MOS Chapter 5

Goal

desired future circumstance or condition that the organization wants to realize.

Planning

is the act of determining goals and defining the means of achieving them.

Plan

blueprint specifying the resource allocations, schedules, and other actions necessary for attaining goals

Strategic goals

are broad statements of where the organization wants to be in the future and pertain to the organization as a whole rather than to specific divisions or departments.

ex. Volkswagen announced a strategic goal to build 22 million electric vehicles through 2028.

Strategic Plans

are the action steps by which an organization intends to attain its strategic goals.

Tactical Goals

The outcomes that major divisions and departments must achieve for the organization to reach its overall goals

Tactical Plans

designed to help execute major strategic plans and to accomplish a specific part of the company’s strategy.

Operational Goals

specific, measurable results that are expected from departments, work groups, and individuals.

Operational Plans

specify the action steps toward achieving operational goals and support tactical activities.

Mission

Planning starts with the organization’s purpose or reason for existence,

Mission Statement

is a broadly stated definition of the organization’s basic business scope and operations that distinguishes it from similar types of organizations.

Coalitional Management

involves building an alliance of people who support a manager’s goals and influencing other people to accept and work toward those goals.

Key Performance Indicators (KPIs)

measures that reflect how well lower-level goals are helping the organization progress toward attaining its strategic goal.

Management by Objectives (MBO)

is a method whereby managers and employees define goals for every department, project, and person and use them to monitor subsequent performance. MBO includes the steps of setting goals, developing action plans, reviewing progress, and appraising performance.

Management by Means (MBM)

A recent approach that focuses people on the methods and processes used to attain results, rather than on the results themselves

Contingency Planning

identifies important factors in the environment and defines a range of alternative responses to be taken in the case of emergencies, setbacks, or unexpected conditions.

Scenario Building

managers look at trends and discontinuities and imagine possible alternative futures to build a framework within which unexpected future events can be managed.

ex. Executives at Royal Dutch Shell recently engaged in scenario building for a world of “lower forever” oil prices.

Stretch Goals

are reasonable yet highly ambitious and compelling goals, characterized by both extreme difficulty and extreme novelty, that energize people and inspire excellence.

ex. At Amazon, a stretch goal was to build the first Kindle e-reader with built-in cellular access so people didn’t have to configure devices to Wi-Fi networks.

Strategic Management

refers to the set of decisions and actions used to formulate and implement strategies that will provide a competitively superior fit between the organization and its environment so as to achieve organizational goals.

Strategy

is the plan of action that describes resource allocation and activities for dealing with the environment, achieving a competitive advantage, and attaining goals.

Competitive Advantage

refers to what sets the organization apart from others and provides it with a distinctive edge in the marketplace. four elements: company’s target customer, core competencies, synergy, value

core competence

something that the organization does well in comparison to others

ex. amazon has core competencies of operational efficiency and a superb distribution system

synergy

exists when the organization’s parts interact to produce a joint effect that is greater than the sum of the parts acting alone

ex. Apple attains synergy with a multitude of services that work with its popular iPhone and a new digital credit card to enable customers to easily charge services through the smartphone.

SWOT analysis

an audit or careful examination of strengths, weaknesses, opportunities, and threats that affect organizational performance.

Strategic Business Unit (SBU)

is a division of the organization that has a unique business, mission, product or service line, competitors, and markets relative to other units of the same organization.

BCG Matrix

evaluates SBUs with respect to two dimensions—business growth rate and market share—and classifies them as cash cows, stars, bright prospects, or dogs.

Diversification

The strategy of moving into new lines of business

ex. Amazon diversified when it purchased Twitch Interactive, and Facebook diversified by purchasing WhatsApp.

Related Diversification

moving into a new business that is related to the corporation’s existing business activities.

Differentiation Stratgey

managers seek to distinguish the organization’s products and services from those of others in the industry.

ex. Products that have benefited from a differentiation strategy include Apple smartphones and tablets, Tesla automobiles, and Gore-Tex fabrics.

Cost leadership strategy

managers aggressively seek efficient facilities, cut costs, and use tight cost controls to be more efficient than others in the industry.

focus strategy

managers use either a differentiation or a cost leadership approach, but concentrate on a specific regional market or buyer group.

ex. Allegiant Air has succeeded with a focused cost leadership strategy by offering bare-bones service and flying people to holiday destinations out of small cities that other carriers have abandoned or never served.