QUIZ #1 ADMI 3009

Purposes of Goals

- provide guidance and a unified direction for people in the organization
- have a strong effect on the quality of other aspects of planning
- serve as a source of motivation for employees of the organization
- provide an effective mechanism for evaluatio

Mission Statement

a statement of the organization's fundamental purpose

Strategic Goals

set by top management, address broad competitive issues

Tactical Goals

set by and for middle managers, focus on the actions needed to achieve strategic goals

Operational Goals

set by lower-level managers, focus on actions in support of tactical goals

Strategic Plans

- are general plans outlining resource allocation, priorities, and action steps to achieve strategic goals
- are set by and for top managers

Tactical Plans

- are aimed at achieving the tactical goals set by and for middle management

Operational Plans

- have a short-term focus
- Are set by and for lower-level managers

The Time Dimension of Planning

planning must provide sufficient time to fulfill the managerial commitments involved

Strategy

a comprehensive plan for accomplishing an organization's goals

Strategic Management

the comprehensive and ongoing process of formulating and implementing strategies to approach business opportunities and challenges

Effective Strategies

promote a superior alignment between organization and environment and achievement of goals

The Components of Strategy

Distinctive Competence, Scope, Resource Deployment

Distinctive Competence

something an organization does exceptionally well

Scope

range of markets in which an organization will compete

Resource Deployment

how an organization will distribute its resources in areas in which it competes

Business-level Strategy

the strategic alternatives than an organization chooses from as it conducts business in an industry or a particular market

Corporate-level Strategy

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

SWOT Analysis: Evaluating Strengths

Organizational Strengths, Distinctive Competencies, Competitive Advantage

Organizational Strengths

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

Distinctive Competencies

strengths possessed by only a small number of competitors that are useful for competitive advantage and superior performance

Competitive Advantage

results from a firm exploiting its unique competencies to attain superior performance

Organizational Weaknesses

insufficiencies of skills and capabilities that limit an organization's choice of strategic actions in support of its mission

Ways to overcome weaknesses

- making investments to obtain the strengths needed
- modifying the organization's mission so it can be accomplished with the current workforce

Organizational Opportunities

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

Organizational Threats

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

Porter's Generic Strategies

Differentiation Strategy, Overall Cost Leadership Strategy, Focus Strategy

Differentiation Strategy

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

Overall Cost Leadership Strategy

attempting to gain competitive advantage by reducing overall costs below the cost of competing firms

Focus Strategy

concerning on a specific regional market, products line, or group of buyers

Product Life Cycle

- a model that shows sales volume changes over the life of products
- introduction stage, growth stage, mature stage, decline stage

Introduction stage

demand may be very high and sometimes outpaces the firm's ability to supply the product

Growth stage

more firms begin producing the product, and sales continue to grow

Mature stage

overall demand growth begins to slow down

Decline stage

demand for product decreases

Related Diversification

a strategy in which an organization operates in several different businesses, industries, or markets that are somehow linked

Bases of Relatedness in Implementing Related Diversification

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

Unrelated Diversified Organization

operates multiple businesses that are not logically associated with one another

Unrelated Diversified Organization Advantages

- stable corporate-level performance over time due to business cycle differences among the multiple businesses
- resources can be allocated to areas with the highest return potentials to maximize corporate performance

Unrelated Diversified Organization Disadvantages

- the strategy does not usually lead to high performance due to the complexity of managing a diversity of businesses
- firms with unrelated strategies fail to exploit important synergies, putting them at a competitive disadvantage to firms with related di

Portofolio Management Techniques

- are used to make decisions about what businesses to engage in and how to manage these multiple businesses to maximize corporate performance
- BCG (Boston Consulting Group) Matrix
- GE (General Electric) Business Screen

BCG Matrix

- evaluates businesses relative to the growth rate of their markets and their individual market shares
- classifies the types of businesses of a diversified organization's portfolio as: dogs, cash cows, question marks, stars

Dogs

having small market shares and no growth prospects

Cash Cows

having large shares of mature markets

Question marks

having small market shares in quickly growing markets

Stars

having large shares of rapidly growing markets

GE Business Screen

- evaluates firms in a diversified portfolio along two multi-factor dimensions: industry attractiveness and competitive position (strength) of portfolio firms
- shows where a firm should invest more of its resources in competitive business in attractive i

Contingency Planning

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

Crisis Management

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

Decision Making

the act of choosing one (the best) alternative from among a set of alternatives

Decision-Making Process

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

Programmed Decision

a decision that is relatively structured or recurs with some frequency (or both)

Nonprogrammed decisions

a decision that is relatively unstructured and occurs much less often than a programmed decision

Decision Making Under Certainty

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

Decision Making Under Risk

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

Decision Making Under Uncertainty

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

Behavioral Aspects of Decision Making

Bonded Rationality, Satisficing, Coalition, Intuition, Escalaion of Commitment, Risk Propensity

Bonded Rationality

the concept that decision makers are limited by their values and unconscious reflexes, skills, and habits

Satisficing

the tendency to search for alternatives only until one is found that meets some minimum standard of sufficiency to resolve the problem
� personal motives and biases
� expediency (degree of impact alternative choice will have)
� cost of continuing to searc

Coalition

a positive or negative political force in decision making which consists of an informal alliance of individuals or groups forms to achieve a goal

Intuition

an innate belief about something without conscious consideration

Escalation of Commitment

a decision maker's staying with a decision even when it appears to be wrong

Risk Propensity

the extent to which a decision maker is willing to gamble when making a

Managerial Ethics

individual ethics (personal beliefs about right and wrong behavior) combine with the organization's ethics to create managerial ethics

Components of Managerial Ethics

- relationships of the firm to employees
- employees to the firm
- the firm to other economic agents

Group and Team Decision Making

interacting groups or teamsn, delphi groups, nominal group

Interacting group or teams

consists of an existing group or newly formed team interacting and then making a decision

Delphi groups

developing a consensus of expert opinion from a panel of experts who individually contribute

Nominal groups

generating ideas through the individual contributions of alternatives that are winnowed down to reach a decision