Strategic Management, Organizational Design, and Human Resource Management

Comprehensive practice flashcards covering Strategic Management, Porter's Five Forces, PESTLE analysis, Organizational Structures and Trends, and Human Resource Management principles.

What is an organizational system?

A structured framework of interconnected components—including people, processes, technology, structure, and culture—working together interactively to process inputs (resources) into outputs (goods/services) to achieve specific strategic goals.

Which management theorist is credited with the foundational strategic question, "What is our business and what should it be?"

Peter Drucker.

In strategic management, how do "Ends" differ from "Means"?

"Ends" are the outcomes, goals, and objectives an organization wants to achieve (e.g., target revenue, market share), while "Means" are the strategies, action plans, tactics, and resource allocations used to reach those ends.

What is situational analysis and response in strategic planning?

The strategic process of continuously monitoring and analyzing external environments (threats and opportunities) and internal environments (strengths and weaknesses), followed by formulating a strategic action plan to exploit opportunities, mitigate threats, leverage strengths, and address weaknesses.

What is competitive advantage, and from what does it originate?

An edge an organization holds over competitors that allows it to generate greater sales or margins and retain more customers; it stems from core competencies such as cost structure, brand reputation, or proprietary technology.

What are the $3$ primary measures of organizational performance?

1. Financial Performance (e.g., ROI, ROE, net profit margin, cash flow); 2. Operational/Internal Performance (e.g., efficiency, productivity, quality standards, cycle times); 3. Market/Customer Performance (e.g., market share, retention rates, NPS, customer acquisition costs).

What are the $3$ dimensions of strategic performance measures?

1. Lagging vs. Leading Indicators; 2. Short-Term vs. Long-Term Horizons; 3. Quantitative vs. Qualitative Data.

What is the PESTLE framework and what are its $6$ macro-environmental factors?

A strategic tool used to track broad external forces affecting entire industries and economies. Its $6$ factors are: Demographic, Economic, Political/Legal, Sociocultural, Technological, and Global.

How does Porter's Five Forces framework define an "Industry"?

A group of firms producing products or services that are close substitutes for one another and compete for the same customer base.

What are the $5$ forces in Porter's Five Forces (P5F) framework?

1. Threat of New Entrants; 2. Bargaining Power of Suppliers; 3. Bargaining Power of Buyers; 4. Threat of Substitutes; 5. Intensity of Rivalry.

How do switching costs and brand loyalty influence the Threat of New Entrants (TNE)?

High switching costs and strong brand loyalty create high barriers to entry, which lowers the Threat of New Entrants.

Under what supply division condition is the barrier to entry considered high in Porter's Threat of New Entrants analysis?

When supply is disproportionately divided, meaning established incumbents control a major share of critical supply or raw materials.

How does the capacity for forward integration affect the Bargaining Power of Suppliers (BPS)?

If a supplier can easily integrate forward into the industry's business (e.g., a component manufacturer making the end product), the Bargaining Power of Suppliers is high.

What key distinguishing characteristic defines a "Substitute" in Porter's Five Forces framework?

A substitute is a product or service from an outside or different industry that satisfies the same fundamental customer need.

What are the $3$ criteria used to evaluate the viability of a substitute product or service?

1. Relative price performance; 2. Buyer switching costs; 3. Buyer propensity or willingness to substitute.

How does market growth rate impact the Intensity of Rivalry (IR) among competitors?

Slow market growth results in high rivalry because firms must fiercely battle competitors for existing market share; fast growth results in lower rivalry because firms can expand without taking market share from rivals.

What is the key question addressed at the Business-Level Strategy stage?

"How do we compete and gain market share in this specific industry/market?"

How do Cost-Leadership and Differentiation strategies differ regarding price relationship?

Cost-Leadership allows a firm to charge lower prices than competitors to capture market share (or charge average prices for higher margins); Differentiation allows a firm to command premium pricing due to perceived superior customer value.

What is the key question addressed by Corporate-Level Strategy?

"What businesses should we be in?"

What are the $3$ forms of a Concentration Strategy?

1. Market Penetration (selling more current products to current markets); 2. Market Development (selling current products into new geographical or demographic markets); 3. Product Development (introducing new products to current market segments).

How do Backward Vertical Integration and Forward Vertical Integration differ?

Backward vertical integration expands operations upstream toward suppliers or raw materials, whereas forward vertical integration expands downstream toward distributors or retail buyers.

