Course Exercise Questions – Course Exercise Doc. (Part 3)
- How do the three elements of Globalization, Innovation, and Sustainability impact your understanding of Strategy?
- Organizational strategy can be divided roughly into two categories: a) formulation and b) implementation. While there is legitimate crossover between the two, how would you characterize the issues involved in each effort?
- What is meant by a hierarchy of strategy?
- What are the roles and responsibilities of an effective and active Board of Directors? What are the issues that suggest the need for oversight of a particular company’s management team?
- What recommendations would you make to improve the effectiveness of today’s boards of directors?
- How has moral relativism led to criminal activities by some employees in companies?
- Using Carroll’s list of four responsibilities, should a company be concerned about discretionaryresponsibilities? Why or why not?
- How does STEEP analysis aid in the development of the strategy in a company?
- Why is environmental uncertainty an important concept in strategic management?
- Explain how using an IFAS Table impacts the understanding of a company’s internal resources and capabilities.
- What kind of internal factors help managers determine whether a firm should emphasize the production and sales of a large number of low-priced products or a small number of high-priced products?
- Explain how our understanding of the three generic strategic approaches available to companies can be used to direct the efforts of all employees at those companies.
- What does a business have to consider when trying to follow a cost leadership strategy and a differentiation strategy simultaneously? Can you name a company doing this?
- How does horizontal growth differ from vertical growth as a corporate strategy? From concentric diversification?
- Compare and contrast a SWOT approach with portfolio analysis.
- What concepts or assumptions underlie the BCG growth-share matrix? Are these concepts valid? Why or why not?
- Should functional strategies be categorized under strategy formulation or under strategy implementation?
- How do timing tactics impact the strategy implementation efforts of a company?
- How can a corporation keep from sliding into the decline stage of the organizational life cycle?
- Does structure follow strategy or does strategy follow structure? Why?
- How can corporate culture be changed?
- Why is an understanding of national cultures important in strategic management?
Culture is extremely impacting and can result in the success or failure of a company.
- Why bother with shareholder value or a stakeholder scorecard? Isn’t it simpler to evaluate a corporation and its SBUs just by using standard measures like ROI or earnings per share? What are the pros and cons of using the strategic audit as a framework for case analysis?
- What are the pros and cons of using the strategic audit as a framework for case analysis.
- What ratios would you use to begin your analysis of a case? What are the five crucial steps to follow in basic financial analysis?
Five crucial steps to follow in a basic financial analysis are:
1 Globalization refers to the incorporated internationalization of businesses and markets. Strategic management is becoming essential as more businesses become global. Strategic management helps to keep track of the global expansions and positions a corporation for unending competitive gain. Innovation is intended to define new products, services, approaches, and organizational methods that would enable a business to attain resilient returns. Sustainability comprises corporate practices that center on the triple bottom line for a business. Each of these is a new frontier that influences how companies grow and implement policy.
2 There are four main strategic management phases. Phase 1 is the fundamental financial planning, followed by financial planning based on forecasting; phase 3 focuses on external strategic planning, while the last phase is strategic management. Phase 1, 2, and 3 are well-thought-out to be part of the formulation category (Ilic, & Milos 182). All these stages propose the necessity for scanning the internal and external environment and progress a strategy acclimatizing to estimates and forecasts. Besides, the last phase is concerned with the selections a business makes to implement the intended plan. In this stage, every individual across the business is enlisted to support the planned objectives.
3 The hierarchy of strategy refers to the interrelationship among three strategy levels that generally exist in large business companies. The three strategy levels include the corporate, business unit, and market-level strategy. Starting with the company level, every strategy level creates the strategic setting of the subsequent level in the company. Moreover, individual strategies are organized hierarchically and reasonably consistent at the level of metrics, mission, vision, and goals.
4 The board of directors directs the activities of the company rather than managing them. Moreover, the board of directors is accountable for effective leadership, organization planning, balancing risk and resourcefulness, succession organization, and sustainability. The role of the board is to accomplish several tasks such as monitoring, evaluating, influencing, initiating, and determining various tasks in a corporation.
The top management is held responsible by the board of directors, especially in implementing and guiding the established strategy. Several concerns would point out the need for management team oversight. These concerns include the failure of a corporate to meet the set objectives or express a clear vision. Besides, failure to monitor the strategic planning may necessitate an oversight.
5 Several strategies can enhance the board of directors’ effectiveness. Each member of the board and committee should be assigned a concrete objective to accomplish. Besides, the board should formulate policies and establish its strategic direction. The president of the board should not deal with all the tasks in an organization. Furthermore, the fundraising, administrative, and finance tasks should be dealt with effectively so that the objectives of a corporation can be achieved.
6 Moral relativism can result in immorality, and it vacates the difference between right and wrong. In an organization, this form can lead to unlawful activities when the workers become immoral. The extremist staffs put their view into the fact which is wrong for the organization. These individuals believe that no external power can judge their actions and hence engage in criminal activities. When moral relativism is well-thought-out, then the moral values of each person in an organization can be different. For instance, the corporate’s policy on smoking can be different from personal morals. Besides, an employee may believe that there should a right flow of information, but the company policies do not support this and hence creating a chance for criminal activities.
7 The four-part description of Corporate Social Responsibility by Carroll was initially termed as the economic, authorized, virtuous, and philanthropic anticipations that people have concerning establishments at a particular time. These four sets of responsibilities develop a basis that aids in delineating and characterizing the nature of business. A company should be concerned with discretionary activities since they are among the social obligations for strategic management. Besides, they are the highest principles for social responsibilities.
