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1-1
STRATEGIC MANAGEMENT & BUSINESS POLICY10TH EDITION
THOMAS L. WHEELEN J. DAVID HUNGER
CHAPTER 1 Basic Concepts of Strategic Management
1-2
Basic Concepts of Strategic Management
GlobalizationInternationalization of markets and corporations
Global (worldwide) markets rather than national markets
Electronic CommerceUse of the Internet to conduct business transactions
Basis for competition on a more strategic level rather than traditional focus on product features and costs
1-3
Basic Concepts of Strategic Management
Electronic Commerce -- Trends
• Forcing company transformation• Market access & branding changing –
disintermediation of traditional distribution channels
• Balance of power shift to consumer• Competition changing
1-4
Basic Concepts of Strategic Management
Electronic Commerce -- Trends
• Pace of business increasing • Internet purchasing beyond traditional
boundaries• Knowledge key asset – source of
competitive advantage
1-5
Strategic Management Defined
Set of managerial decisions and actions that determines the long-run performance of a firm.
1-6
Basic Concepts of Strategic Management
4 Phases of Strategic Management
1. Basic financial planning2. Forecast-based planning3. Externally-oriented planning4. Strategic management
1-7
Basic Concepts of Strategic Management
Highly Rated Benefits
• Clearer sense of strategic vision• Sharper focus on strategic importance• Improved understanding of changing
environment
1-8
Basic Concepts of Strategic Management
Not Always a Formal Process
• Where is the organization now? (not where do we hope it is)
• If no changes are made, where will the organization be in 1,2,5 or 10 years?
• What specific actions should management undertake?
• What are the risks and payoffs?
1-9
Basic Concepts of Strategic Management
Basic Elements of the Strategic Management Process
1-10
Environmental Scanning Defined
Monitoring, evaluation, and disseminating information from external and internal environments –to key people in the firm
1-11
Basic Concepts of Strategic Management
Environmental Variables
1-12
Environmental Scanning
SWOT Analysis
• Strengths – Weaknesses
• Opportunities - Threats
1-13
Strategy Formulation
Development of long-range plans for effective management of opportunities and threats in light of corporate strengths and weaknesses
1-14
Strategy Formulation
Mission Statement
• Purpose/reason for organization• Promotes shared expectations• Communicates public image• Who we are; what we do; what we
aspire to
1-15
Organizational Adaptation
Organization “fit” with environment
• Theory of population ecology• Institution theory• Strategic choice perspective• Organizational learning theory
1-16
Organizational Adaptation
Strategic flexibility
• Demands long-term commitment to development of critical resources
• Demands firm become a learning organization
1-17
Learning Organizations
An organization skilled at creating, acquiring, and transferring knowledge and at modifying its behavior to reflect new knowledge and insights
1-18
Learning Organizations
4 Chief Activities
• Systematic problem solving• New approach experimentation• Learning from experiences• Intra-organization knowledge transfer
1-19
Basic Concepts of Strategic Management
Hierarchy of Strategy
1-20
Goals & Objectives
Corporate Goals/Objectives
–Profitability (net profit)–Growth–Resource utilization (ROE, ROI)–Market leadership
1-21
Basic Concepts of Strategic Management
3 Types of Strategy
–Corporate strategy
–Business strategy
–Functional strategy
1-22
Basic Concepts of Strategic Management
Corporate Strategy
–Stability–Growth–Retrenchment
1-23
Basic Concepts of Strategic Management
Business Strategy
–Competitive strategies
–Cooperative strategies
1-24
Basic Concepts of Strategic Management
Functional Strategy
–Technological leadership
–Technological followership
1-25
Basic Concepts of Strategic Management
Strategic Decision-Making
Process
1-26
Strategic Decision Making
Strategic Decisions
–Rare
–Consequential
–Directive
1-27
Strategic Decision Making
Mintzberg’s Modes
–Entrepreneurial mode–Adaptive mode–Planning mode–Logical incrementalism
1-28
Hambrick and Fredrickson – Good Strategy
5 Elements of Good Strategy
1. Arenas2. Vehicles3. Differentiators4. Staging5. Economic logic
1-29
CHAPTER 2 Corporate Governance
1-30
STRATEGIC MANAGEMENT & BUSINESS POLICY10TH EDITION
THOMAS L. WHEELEN J. DAVID HUNGER
CHAPTER 2 Corporate Governance
1-31
Corporate Governance
1-32
Corporate Governance
The relationship among the board of directors, top management, and shareholders – determining the direction and performance of the corporation
1-33
Corporate Governance
Role of Board
–Monitor
–Evaluate and influence
–Initiate and determine
1-34
Board of Directors Continuum
1-35
Board of Directors
Members --
–Inside directors•“management directors”•Officers or execs employed by the firm
–Outside directors•“non-management directors”•Execs of other firms not employed by the board’s corporation
1-36
Agency Theory
Agency Problem ––Objectives of owners & agents in conflict–Difficult for owners to verify agent performance
Risk Sharing Problem ––Owners & agents risk assessment in conflict
1-37
Stewardship Theory
Executives more motivated to act in best interest of the corporation than their own self-interests. Theory that over time, senior executives tend to view corporation as extension of selves.