What is the difference between Related Diversification and Unrelated Diversification?

Related diversification involves entering a new industry that shares operational, strategic, or technological synergies with existing operations; unrelated diversification involves entering a completely new industry with no strategic or operational overlap (conglomerate model).

What is the contingency perspective in organizational structure?

The view that there is no single "best" organizational structure; the optimal structure depends on environmental volatility, firm strategy, technology, and firm size.

What are the disadvantages of a Functional Organizational Structure?

It creates operational silos, hampers cross-departmental communication, slows decision-making, and leads to "functional chimneys" that lack a big-picture strategic view.

What two organizational structures are combined to create a Matrix Structure?

Functional Structure (providing technical expertise) and Divisional/Project/Product Structure (providing project execution or specific deliverables).

Which classical management principle is violated by a matrix structure, and why?

It violates the Unity of Command principle because employees simultaneously belong to a functional department and a project team, reporting to two bosses.

What is a Network Structure in organizing?

A fluid structure where a small core organizational team contracts out major business functions (such as manufacturing, distribution, marketing, and IT) to independent external vendor partners via a hub of contractual relationships.

How do flat organizations differ from tall organizations regarding hierarchy and spans of control?

Flat organizations have few management levels and wide spans of control; tall organizations have many managerial layers and narrow spans of control.

What are the $6$ steps in the effective delegation process?

1. Define the task and desired outcome clearly; 2. Select the right, capable individual; 3. Delegate authority alongside responsibility; 4. Provide required resources and support; 5. Establish checkpoint dates and accountability parameters; 6. Review performance and recognize outcomes.

What are the $3$ key components of Human Resource Management (HRM)?

1. Attracting (workforce planning, recruiting, selection); 2. Developing (socialization, orientation, training, development, appraisal); 3. Maintaining (compensation, fringe benefits, labor relations, retention, health and safety).

What employee count thresholds determine coverage under most EEOC laws versus age discrimination under the ADEA?

Most EEOC laws (such as Title VII and ADA) apply to employers with $15$ or more employees, whereas ADEA age discrimination laws apply to employers with $20+$ employees.

What is a Bona Fide Occupational Qualification (BFOQ), and what characteristic can never qualify as one?

A legal defense permitting hiring based on protected traits if reasonably necessary to the essential operation of that specific enterprise; race can never be a valid BFOQ.

What are the two key testing criteria required for employee selection assessments?

1. Validity: The test measures what it claims to measure and predicts job performance accurately; 2. Reliability: The test yields consistent results over repeated measurements.

What is the distinction between Person-Job Fit and Person-Organization Fit?

Person-Job Fit is the match between individual skills/abilities and specific job requirements; Person-Organization Fit is the match between individual values/personality and organizational culture/mission.

How do Training and Development differ in HRM?

Training focuses on imparting specific skills needed for current job performance, whereas Development focuses on building broader competencies for future career roles.

What are the $5$ recognized types of On-the-Job Training?

1. Job rotation; 2. Coaching; 3. Apprenticeship; 4. Mentoring; 5. Understudy/shadowing assignments.

What is a Behaviorally-Anchored Rating Scale (BARS), and what is its advantage over a Graphic Rating Scale?

An appraisal scale combining numerical ratings with specific behavioral examples for each rating point; it provides higher objectivity, precise behavioral standards, and reduced rating bias compared to a standard graphic rating scale.

What is the Critical Incident Technique in performance appraisal?

A performance evaluation method that involves documenting specific effective or ineffective employee actions and behaviors as they occur over time.

How do PCNs, HCNs, and TCNs differ in an international human resources setting?

Parent-Country Nationals (PCNs/Expatriates) are citizens of the MNC's headquarters country; Host-Country Nationals (HCNs) are citizens of the foreign operating country; Third-Country Nationals (TCNs) are citizens of a country other than the headquarters or host country.

What factor is identified as the $\text{\#1}$ reason for international expatriate assignment failure?

Family adjustment failure (lack of family stability and willingness to relocate).

What is the formula for calculating an Expatriate Compensation Package (ECP)?

$$\text{ECP} = \text{Base Salary} + \text{Cost-of-Living Allowance (COLA)} + \text{Foreign Service Premium} + \text{Hardship}$$

What is the purpose of a Tax Equalization Adjustment in expatriate compensation?

It adjusts compensation so the expatriate employee pays no more income tax than they would have incurred had they remained in their home country.