MGMT 309 TAMU Test 2

What are the kinds of goals by level?

Mission Statement, Strategic Goals, Tactical Goals, Operational Goals

What is a Mission Statement?

statement of an organizations fundamental purpose

What are Strategic Goals?

Goals set by and for TOP management of the organization that address broad, general issues

What are Tactical Goals?

Set by and for MIDDLE managers; their focus is on how to operationalize actions to strategic goals

What are Operational Goals?

set by and for LOWER-LEVEL managers to address issues associated with tactical goals

What is the criteria for effective goals?

Specific and Measurable, cover key result areas, challenging but realistic, defined time period, linked to reward

What are the 3 kinds of organizational plans?

Strategic Plans, Tactical Plas, and Operational Plans

What are Strategic Plans?

a general plan set by and for TOP management that outlines resource allocation, priorities, and action steps to achieve strategic goals

What are Tactical Plans?

A plan aimed at achieving the tactical goals set by and for MIDDLE management

What are Operational Plans?

Short term focus plans that are set by and for lower-level management (contingency plans)

What are long range plans?

plans of 5 years or more (strategic)

What are intermediate plans?

usually cover from 1-5 years and parallel tactical plans

What are short-range plans?

short range (operational) action and contingency plans of 1 year or less

What is the planning staff responsible for?

gathering information, coordinating planning activities, and taking a broader view than individual managers

What is the planning task force?

created when the organization wants a special circumstance addressed

Who are the board of directors?

A group of people that establish corporate mission and strategy-may engage in strategic planning

Who is the chief executive officer?

may serve as president or board chair; has a major role in planning and implementing the strategy

What is an executive committee?

composed of top executives; meet regularly with the CEO to review strategic plans

What is line management?

have formal authority and responsibility for management of the organization; help to formulate strategy by providing information; are responsible for executing the plans of top management

What is contingency planning?

the determination of alternative courses of action to be taken is an intended plan is unexpectedly disrupted or rendered inappropriate

What is an example of contingency planning?

Y2K

What is Crisis Management?

The set of procedures the organization uses in the event of a disaster or other unexpected calamity

What is an example of crisis management?

Hurricane evacuation in Houston; Apollo 13 movie

What are the major barriers to goal setting and planning?

inappropriate goals, improper rewards system, dynamic and complex environment, reluctance to establish goals, resistance to change, constraints

How do we overcome the barriers to goal setting and planning?

understanding the purposes of goals and planning, communication and participation, consistency, revision, and updating, effective reward system

What is a standing plan?

A plan that is repeated; a policy

What is a single use plan?

One and done (Apollo 13 example)

What is Management by Objectives? (MBO)

a technique for integrating formal goal setting and planning by giving subordinates a voice in clarifying what they are expected to accomplish

What is a strategy?

a comprehensive plan for accomplishing an organization's goals

What is strategic management?

involves formulating and implementing strategies to take advantage of business opportunities and meet competitive challenges

What are effective strategies?

promote superior alignment between an organization, its environment, and its goals

What are the 3 components (elements) of strategy?

Distinctive competence, scope, resource development

What is distinctive competence?

Something an organization does exceptional well; what you're known for

What is scope?

range of markets in which an organization will compete; Their niche

What is resource development?

How an organization will distribute its resources across the areas in which it competes; How do I allocate my resources-who gets what?

What are the types of strategic alternatives?

Business-level strategy and Corporate-level strategy

What is Business-level strategy?

The set of strategic alternatives that an organization chooses from as it conducts business in a particular industry or a particular market

What is Corporate-level strategy?

The set of strategic alternatives that an organization chooses from as it manages its operations simultaneously across several industries and several markets

What is strategy formulation?

the set of processes involves in creating or determining the organization's strategies; it focuses on the content of its strategies

What is strategy implementation?

the methods by which strategies are operationalized or executed within the organization; it focuses on the processes though with strategies are achieved

What is a deliberate strategy?

a plan, chosen and implemented to support specific goals, that is the result of a rational, systematic, and planned process of strategy formulation and implementation

What is a emergent strategy?

a pattern of action that develops over time in the absence of goals or missions, or despite goals and missions

What is an example of a deliberate strategy that was turned into an emergent strategy?

The Volkswagen Beetle due to high demand

What are organizational strengths?

skills and abilities enabling an organization to conceive of and implement strategies

What are common organizational strengths?

organizational capabilities possessed by numerous competing firms (construction science major at career fair)

What are distinctive competencies?

useful for competitive advantage and superior performance; A&M and our traditions; what sets us apart or what we do better

What is the imitation of distinctive competencies?

removes the competitive advantage of the competency

What are sustained competitive advantages?

occurs when a distinctive competence cannot be easily duplicated; is what remains after all attempts at strategic imitations cease (coke sending produces overseas)

What are organizational weaknesses?

skills and capabilities that do not enable an organization to choose and implement strategies that supposed it's mission

What are competitive disadvantages?

occurs when an organization fails to implement strategies being implemented by competitors

What are organizational opportunities?

areas in the organization's environment that may generate high performance

What are organization threats?

areas in the organization's environment that make it difficult for the organization to achieve high performance

What are Porter's generic strategies?

