

make a choice and plan for execution

environment analysis

includes a macro-environment analysis and an analysis of the industry in which a firm operates

PEST model

examines the political, economic, social and technological forces that impact the industry (supply, competition and demand)

political, economic, social, technological

PEST macro forces

supply, competition, demand

PEST micro forces

Porter's 5 Forces Model

attractiveness is related to the average industry profitability

threat of new entrants, threat of substitutes, bargaining power of suppliers, bargaining power of buyers, threat of competition

5 competitive forces

economies of scale, product differentiation, capital requirements, cost advantages, access to distribution, government policy

6 barriers to entry

suppliers

can impact industry profitability when they have the potential to place firms at the mercy of rising input costs/reduced quality of necessary products/services

buyers

more powerful if they are concentrated or purchase in large volumes if they have full information, if they face few switching costs and if they earn low profits

substitute products

products from outside the industry that can provide a similar package of benefits or otherwise perform the same function as the main product/service in the industry

organizational value chain

set of primary activities selected from the industry's value chain that have been integrated into the structure of an organization

supply chain

includes the chain of activities in other industries that supply inputs for companies in the focal industry

primary activities

inbound logistics, operations, outbound logistics, marketing and sales, service

support activities

firm infrastructure, human resource management, technology development, procurement

industry value chain analysis

identifies where and why customers may be willing to pay less, identifying where value is eroded in an industry

game theory

the study of how people behave in strategic situations

prisoner's dilemma

simple exchange game between two individuals - point is that there is incentive to turn the other in, if both act in this way they will suffer

new economy models

recognize technological change has had a fundamental and pervasive impact on industries