1-38
Board of Directors
When Outsiders can be considered Insiders
–Affiliated Directors–Retired Directors–Family Directors
1-39
Board of Directors
Codetermination
–The inclusion of a corporation’s employees on its board of directors
1-40
Board of Directors
Interlocking Directorates
–Direct Interlocking
–Indirect Interlocking
1-41
Board of Directors
Nominations & Elections
–Traditional Approach•CEO invitation to membership•Shareholders approval in annual proxy statement•All nominees usually elected
1-42
Board of Directors
Nominations & Elections
–Staggered Board Approach•Staggered terms of service/election
1-43
Board of Directors
Sarbanes-Oxley
–Code of Ethics
–Audit, Nominating, and Compensation Committees all outside directors
1-44
Board of Directors
Organization of the Board
–Size
•Charter & Bylaws Determination
1-45
Board of Directors
Corporate Governance
–Review & shaping of strategy–Pressure for corporate performance–Demand for executive stock ownership–Outside directors increasing–Impact of Sarbanes-Oxley
1-46
Board of Directors
Transformational leaders
–Change agents through vision for change
1-47
Board of Directors
Successful CEO’s
–Strategic vision–Passion for the company–Strong communication–charisma
1-48
Board of Directors
Executive Leadership
–Strategic vision–Role model
1-49
Board of Directors
Executive Leadership
–Communication of performance standards–Demonstrates confidence in abilities of followers
1-50
Strategic Management Process
Strategic Planning Staff
–Supports top management & business units in the strategic planning process
1-51
Strategic Management Process
Strategic Planning Staff
–Identify & analyze company-wide strategic issues–Generate strategic alternatives
1-52
Strategic Management Process
Strategic Planning Staff
–Facilitate business units in coordinating activities related to strategic planning process
1-53
CHAPTER 3 Ethics & Social Responsibility
1-54
STRATEGIC MANAGEMENT & BUSINESS POLICY10TH EDITION
THOMAS L. WHEELEN J. DAVID HUNGER
CHAPTER 3 Ethics & Social Responsibility
1-55
Ethics & Social Responsibility
1-56
Corporate Governance
Broader responsibility --
Private corporations have responsibility to society that extend beyond making a profit
1-57
Social Responsibility
There is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.
Milton Friedman
1-58
Corporate Governance
Carroll’s 4 Responsibilities
–Economic–Legal–Ethical–Discretionary
1-59
Carroll’s 4 Responsibilities
1-60
Corporate Stakeholders
Affect or are affected by the achievement of the corporation’s objectives
1-61
Corporate Stakeholders
Stakeholder Analysis –
–Primary stakeholder•Sufficient bargaining power to affect outcomes
–Secondary stakeholder•Indirect stake but are affected by corporation’s actions
–Stakeholder Input•Determine whether input is necessary
1-62
Ethical Behavior
“business ethics”
–Argument that there is no such thing … it is an oxymoron
1-63
Ethical Decision Making
Corporate practices --
–Massive write-downs and restatements of profit–Misclassification of expenses as capital expenditures–Pirating corporate assets for personal gain
1-64
Ethical Decision Making
Recent Survey Results --
–70% distrust business executives–Enron–WorldCom
1-65
Reasons for Unethical Behavior
Provocative Question --
–Why are businesspeople perceived to be acting unethically?