Differentiation strategy, overall cost leadership strategy, focus strategy

What is Porter's differentiation strategy?

an organization seeks to distinguish itself from competitors through the quality of its products or services

What is Porter's overall cost leadership strategy?

an organization's attempts to gain competitive advantage by reducing its costs below the costs of competing firms

What is Porter's focus strategy?

an organization concentrates on a specific regional market, product line, or group of buyers

What are Miles and Snow's Strategy types?

Prospector, Defender, Analyzer, Reactor

What is the prospector strategy?

encourages creativity to seek out new market opportunities and to take risks; develops flexibility to meet changing market conditions by decentralizing its organizational structure (Amazon)

What is the Defender strategy?

focuses on defending its current market by lowering its costs and/or improving the performance of its current products (Mrs. Fields cookies)

What is the analyzer strategy?

incorporates elements of both the prospector and the defender strategies to maintain business and to be somewhat innovative (Yahoo)

What is the reactor strategy?

has no clear strategy; reacts to changes and events NOT INTENTIONAL- "Wait and see"

What are the stages in a product's life cycle?

introduction, growth, maturity, decline- BUSINESS LEVEL STRATEGY

What's the difference between the growth and maturity stage?

Growth stage focuses on ensuring the quality and delivery products; Maturity focuses on low costs and new products

What are Strategic Business Units?

(SBU's) each business or group of businesses within and organization is engaged in serving the same markets, customers, or products

What is Diversification?

The number of businesses an organization is engaged in and the extent to which these businesses are related to one another

What are SBU's and Diversification a part of?

Formulating Corporate-Level Strategies

What at the the corporate level strategies?

Single-product strategy, related diversification, unrelated diversification

What is single-product strategy?

an organization manufactures one product or service and sells it in a single geographic market (simplicity); WD-40

What is related diversification?

a strategy in which an organization operates in several different businesses, industries, or markets that are somehow linked (synergy)-Godfather clip

What are the basis of the relatedness?

similar technology, common distribution and marketing skills, common brand name and reputation, common customers

What is unrelated diversification?

no commonality on how you choose to expand (risk/return) Berkshire Hathaway stock

What is backward vertical integration?

begininning a business that furnishes resources previously handled by a supplier-campbells soup

What is forward vertical integration?

beginning business previously handled by an intermediary and selling more directly to consumers-mail order prescriptions

What is a merger?

the purchase of one firm by another of approximately the same size (creating a third)

What is an acquisition?

the purchase of a firm b another firm that is considerably larger (banks, airlines)

What are the purposes of mergers and acquisitions?

to diversify through vertical integration

to acquire complementary products or services linked by a common technology and common customers

to create or exploit synergies that reduce the combined organizations costs of doing business to increase revenues

What are portfolio management techniques?

methods used by diversified firms to make decisions about what businesses to engage in and how to manage these businesses to maximize corporate performance

What are the two important portfolio management techniques?

BCG (Boston Consultant Group) and GE Business Screen (General Electric)

What is the BCG Matrix?

2X2; evaluates a portfolio of businesses on the growth rate of their respective markets and each business's relative share of its market

What does the BCG Matrix classify the different types of business as?

Dogs, cash cows, Questions marks, and Stars

What is the GE Business Screen?

A method of evaluation businesses in a diversified portfolio along two dimensions; industry attractiveness and competitive position (strength) of each firm in the portfolio

What are the 3 types of Global Efficiencies?

Location efficiencies; economies of scale; economies of scope

What are location efficiencies?

seeking lower input cost locations

What are economies of scale?

larger facilities result in lower costs (costco)

What are economies of scope?

broadening product lines

What is multi market flexibility?

international businesses may respond to a change in one country by implementing a change in another county

What is Worldwide learning?

the diverse operating environments of multinational corporations (MNC's) contribute to organizational learning that can be transferred to other operating environments (realize what you're doing)

What are the 3 ways to developing international and Global strategies?

Global efficiencies, Multimarket flexibility, and worldwide learning

What are the strategic alternatives for international business?

home replication, multi-domestic strategy, global strategy, and transnational strategy

What is home replication?

utilizing a core competency or a firm specific advantage developed at home as a main competitive weapons in foreign markets

What is multi domestic strategy?

managing a corporation as a collection of independent operating subsidiaries frees a firm to customize its products, its marketing campaigns, and operating techniques to meet local customer needs

What is global strategy?

viewing the world as a single marketplace and having as a primary goal the creation of standardized goods and services that will address the needs of customers worldwide

What is transnational strategy?

attempting to combine the benefits of scale efficiencies pursued by a global corporation, with the benefits and advantages of local responsiveness of a multi-domestic corporation

What is decision making?

the act of choosing one alternative from among a set of alternatives

What is decision-making process?

the process of recognizing and defining the nature of a decision situation, identifying alternatives, choosing the best alternative, and putting it into practice

What does an effective decision optimize?

profits, sales, employee welfare, and market share

What are the decision making conditions?

Decision making under certainty, decision making under risk, decision making under uncertainty

What is decision making under certainty?

the decision maker knows with reasonable certainty what the alternatives are an what conditions are associated with each alternative

What is decision making under risk?

the availability of each alternative and its potential payoffs and costs are all associated with risks

What is decision making under uncertainty

the decisions maker does not know all the alternatives, the risks associated with each, or the consequences of each alternative