8 An organization or corporation cannot function as a closed system but always works as an open system. However, the open systems are at risk of the external environment. An organization operating in a certain industry and providing commodities to the community is open to governmental checks. Thus, corporations need to ascertain the external trend. This trend will help in developing future strategies and how to halt the effects of a negative impact on their corporation. Furthermore, STEEP analysis supports and informs the team on how to change certain aspects in favor of the company.
9 Environmental uncertainty is an essential concept in strategic management. Environmental uncertainty refers to a state where the conditions frequently change in a business environment. Therefore the management has little control over these aspects, which are outside the corporation’s control. A low level of uncertainty helps a company to predict future circumstances, for instance, the demand for a certain product. Moreover, high uncertainty makes it challenging for a company to make decisions. Environmental uncertainties aid a company to control costs and diversify risks.
10 Internal Factor Analysis Summaries Table organizes the internal aspects into strengths and weaknesses. Moreover, it analyses how well the management of a company responds to the internal factors in the light of the perceived significance of these aspects to the company. The IFAS table helps in recording the qualities and the weaknesses of an organization.
11 Several internal factors determine the production and sales of a commodity. For instance, resilient market research may ascertain the types of niches accessible to the products or services under deliberation. Financially, the production of large amounts of low-prized goods recommends an enormous capital intensive manufacturing facility. It is also essential to consider producing a less amount of high-quality goods using less capital since the required manufacturing facilities may be minimal, and utilizing craft labor is vital as well. To produce high-quality commodities, a reasonably refined R&D effort may be required. Costly engineering staff may be required. Besides, untrained and low-paid employees cannot be anticipated to produce high-quality goods on old-line machines and vice versa.
12 Understanding the three generic strategy approaches is essential as it helps the employees in a firm to understand the kind of strategy in use. Moreover, this helps in implementing the strategy successfully. For instance, if a firm uses cost leadership and the workers are not familiar with it, there is a probability they will not adhere to it.
13 When a corporation wants to consider using cost leadership and differentiation strategy such as McDonald’s, it needs to plan a dual strategy. The dual strategy will aid in pricing the products according to the market so that they can be in cost headship. The corporation will also identify some add-ons or services they can provide concurrently to distinguish themselves in the market.
14 Horizontal growth is different from vertical growth in several ways. Horizontal growth deals with developing a business. These developments can be introducing a new commodity or expanding into another location. Vertical growth is a situation where a firm takes over a function formerly accomplished by a distributor or supplier.
15 Both SWOT and portfolio analysis ascertains the strategic aspects that rely on the achievement of the organization. Besides, SWOT deals with identifying the strengths, weaknesses, and prospects and threats. Portfolio analysis, on the other hand, deals with examining internal and external influences in affirm.
16 Certain assumptions are that the Return on Investment will be more significant in an instance where there is a higher market share. Every part of the portfolio is balanced in terms of the resources they have. Likewise, resources return changing aspects are similar for every part of the portfolio. Some of these ideas are valid, whereas others are not. For instance, one of the states that a firm can distribute resources, but the manpower resources cannot be distributed in that manner.
17 Strategic formulation refers to the activities that relate to one functional area only. Strategy implementation, on the other hand, is managing forces throughout the action. They should not be in the same category since one must be accomplished before the other begins.
18 Timing tactics influence the efforts of implementation in numerous ways. The earlier a corporation gets into the market before other companies, the easier it would be for it to establish its name and implement its plan.
19 For a company to avoid going into a decline stage, it has to move to the revival stage. In this stage, they can launch a new product or change the older commodities. Moreover, the company can obtain new resources or establishments through purchases.
20 The strategy follows structure since the structure is solely determined by strategy. Moreover, if the strategy changes, the structure would also change for it to be effective.
21 There are several ways that a corporate can change its culture. First, the corporate needs to be devoted to the change, especially the top level of management. This commitment ensures that change occurs in the entire company. Furthermore, everyone in the company should be informed about cultural change. The new culture also needs to be part of the corporation’s strategic vision.
22 Understanding the national cultures is significant in strategic management since, in today’s world, every company appears to be developing internationally. The success of strategic planning heavily depends on having adequate information about the national culture.
23 The shareholder value and stakeholder scorecards are essential for strategic management success. Shareholder value aids the management to ascertain where it can get the greatness gains during investment. The stakeholder’s scorecard brings organization to corporate strategy. Yes, it is simpler to examine a company and its SBU’s through the standard measures like ROI or incomes per share.
24 The advantage of using the strategic audit as a basis for case analysis is that accurate controls will be implemented that will aid in achieving the company’s anticipated goals. The strategic audit reduces the risk of failure as it appraises everything in auditing the various aspects. However, the disadvantage of using strategic audit is that it is not flexible.
25 There are five steps to follow in basic financial analysis. The first step is examining past data. The most important financial ratios to consider are liquidity ratios, activity ratios, leverage ratios, and profitability ratios. The second step is comparing historical data. The third step involves the calculation of changes. The fourth step is determining the change in percentage. Finally, the fifth step involves adjustments for inflation if indispensable.
Works Cited.
Ilic, Biljana, and Milos Nikolic. “Management innovation of products and services in strategic management.” Economic and Social Development: Book of Proceedings (2019): 179-189.