1-66
Reasons for Unethical Behavior
Perceptions caused by --
–Not aware of impropriety–Cultural norms and values vary–Governance systems based on rule or relationships–Differences in values between businesspeople and key stakeholders
1-67
Reasons for Unethical Behavior
Allport-Vernon-Lindzey Study of Values --
–Aesthetic–Economic–Political–Religious–Social–Theoretical
1-68
Reasons for Unethical Behavior
Most common reasons for bending rules --
–Organizational performance required it–Ambiguous or out of date rules–Pressure from others – everyone else does it
1-69
Moral Relativism
Morality is relative to some personal, social, or cultural standard and there is no method for deciding whether one decision is better than another.
1-70
Kohlberg’s Levels of Moral Development
1. Preconventional level
–Characterized by a concern for self•Personal interest•Avoidance of punishment
1-71
Kohlberg’s Levels of Moral Development
2. Conventional level
–Characterized consideration of society’s values•External code of conduct
1-72
Kohlberg’s Levels of Moral Development
3. Principled level
–Characterized by adherence to internal moral code
•Universal values or principles
1-73
Encouraging Ethical Behavior
Codes of Ethics
–Specifies how an organization expects its employees to behave on the job.
1-74
Encouraging Ethical Behavior
Guidelines for Ethical Behavior
–Ethics
–Morality
–Law
1-75
Encouraging Ethical Behavior
Approaches to Ethical Behavior
–Utilitarian•Judged by consequences
–Individual Rights•Fundamental rights in all decisions
–Justice•Distribution in equitable fashion
1-76
Encouraging Ethical Behavior
Approaches to Ethical Behavior
–Categorical imperative•“golden rule”•Means - Ends
1-77
Strategy Bits
192 U.S. companies surveyed --
–92% monitored employees use of e-mail/Internet
–26% monitored employees electronic activities all the time
–Almost none had checks in place to protect employees privacy
1-78
CHAPTER 4 Environmental Scanning and Industry Analysis
1-79
STRATEGIC MANAGEMENT & BUSINESS POLICY10TH EDITION
THOMAS L. WHEELEN J. DAVID HUNGER
CHAPTER 4 Environmental Scanning and Industry Analysis
1-80
Environmental Scanning
Societal environment --
–Economic forces–Technological forces–Political-legal forces–Sociocultural forces
1-81
Societal Environment
Economic Forces --
–Regulate exchange of materials, money, energy and information
1-82
Societal Environment
Technological Forces --
–Generate problem-solving inventions
1-83
Societal Environment
Political-legal Forces --
–Allocate power; provide laws and regulations
1-84
Societal Environment
Sociocultural Forces --
–Regulate values, mores, and customs of society
1-85
Task Environment
Task environment --
–Elements or groups that directly affect a corporation and are affected by it
1-86
Task Environment
Industry Analysis --
–In-depth examination of key factors within a corporation’s task environment
1-87
Variables in Societal Environment
1-88
Demographic Trends
1-89
Transformational Sociocultural Trends
8 Current Trends –
–Increasing environmental awareness–Growing health consciousness–Expanding seniors market–Impact of the Generation Y boomlet–Declining mass market–Changing pace and location of life–Changing household composition–Increasing diversity of workforce & market
1-90
International Societal Environments
1-91
Scanning the Task Environment
1-92
Ethical Behavior
“business ethics”
–Argument that there is no such thing … it is an oxymoron
1-93
Ethical Decision Making
Corporate practices --
–Massive write-downs and restatements of profit–Misclassification of expenses as capital expenditures–Pirating corporate assets for personal gain
1-94
External Strategic Factors
Strategic myopia --
–Willingness to reject unfamiliar as well as negative information
1-95
Issues Priority Matrix
1-96
Analyzing the Task Environment
1-97
Porter’s Approach to Industry Analysis
Threat of New Entrants –
–Economies of scale–Product differentiation–Capital requirements–Switching costs–Access to distribution channels–Cost disadvantages–Government policy
1-98
