Chapter 5: Strategic Management and Planning (Video Notes)

Flashcards covering the key concepts from the lesson on goals and planning, mission, planning levels, goal conflict resolution, planning benefits/limits, MBO/MBM, crisis planning, scenario planning, stretch goals, BHAGs, Porter's strategies, the BCG matrix, SWOT, diversification, and strategic thinking.

What is a goal in organizational planning and why is it important?

A goal is a desired future circumstance or condition the organization aims to realize; goals define the organization's purpose and guide planning.

What is a plan?

A blueprint for goal achievement that specifies the necessary resource allocations, schedules, tasks, and other actions.

What is the difference between goals and plans?

Goals specify future ends, while plans specify today's means; planning usually combines determining goals and defining the means to achieve them.

What are the levels of goals and plans in an organization?

Strategic (company level), tactical (divisional level), and operational (departmental level).

What initiates the planning process in an organization?

A formal mission that defines the basic purpose for employees and external audiences.

What are strategic goals (official goals)?

Broad statements describing where the organization wants to be in the future, applying to the organization as a whole.

What are strategic plans?

Action steps by which the company intends to attain strategic goals; a long-term blueprint for organizational activities and resource allocations, usually 2–5 years.

What are tactical goals and tactical plans?

Goals and plans designed to help execute the major strategic plans; set by middle managers to achieve specific parts of the strategy; typically cover the next year.

What are operational goals?

The results expected from work groups and individuals that help achieve the organization's overall goals.

What is a mission statement?

The organization's basic purpose; provides meaning, direction, and serves as the basis for deciding goals and plans; motivates employees.

How does a clearly defined mission affect motivation?

Companies with clearly defined missions tend to have higher employee motivation (63%) compared to those without (31%).

What is goal conflict and how can it arise?

Conflicts occur when achieving one goal makes another harder to achieve; examples include trade-offs between profitability and user relevance, or cost-cutting versus R&D.

What are common approaches to resolving goal conflicts?

Building a coalition, modifying goals by time or location, addressing conflicts with debate and dialogue, promoting collaboration, and considering manager departures.

What does 'build a coalition' involve in goal conflict resolution?

Forming an alliance of people across the organization to support a goal, gathering views from employees, customers, and managers; example Nike Bangladesh case.

What does it mean to 'modify goals by time or location'?

Balancing goals by separating them across time or space to reduce conflict (e.g., different budgets/teams or separate newsrooms for online vs print).

How is conflict resolved through debate and dialogue?

Facilitates face-to-face discussions and cross-department collaboration to reach a shared goal, as seen in Walmart’s deliberations and other cases.

What is 'manager departures' as a means of resolving goal conflicts?

Sometimes conflicts are so strong that managers who support a goal leave the organization, as with WhatsApp founders leaving Facebook and others leaving over privacy issues.

What are KPIs and how do they relate to goals?

Key Performance Indicators are the metrics used to measure progress toward goals; goals should be a small, clear set of measurable targets.

What is Management by Objectives (MBO)?

A system in which managers and employees define goals for each department, project, and person and use them to monitor performance (exhibit 5.5).

What is an example of MBO in practice?

Mozilla set two specific goals: close 40 high-priority bugs and achieve performance within 20% of Chrome, leading to improved bug fixes and performance.

What is Management by Means (MBM)?

A systematic approach focusing on the methods and processes used to achieve goals, ensuring actions themselves support desired outcomes.

What are standing plans?

Policies and procedures that guide ongoing actions; example YouTube's policies for curbing extremist videos and reducing engagement with such content.

What is contingency planning?

Developing multiple future alternatives and responses to emergencies or high-impact contingencies (e.g., layoffs, emergency budgets, new markets).

What is scenario building?

A forecasting technique that looks at current trends and discontinuities to imagine future possibilities and develop 2–5 scenarios to guide strategy.

What is crisis planning?

Preparing for sudden, catastrophic events with a crisis management team, a spokesperson, and a detailed crisis management plan (CMP).

What is a crisis management team and a crisis management plan (CMP)?

A cross-functional team designated to respond to crises; the CMP is a written plan detailing steps and roles that must be updated regularly.

What are stretch goals and BHAGs (Big Hairy Audacious Goals)?

Stretch goals are ambitious and clear targets; BHAGs are audacious, big, potentially transformative goals that still need to be achievable.

What are Porter's three generic strategies for business-level strategy?

Differentiation, Cost leadership, and Focus (with focus either on differentiation or cost leadership for a narrow market).

What is the BCG matrix and its four categories?

A portfolio tool with four categories: Star, Cash Cow, Question Mark (Bright Prospect), and Dog.

What is SWOT analysis and what does it evaluate?

Internal strengths and weaknesses, and external opportunities and threats to guide strategy (e.g., Kroger's internal and external assessments).

What is diversification and what are common forms?

Expanding into new lines of business through mergers, acquisitions, or joint ventures, including related diversification.

What is portfolio strategy and SBUs?

Managing a portfolio of strategic business units (SBUs) to balance risk and leverage synergies across businesses.

What is 'target customers' in strategy formulation?

Defining the customer segments and their needs that the firm intends to serve (e.g., Zipcar vs Hertz; Costco vs Sam’s Club).

What does 'exploit core competencies' mean in strategy?

Identify and leverage the organization's key strengths or capabilities that competitors cannot easily replicate.

What does 'deliver value' entail in strategy?

Providing a bundle of benefits to customers while managing costs to offer compelling value (e.g., bundled services from Charter Spectrum/Comcast, Amazon value proposition).

Why is strategic thinking important and what is its purpose?

Strategic thinking involves long-term, big-picture thinking about the organization and its environment to position for competitive advantage.

What is OKR and how does it relate to MBO?

OKR stands for Objectives and Key Results and is a goal-setting framework described as a contemporary approach to goal accomplishment that complements or alternatives to MBO.