Podcast
Questions and Answers
Which component of the ESC-Gap model assesses the organization's resources and processes?
Which component of the ESC-Gap model assesses the organization's resources and processes?
- Organisational Capabilities (correct)
- Performance Analysis
- Gap Analysis
- Business Strategies
What does Gap Analysis in the ESC-Gap model primarily focus on?
What does Gap Analysis in the ESC-Gap model primarily focus on?
- Identifying industry trends
- Formulating business strategies
- Evaluating stakeholder satisfaction
- Highlighting discrepancies between reality and expectations (correct)
Which of the following is considered an internal stakeholder of an organization?
Which of the following is considered an internal stakeholder of an organization?
- General Public
- Suppliers
- Customers
- Employees (correct)
What is the primary purpose of performance analysis in the ESC-Gap model?
What is the primary purpose of performance analysis in the ESC-Gap model?
In stakeholder analysis, what defines key stakeholders?
In stakeholder analysis, what defines key stakeholders?
Which of the following is a step involved in implementing strategies within the ESC-Gap model?
Which of the following is a step involved in implementing strategies within the ESC-Gap model?
Which aspect is NOT part of the macro-environment in the ESC-Gap model's examination?
Which aspect is NOT part of the macro-environment in the ESC-Gap model's examination?
What are strategic options primarily concerned with in the ESC-Gap model?
What are strategic options primarily concerned with in the ESC-Gap model?
What best defines the concept of a Strategic Business Unit (SBU)?
What best defines the concept of a Strategic Business Unit (SBU)?
Which strategy level primarily focuses on decisions made within specific functions like R&D or marketing?
Which strategy level primarily focuses on decisions made within specific functions like R&D or marketing?
In the context of the ESC-Gap Model, which elements are examined for relationships and gaps?
In the context of the ESC-Gap Model, which elements are examined for relationships and gaps?
What is the primary function of values in the strategy formulation process?
What is the primary function of values in the strategy formulation process?
Which of the following best describes the relationship between strengths and weaknesses in the internal environment?
Which of the following best describes the relationship between strengths and weaknesses in the internal environment?
What characterizes functional strategies compared to corporate strategies?
What characterizes functional strategies compared to corporate strategies?
What does a gap analysis primarily identify within an organization?
What does a gap analysis primarily identify within an organization?
Which statement about the internal environment is true?
Which statement about the internal environment is true?
What does corporate strategy primarily focus on in a multi-business organization?
What does corporate strategy primarily focus on in a multi-business organization?
Which of the following is NOT a consideration when judging the suitability of a strategy?
Which of the following is NOT a consideration when judging the suitability of a strategy?
What is one key component to assess when determining the feasibility of a strategy?
What is one key component to assess when determining the feasibility of a strategy?
Which aspect of a strategy does acceptability primarily evaluate?
Which aspect of a strategy does acceptability primarily evaluate?
How does sustainability influence strategic decision-making?
How does sustainability influence strategic decision-making?
What does the gap analysis process help identify in strategic management?
What does the gap analysis process help identify in strategic management?
In stakeholder analysis, what is considered a significant outcome of a successful strategy?
In stakeholder analysis, what is considered a significant outcome of a successful strategy?
Which factor is most closely related to the internal environment when assessing a company's strategy?
Which factor is most closely related to the internal environment when assessing a company's strategy?
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Study Notes
ESC-Gap Model Components
- The ESC-Gap model focuses on the relationship between Environment, Strategy, Capabilities, and performance.
- The model begins by examining the environment of the organization, including the industry environment and macro-environment.
- It then assesses business strategies by examining the organization's vision, mission, values, and stakeholder expectations.
- Organizational capabilities are analyzed through an assessment of the organization's resources and processes.
- Performance analysis evaluates the business's performance relative to environmental demands, organizational capabilities, and stakeholder expectations.
- Gap analysis highlights shortcomings between performance and expectations.
- The model identifies strategic options to bridge the gaps.
- Decision making involves evaluating strategic options and selecting the best option for implementation.
- Implementation involves putting the chosen strategy into action.
Key Stakeholders
- Stakeholders are individuals or groups with an interest in the organization's business strategy.
- Key stakeholders can influence the organization's business strategy.
- External stakeholders include customers, unions, special-interest groups, creditors, suppliers, government, and the general public.
- Internal stakeholders include employees, investors, management, and the board of directors.
Levels of Strategy
- Business-level strategy focuses on strategic business units (SBUs) and the individual product/market segments served by each SBU.
- SBUs are distinct, independent units with unique environments.
- Functional strategy is developed for individual functional operations (e.g., R&D, marketing, production, finance).
- Functional strategies are tactical decisions guided by overall strategic considerations.
- Corporate strategy determines the composition of the business portfolio for multi-business organizations/corporations.
- Corporate strategy decisions concern objectives, resource allocation, and coordination of strategies among SBUs.
Values and Strategy
- Values are essential in strategy formulation, connecting the internal environment (values, goals, resources, capabilities, structure) with the external environment (stakeholders, general environment, competitive environment).
- These connections reveal an organization's strengths, weaknesses, opportunities, and threats.
Gap Analysis
- The ESC-Gap model examines the relationships and gaps between Environment, Strategy, Capabilities, and performance.
Evaluating Strategic Directions
- Suitability assesses how well the strategy aligns with the organization's situation, findings of the SWOT analysis, and organizational culture.
- Feasibility examines the availability of resources (expertise, technology, materials) to achieve the strategy.
- Acceptability considers whether the strategy meets stakeholder expectations, risk levels are acceptable, and a desirable level of return is possible.
Strategy in Action
- The strategy development process, structuring, resourcing, strategic change, and actual practice are crucial for successful implementation.
Sustainability
- Businesses increasingly consider their social and ecological responsibilities and ethical impact on stakeholders and the community.
- The long-term sustainability of a business may be affected by its social and ecological impact.
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