Porter’s Approach to Industry Analysis
Rivalry Among Existing Firms –
–Number of competitors–Rate of industry growth–Product or service characteristics–Amount of fixed costs–Capacity–Height of exit barriers–Diversity of rivals
1-99
Porter’s Approach to Industry Analysis
•Threat of Substitute Products or Services
•Bargaining Power of Buyers
•Bargaining Power of Suppliers
•Relative Power of Other Stakeholders
1-100
Industry Evolution
Fragmented Industry –
–No dominant industry
1-101
Industry Evolution
Consolidated Industry –
–Dominated by a few large firms
1-102
International Risk Assessment
Continuum of International Industries
1-103
Strategic Groups
1-104
Strategic Types
•Defenders•Prospectors•Analyzers•Reactors
General Types –
1-105
Competitive Intelligence
Called business intelligence
Gathering information on a company’s competitors
1-106
Forecasting
Forecasting Techniques --
–Extrapolation–Brainstorming–Expert opinion–Delphi technique–Statistical modeling–Scenario writing
1-107
Synthesis of External Factors -- EFAS
1-108
CHAPTER 5Internal Scanning: Organizational Analysis
1-109
STRATEGIC MANAGEMENT & BUSINESS POLICY10TH EDITION
THOMAS L. WHEELEN J. DAVID HUNGER
CHAPTER 5Internal Scanning: Organizational Analysis
1-110
Resource-Based Approach to Organizational Analysis
Internal strategic factors --
–Critical strengths and weaknesses that are likely to determine if the firm will be able to take advantage of opportunities while avoiding threats
1-111
Resource-Based Approach to Organizational Analysis
•Resources
•Capabilities
•Competency
•Core competency
•Distinctive competency
1-112
Core and Distinctive Competencies
VRIO Framework --
–Value
–Rareness
–Imitability
–Organization
1-113
Resource-Based Approach to Organizational Analysis
5-Step Approach Strategy Analysis --
1. Identify and classify resources2. Combine strengths into capabilities3. Appraise profit potential of capabilities4. Select strategy that best exploits 5. Identify resource gaps invest in weaknesses
1-114
Continuum of Sustainability
1-115
Sustainability of Advantage
Durability --
–Rate at which a firm’s underlying resources and capabilities depreciate or become obsolete
1-116
Sustainability of Advantage
Imitability --
–Rate at which a firm’s underlying resources and capabilities can be duplicated by others
1-117
Sustainability of Advantage
Core Competency can be imitated --
–Transparency–Transferability–Replicability
1-118
Business Models
Company’s method for making money in the current business environment.
1-119
Business Models
Types of Models --
–Customer Solutions Model–Profit Pyramid Model–Multi-Component System/Installed Base Model–Advertising Model–Switchboard Model
1-120
Business Models
Types of Models --
–Time Model–Efficiency Model–Blockbuster Model–Profit Multiplier Model–Entrepreneurial Model–De Facto Standard Model
1-121
Value-Chain Analysis
Linked set of value-creating activities beginning with basic raw material and ending with distributors getting final goods into hands of customers
1-122
Value-Chain Analysis
Typical Value Chain for a Manufactured Product
1-123
Corporate Value-Chain Analysis
•Primary activities
•Support activities
1-124
Corporation’s Value Chain
1-125
Scanning Functional Resources & Capabilities
Basic Organizational Structures --
–Simple structure–Functional structure–Divisional structure–Strategic business units (SBU’s)–Conglomerate structure
1-126
Basic Organizational Structures
1-127
Corporate Culture
Collection of beliefs, expectations, and values learned and shared by a corporation’s members and transmitted from one generation of employees to another
1-128
Strategic Marketing Issues
–Market Position & Segmentation–Marketing Mix–Product Life Cycle–Brand & Corporate Reputation
1-129
Product Life Cycle
1-130
Strategic Financial Issues
–Financial leverage
–Capital budgeting
1-131
Strategic Research & Development Issues
–R&D Intensity
–Technological Competence
–Technology Transfer
1-132
Technological Discontinuity
1-133
Strategic Human Resource Management Issues
HRM –
