Characteristics of Strategic Thinking
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Questions and Answers

Functional-level strategies are primarily concerned with managing corporate-level resources.

False (B)

At the business level, firms focus on creating competitive advantage in product market domains within each strategic business unit (SBU).

True (A)

The corporate-level strategy involves questions regarding the firm's capabilities and potential for creating value in new business areas.

True (A)

The SBU is defined as the overall corporate identity that encompasses all business units.

<p>False (B)</p> Signup and view all the answers

Functional-level strategies aim to maintain competitive advantage through constant innovation and high customer satisfaction.

<p>True (A)</p> Signup and view all the answers

A strategic thinker is opportunistic and focused on the past only.

<p>False (B)</p> Signup and view all the answers

The concept of strategy involves assessing both internal and external factors affecting a firm.

<p>True (A)</p> Signup and view all the answers

A situation analysis only focuses on the external environment of an organization.

<p>False (B)</p> Signup and view all the answers

Human resources refer to the monetary resources from which a firm can draw.

<p>False (B)</p> Signup and view all the answers

The establishment of strategic direction can be reflected in mission statements and organizational visions.

<p>True (A)</p> Signup and view all the answers

Comprehensive master plans are not necessary for maximizing competitive advantage.

<p>False (B)</p> Signup and view all the answers

Organizational knowledge and learning are not considered part of an organization's internal environment.

<p>False (B)</p> Signup and view all the answers

Strategy formulation includes designing organizational structures and managing stakeholder relationships.

<p>True (A)</p> Signup and view all the answers

General organizational resources include patents and relationships with external stakeholders.

<p>True (A)</p> Signup and view all the answers

The external environment does not significantly influence an organization.

<p>False (B)</p> Signup and view all the answers

Financial intermediaries are part of a company’s internal stakeholders.

<p>False (B)</p> Signup and view all the answers

The broad environment includes only technological influences.

<p>False (B)</p> Signup and view all the answers

One organization can significantly influence the forces in the broad environment.

<p>False (B)</p> Signup and view all the answers

Strategic surveillance involves collecting information from various environments.

<p>True (A)</p> Signup and view all the answers

Business intelligence is not affected by strategic surveillance.

<p>False (B)</p> Signup and view all the answers

Local and national government agencies are classified as external stakeholders.

<p>True (A)</p> Signup and view all the answers

Business intelligence primarily focuses on the collection and analysis of information regarding markets and customers.

<p>True (A)</p> Signup and view all the answers

Emergent strategies are planned responses to situations that were foreseen by strategists.

<p>False (B)</p> Signup and view all the answers

Deliberate strategies are designed for environments characterized by unpredictability.

<p>False (B)</p> Signup and view all the answers

The hierarchical levels of strategy include corporate, business, and operational strategies.

<p>False (B)</p> Signup and view all the answers

The essence of an emergent strategy is to react to changing conditions in a dynamic and competitive environment.

<p>True (A)</p> Signup and view all the answers

Traditional strategies, which are deliberate strategies, follow a process that begins with idea generation.

<p>True (A)</p> Signup and view all the answers

Business-level strategy formulation deals with how organizations should avoid competition.

<p>False (B)</p> Signup and view all the answers

Strategic management involves both deliberate strategies and those that emerge unpredictably.

<p>True (A)</p> Signup and view all the answers

Flashcards

Intent-Focused Thinking

The ability to focus on the desired end goal and think through the necessary steps to achieve it.

Comprehensive Thinking

Taking into account all relevant factors and perspectives, both internal and external, to make informed decisions.

Opportunistic Thinking

Seizing opportunities that arise unexpectedly, and adapting plans to capitalize on emerging trends.

Long-Term Orientation

Considering the long-term implications of actions, even if it means sacrificing short-term gains.

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Grounded in the Past

Leveraging past experiences and current knowledge to inform future decisions.

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Hypothesis-Driven Thinking

Forming hypotheses and testing them through analysis and experimentation, adapting plans based on the results.

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The Strategic Management Process

A process that involves analyzing the organization's current situation, setting strategic goals, formulating plans to achieve those goals, executing the plans, and monitoring progress.

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Financial Resources

This set of resources includes money, investments, and any other form of financial backing that the organization has access to.

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Emergent Strategy

The strategy that emerges in response to unexpected opportunities and problems that were not part of the original plan.

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Deliberate Strategy

The strategy that is intentionally planned and implemented by an organization.

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Realized Strategy

A type of strategy that combines elements of both deliberate and emergent strategies, recognizing that plans can change and opportunities can arise.

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Corporate Strategy

The highest level of strategy, focusing on the overall goals and direction of a company, including the selection of business areas to compete in.