–Increasing use of teams–Union relations –Temporary workers–Quality of work life–Human diversity
1-134
Internal Factor Analysis Summary Table
1-135
CHAPTER 6Strategy Formulation: Situation Analysis & Business Strategy
1-136
STRATEGIC MANAGEMENT & BUSINESS POLICY10TH EDITION
THOMAS L. WHEELEN J. DAVID HUNGER
CHAPTER 6Strategy Formulation: Situation Analysis & Business Strategy
1-137
Situational Analysis
Strategy formulation --
–Strategic planning or long-range planning•Develops mission, objectives, strategies, policies
1-138
Situational Analysis
--process of finding a strategic fit between external opportunities and internal strengths while working around external threats and internal weaknesses
1-139
IFAS – Maytag as Example
1-140
EFAS – Maytag as Example
1-141
SFAS Matrix
1-142
Situational Analysis
Niche --
–Need in the marketplace that is currently unsatisfied
1-143
Situational Analysis
Corporate Goal --
–Find propitious niche–Strategic window
1-144
Situational Analysis
SWOT --
–Internal•Strengths/Weaknesses
–External•Opportunities/Threats
1-145
TOWS Matrix
1-146
Business Strategy
Focuses on improving competitive position of company’s products or services within the specific industry or market segment
1-147
Porter’s Competitive Strategies
Competitive Strategy --
–Low cost–Differentiation–Direct competition–Focus on niche
1-148
Porter’s Competitive Strategies
Generic Competitive Strategies --
–Lower Cost strategy•Greater efficiencies than competitors
–Differentiation strategy•Unique/superior value, quality, features, service
1-149
Porter’s Competitive Strategies
Competitive Advantage --
–Determined by Competitive Scope•Breadth of the target market
1-150
Porter’s Competitive Strategies
1-151
Porter’s Competitive Strategies
Cost Leadership --
–Low-cost competitive strategy–Broad mass market–Efficient-scale facilities–Cost reductions–Cost minimization
1-152
Porter’s Competitive Strategies
Differentiation –
–Broad mass market–Unique product/service–Premiums charged–Less price sensitivity
1-153
Porter’s Competitive Strategies
Cost-Focus –
–Low-cost competitive strategy–Focus on market segment–Niche focused–Cost advantage in market segment
1-154
Porter’s Competitive Strategies
Differentiation Focus –
–Specific group or geographic market focus–Differentiation in target market–Special needs of narrow target market
1-155
Porter’s Competitive Strategies
Stuck in the middle –
–No competitive advantage–Below-average performance
1-156
Risks of Generic Strategies
Risks of Cost LeadershipCost leadership is not sustained:• Competitors imitate.• Technology changes.• Other bases for cost leadership erode.Proximity in differentiation is lost.Cost focusers achieve even lower cost in segments.
Risks of DifferentiationDifferentiation is not sustained:• Competitors imitate.• Bases for differentiation become less important to buyers.Cost proximity is lost.Differentiation focusers achieve even greater differentiation in segments.
Risks of FocusThe focus strategy is imitated:The target segment becomes structurally unattractive:• Structure erodes.• Demand disappears.Broadly targeted competitors overwhelm the segment:• The segment’s differences from other segments narrow.• The advantages of a broad line increase.New focusers subsegment the industry.
Risks of Cost LeadershipCost leadership is not sustained:• Competitors imitate.• Technology changes.• Other bases for cost leadership erode.Proximity in differentiation is lost.Cost focusers achieve even lower cost in segments.
Risks of DifferentiationDifferentiation is not sustained:• Competitors imitate.• Bases for differentiation become less important to buyers.Cost proximity is lost.Differentiation focusers achieve even greater differentiation in segments.
Risks of FocusThe focus strategy is imitated:The target segment becomes structurally unattractive:• Structure erodes.• Demand disappears.Broadly targeted competitors overwhelm the segment:• The segment’s differences from other segments narrow.• The advantages of a broad line increase.New focusers subsegment the industry.
1-157
8 Dimensions of Quality
1-158
Competitive Strategy
Industry Structure --
–Fragmented Industry–Consolidated Industry
1-159
Competitive Tactics
Timing Tactics --
–First mover–Late movers
1-160
Competitive Tactics
Market Location Tactics --
–Frontal Assault–Flanking Maneuver–Bypass Attack–Encirclement–Guerrilla Warfare
1-161
Competitive Tactics
Defensive Tactics --
–Raise structural barriers–Increase expected retaliation–Lower the inducement for attack
1-162
Cooperative Strategies
•Collusion•Strategic Alliances•Mutual service consortia•Joint ventures•Licensing arrangements•Value-chain partnerships
1-163
CHAPTER 7 Strategy Formulation: Corporate Strategy
1-164
STRATEGIC MANAGEMENT & BUSINESS POLICY10TH EDITION
THOMAS L. WHEELEN J. DAVID HUNGER
CHAPTER 7 Strategy Formulation: Corporate Strategy
1-165
Corporate Strategy
3 Key Issues –
–Firm’s directional strategy
–Firm’s portfolio strategy
–Firm’s parenting strategy
1-166
Corporate Directional Strategies
1-167
Corporate Strategy
Directional Strategy –
–Orientation toward growth•Expansion, contraction, status quo•Concentration or diversification•Internal development or acquisitions, mergers, or alliances
1-168
Corporate Strategy
Directional Strategy –
–3 Grand Strategies
•Growth strategies
•Stability strategies
•Retrenchment strategies
1-169
Corporate Strategy
Growth Strategies --
–External mechanisms
•Mergers
•Acquisitions
•Strategic alliances
1-170
Corporate Strategy
Growth Strategies --
–2 Basic forms
•Concentration
•Diversification
1-171
Corporate Strategy
Basic Concentration Strategies --
–Vertical growth
–Horizontal growth
1-172
Corporate Strategy
Vertical Growth --
–Vertical integration•Full integration•Taper integration•Quasi-integration•Long-term contract
1-173
Corporate Strategy
Vertical Growth --
–Backward integration
–Forward integration
1-174
Corporate Strategy
Concentration --
–Horizontal Growth•Horizontal integration
1-175
Corporate Strategy
Basic Diversification Strategies --
–Concentric Diversification
–Conglomerate Diversification
1-176
Corporate Strategy
Concentric Diversification --
–Growth into related industry–Search for synergies
1-177
Corporate Strategy
Conglomerate diversification --
–Growth into unrelated industry–Concern with financial considerations
1-178
Corporate Strategy
International Entry Options --
–Exporting–Licensing–Franchising–Joint Ventures–Acquisitions–Green-Field Development
1-179
Corporate Strategy
International Entry Options --
–Production Sharing–Turnkey Operation–BOT Concept (Build, Operate, Transfer)–Management Contracts
1-180
Corporate Strategy
Stability Strategies --
–Pause/proceed with caution
–No change
–Profit strategies
1-181
Corporate Strategy
Retrenchment Strategies --
–Turnaround–Captive Company Strategy–Selling out–Bankruptcy–Liquidation
1-182
Corporate Strategy
Portfolio Analysis --
–Resource commitment on best products to ensure continued success
–Resource commitment on new costly products high risk
1-183
BCG Matrix (Portfolio Analysis)
1-184
GE Business Screen (Portfolio Analysis)
AWinners Winners
B
C
Question Marks
D
F
Average Businesses
EWinners
Losers
GLosers H
LosersProfit
Producers
Strong Average Weak
Low
Medium
High
Business Strength/Competitive Position
Indu
stry
Att
ract
ive
ness
1-185
Corporate Strategy
Corporate Parenting Strategy --
–Strategic factors–performance improvement–Analyze fit
1-186
CHAPTER 8 Strategy Formulation: Functional Strategy & Strategic Choice
1-187
STRATEGIC MANAGEMENT & BUSINESS POLICY10TH EDITION
THOMAS L. WHEELEN J. DAVID HUNGER
CHAPTER 8 Strategy Formulation: Functional Strategy & Strategic Choice
1-188
Functional Strategy
The approach a functional area takes to achieve corporate and business unit objectives and strategies by maximizing resource productivity
1-189
Functional Strategy
Marketing Strategy –
–Pricing–Selling–Distribution
1-190
Functional Strategy
Marketing Strategy –
–Product development•Line extension
1-191
Functional Strategy
Marketing Strategy –
–Advertising and promotion•Push strategy•Pull strategy
1-192
Functional Strategy
Marketing Strategy –
–Pricing•Skim pricing•Penetration pricing•Dynamic pricing
1-193
Functional Strategy
Financial Strategy –