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Business Strategy

The level of strategy that focuses on how a company will compete within a specific business or industry.

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Functional Strategy

The level of strategy that focuses on the specific functions of a business, such as marketing, finance, or operations.

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Strategy Formulation

The process of planning and formulating strategies at different levels of an organization, from corporate to functional.

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Strategy Implementation

The process of putting a strategy into action and ensuring that it is properly executed.

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Strategic Surveillance

The process of gathering information from different environments, including the company's internal workings, the industry it operates in, and the wider world, to understand the context and potential opportunities and threats.

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Operating Environment

Groups, individuals, or forces directly interacting with a company, impacting its operations and influencing its success. Examples include customers, suppliers, competitors, and government agencies.

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Broad Environment

The broader context in which a company operates, encompassing social, economic, technological, political, and legal influences.

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Organizational Resources

The distinctive qualities and assets that help a company stand out, including its reputation, brand names, patents, contracts, and relationships with external stakeholders.

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Organization's Influence on the Broad Environment

The ability of a company to exert influence on the external environment, often limited for individual companies.

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Broad Environment's Influence on the Organization

The impact of external forces on a company, potentially affecting its operations, growth, and success.

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Business Intelligence

The collection of information from various environments, including internal, operating, and broad environments.

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Environmental Analysis

The process of gathering, analyzing, and interpreting information about the company's environment to understand current conditions and anticipate future trends.

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Functional-Level Strategy

Strategies that focus on how to use specific functional areas like marketing, finance, or operations to achieve a business-level strategy.

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Strategic Business Unit (SBU)

A unit within a company that's distinct in its products, services, and target markets.

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Corporate-Level Strategy

The highest level of strategy, involving decisions about the overall direction of the company and which businesses to be in.

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Business-Level Strategy

A strategy that focuses on how to compete within a specific industry or market.

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Functional-Level Strategy (alternative definition)

This strategy addresses how to achieve a competitive advantage through resource acquisition, development, and management.

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Study Notes

Characteristics of Strategic Thinking

  • A strategic thinker possesses six key characteristics: intent-focused, comprehensive, opportunistic, long-term oriented, built on the past and present, and hypothesis-driven.

Intent-Focused

  • Strategic intent builds on a managerial vision of the firm's future direction.

Comprehensive

  • This involves viewing the firm as part of a larger system of value creation and understanding linkages.

Opportunistic

  • Seizing unexpected opportunities is crucial for strategic thinking.

Long-Term Oriented

  • Strategic thinking goes beyond immediate needs, considering future possibilities.

Built on Past and Present

  • Learning from past experiences and building on current realities is essential.

Hypothesis-Driven

  • Strategic thinking involves evaluating creative ideas critically and taking calculated risks.

The Concept of Strategy

  • Strategy is the process an organization uses to assess future prospects and achieve its goals.
  • It involves defining the company's objectives and the methods to reach them.

The Strategic Management Process

  • The strategic management process involves key activities including situation analysis, defining strategic direction, formulating specific strategies and implementing strategy.
  • This process analyzes broad and operating environments, internal resources, and stakeholders.
  • Strategies define a company's mission and vision.

Internal Environment

  • Internal environment consists of financial, physical, human resources, organizational knowledge/learning, and relationships.

Situational Analysis

  • External environment includes stakeholders (competitors, suppliers, financial intermediaries, local communities, unions etc.), government, economic, sociocultural and technological factors that affect the company.
  • Broad environment, which the firm operates in, includes societal trends, technological changes, political climate economic conditions, legal factors and cultural aspects.
  • The broad environment can impact the firm significantly.

Levels of Strategy

  • Corporate, business and functional levels of strategy are hierarchical levels to define a company's domain and activities.
  • Corporate strategy is about a firm's overall direction and management of its business. This covers broader questions about what businesses the firm is in or wants to be in.
  • Business strategy is about how a company competes in a specific market, defining its directions and how it navigates towards the identified domains.
  • Functional strategies involve the details of how areas like marketing, operations, finance etc. are used to implement business level strategies, to support the achievement of competitive advantages.

Strategic Surveillance

  • Strategic surveillance is a process of collecting information from broad, operating, and internal environments.
  • This informs the firm's business intelligence, which involves analyzing information about new technologies, markets, consumers, competitors and social trends.

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Strategic Management PDF

Description

Explore the essential traits of strategic thinking in this quiz. You will learn about being intent-focused, comprehensive, and opportunistic, as well as the importance of long-term orientation. Understand how past experiences influence current strategies and how to evaluate hypotheses critically.

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