–Leveraged buyout–Reversed stock split–Tracking stock
1-194
Functional Strategy
R&D Strategy –
–Technological leader–Technological follower–Open innovation
1-195
Functional Strategy
Operations Strategy –
–Job shop–Connected line batch flow–Flexible manufacturing systems–Dedicated transfer lines–Mass production–Continuous improvement system–Modular manufacturing
1-196
Functional Strategy
Purchasing Strategy –
–Multiple sourcing–Sole sourcing–Just-in-time (JIT)–Parallel sourcing
1-197
Functional Strategy
Logistics Strategy –
–Centralization–Outsourcing–Internet
1-198
Functional Strategy
HRM Strategy –
–360 degree appraisal
1-199
Functional Strategy
Outsourcing errors –
–Activities that should not be outsourced–Wrong vendor selection–Writing poor contract–Overlooking personnel issues–Hidden costs of outsourcing–Failing to plan exit strategy
1-200
Proposed Outsourcing Matrix
1-201
Functional Strategy
Strategies to Avoid –
–3 Follow the leader–Hit another home run–Arms race–Do everything–Losing hand
1-202
Corporate Strategy
Growth Strategies --
–External mechanisms
•Mergers
•Acquisitions
•Strategic alliances
1-203
Constructing Corporate Scenarios
1-204
Functional Strategy
Subjective Factors Affecting Decisions --
–Management’s attitude toward risk–Pressures from stakeholders–Pressures from corporate culture–Needs and desires of key managers
1-205
Stakeholder Priority Matrix
1-206
Strategic Choice
Avoiding the Consensus Trap --
–Devil’s Advocate
–Dialectical Inquiry
1-207
Strategic Choice
Evaluation of Strategic Alternatives --
–Mutual exclusivity–Success–Completeness–Internal consistency
1-208
CHAPTER 9 Strategy Implementation: Organizing for Action
1-209
STRATEGIC MANAGEMENT & BUSINESS POLICY10TH EDITION
THOMAS L. WHEELEN J. DAVID HUNGER
CHAPTER 9 Strategy Implementation: Organizing for Action
1-210
Strategy Implementation
--Sum total of activities & choices required for strategic plan execution
--Strategy implementation through programs, budgets, and procedures
1-211
Strategy Implementation
Key Implementation Questions –
–Who carries out strategic plan?–What needs doing for alignment w/ strategy?–How is work coordinated?
1-212
Strategy Implementation
Programs –
–Action oriented
–Matrix of change•Feasibility•Sequence of execution•Location•Pace & nature of change•Stakeholder evaluations
1-213
The Matrix of Change
1-214
Strategy Implementation
Achieving Synergy –
–Shared know-how–Coordinated strategies–Shared tangible resources
1-215
Strategy Implementation
Achieving Synergy –
–Economies of scale or scope–Pooled negotiating power–New business creation
1-216
Strategy Implementation
Structure follows strategy –
–New strategy is created–New administrative problems emerge–Economic performance declines–New appropriate structure is invented–Profit returns to previous level
1-217
Strategy Implementation
Stages of Corporate Development –
–Stage I: Simple structure–Stage II: Functional structure–Stage III: Divisional structure–Stage IV: Beyond SBU’s
1-218
Strategy Implementation
Blocks to Changing Stages –
–Loyalty to comrades–Task oriented–Single-mindedness–Working in isolation
1-219
Organizational Life Cycle
1-220
Changing Structural Characteristics of Modern Organizations
1-221
Strategy Implementation
Advanced Types of Organizational Structures –
–Matrix•Temporary cross-functional task forces•Product/brand management•Mature matrix
1-222
Strategy Implementation
Advanced Types of Organizational Structures –
–Network structure (virtual organization)
–Cellular organization
1-223
Network Structure
1-224
Strategy Implementation
Six Sigma –
–Define–Measure–Analyze–Improve–Establish
1-225
Strategy Implementation
Job design to implement strategy –
–Job enlargement–Job rotation–Job enrichment–Job characteristics model
1-226
Strategy Implementation
International Issues –
–MNC’s–International Strategic Alliances
1-227
Strategy Implementation
International Development Stages–
–Domestic company–Domestic company w/export division–Domestic company w/int’l division–MNC w/multidomestic emphasis–MNC w/global emphasis
1-228
Strategy Implementation
Centralization vs. Decentralization–
–Product-group structure–Geographic-area structure
1-229
Geographic Area Structure
1-230