Miles and Snow Strategy Typology
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Questions and Answers

What are the four strategies identified by Miles and Snow in their typology?

The four strategies are the prospector, defender, analyzer, and reactor.

What characterizes the prospector strategy according to Miles and Snow?

The prospector strategy is characterized by innovation, risk-taking, and seeking out new opportunities.

How does Nike exemplify the prospector strategy?

Nike exemplifies the prospector strategy by innovating in products and processes, such as introducing shoes made from recycled materials.

What is the focus of the defender strategy in contrast to the prospector?

<p>The defender strategy focuses on maintaining efficiency and protecting existing market positions rather than seeking new opportunities.</p> Signup and view all the answers

What has caused Volvo to adopt a prospector strategy under Li Shufu's leadership?

<p>Li Shufu's leadership has driven Volvo to innovate and explore new markets, shifting from its traditional defender strategy.</p> Signup and view all the answers

What are the key differences between official goals and operative goals?

<p>Official goals describe a value system and legitimize the organization, while operative goals represent explicit tasks and provide direction for employees.</p> Signup and view all the answers

How can operative goals influence employee motivation?

<p>Operative goals can motivate employees by providing clear targets and involving them in the goal-setting process.</p> Signup and view all the answers

What role do goals play in guiding employee behavior?

<p>Goals serve as guidelines and constraints, helping to shape acceptable behavior and decision-making within the organization.</p> Signup and view all the answers

What were the consequences of the budget cuts at Walkerton's water plant?

<p>The budget cuts led to reduced inspections and ultimately resulted in contamination of drinking water, causing illness and death.</p> Signup and view all the answers

In the context of Walkerton, what was the primary focus of the government's goals?

<p>The primary focus was on reducing expenditures, which overshadowed the quality and safety of drinking water.</p> Signup and view all the answers

How do goals provide a standard for assessment in organizations?

<p>Goals establish benchmarks for performance evaluation in areas such as profits, employee satisfaction, and innovation.</p> Signup and view all the answers

Why is it important for managers to carefully set and implement goals?

<p>Careful goal setting is crucial to avoid unintended consequences, such as decreased accountability and negative outcomes.</p> Signup and view all the answers

What lessons can be drawn from the events at Walkerton regarding goal setting?

<p>The incident illustrates that neglecting critical operational goals for financial reasons can lead to severe public health crises.</p> Signup and view all the answers

How do goals and strategies differ in the context of organizational management?

<p>Goals define where the organization wants to go, while strategies outline how it will achieve those goals.</p> Signup and view all the answers

What is the essence of formulating strategies for an organization?

<p>The essence lies in deciding whether to perform different activities than competitors or to execute similar activities more efficiently.</p> Signup and view all the answers

What shift did Magna International Inc. make in its acquisition strategy?

<p>Magna shifted from acquiring small or distressed companies to seeking larger acquisitions.</p> Signup and view all the answers

In what ways can strategies be viewed as narratives or myths in organizational contexts?

<p>Strategies can be seen as narratives created to persuade action or as myths that help organizations make sense of their experiences.</p> Signup and view all the answers

What three models are presented for formulating strategies?

<p>The three models are the Porter model of competitive strategies, Miles and Snow's strategy typology, and Kim and Mauborgne's blue ocean strategy.</p> Signup and view all the answers

How does the choice of strategies impact organizational design?

<p>The choice of strategies affects how resources are allocated, roles are defined, and processes are structured within the organization.</p> Signup and view all the answers

What role do accepted wisdoms play in strategy formulation according to the content provided?

<p>Accepted wisdoms can influence strategy formulation by shaping the narratives and myths that managers use to guide decisions.</p> Signup and view all the answers

How should managers view strategies in light of competitive environments?

<p>Managers should view strategies as plans for interacting with the competitive environment to achieve defined organizational goals.</p> Signup and view all the answers

What are the two factors that managers evaluate when using Porter's Competitive Strategies framework?

<p>Managers evaluate competitive advantage and competitive scope.</p> Signup and view all the answers

How is the focus strategy divided according to Porter's model?

<p>The focus strategy is divided into focused low-cost leadership and focused differentiation.</p> Signup and view all the answers

What is the key characteristic of the differentiation strategy?

<p>Organizations attempt to distinguish their products or services from others in the industry.</p> Signup and view all the answers

Name an example of a company that uses a differentiation strategy.

<p>Cervélo bicycles or Jaguar automobiles.</p> Signup and view all the answers

What must organizations that pursue a differentiation strategy invest in?

<p>Organizations must invest in product research, design, and extensive advertising.</p> Signup and view all the answers

How does a differentiation strategy contribute to customer loyalty?

<p>It reduces rivalry and creates brand loyalty among customers.</p> Signup and view all the answers

What type of customers does a differentiation strategy typically target?

<p>It targets customers who are not particularly concerned with price.</p> Signup and view all the answers

What role do strong marketing abilities play in a differentiation strategy?

<p>They are essential for communicating the uniqueness of the product effectively.</p> Signup and view all the answers

What is the primary goal of a low-cost leadership strategy?

<p>The primary goal is to increase market share by emphasizing low costs compared to competitors.</p> Signup and view all the answers

How does a low-cost leader defend against competitors?

<p>A low-cost leader can undercut competitors’ prices while still offering comparable quality, making it difficult for competitors to attract customers.</p> Signup and view all the answers

What significant strategic changes did WestJet make over the years?

<p>WestJet has identified and abandoned unprofitable strategies, markets, and technologies, such as stopping flights to certain cities.</p> Signup and view all the answers

What role do profit sharing programs play in a low-cost leadership strategy?

<p>Profit sharing programs minimize labor costs and reduce pressure to unionize among employees.</p> Signup and view all the answers

What is an example of a focused differentiation strategy in the text?

<p>Puma’s strategy of targeting specific customer groups with stylish, trend-setting athletic wear is an example of focused differentiation.</p> Signup and view all the answers

Describe the impact of not adopting a competitive strategy based on Porter's findings.

<p>Companies that do not adopt a competitive strategy often experience below-average profits compared to those that do.</p> Signup and view all the answers

What does the focus strategy entail according to the content provided?

<p>The focus strategy involves concentrating on a specific regional market or buyer group to achieve low-cost or differentiation advantages.</p> Signup and view all the answers

How did WestJet's premium service rollout face challenges?

<p>There were issues with the rollout as some passengers were unaware of the fare bundles, leading to confusion in seating arrangements.</p> Signup and view all the answers

What can be inferred about companies like eBay and Google in terms of competitive strategy?

<p>eBay and Google exemplify success through coherent differentiation strategies that effectively distinguish them in the marketplace.</p> Signup and view all the answers

What has been a common criticism of Porter's competitive strategy model?

<p>Porter's model is often criticized for being too generic and not accounting for organizations that succeed without a clear strategy.</p> Signup and view all the answers

What were the main motivations behind George Weston Limited's acquisition of Shoppers Drug Mart?

<p>The acquisition was motivated by a strategic shift towards the health and wellness market, which is viewed as an attractive investment space.</p> Signup and view all the answers

How can organizations identify their operative goals when objective indicators are lacking?

<p>Organizations can identify operative goals by engaging with top management to discuss actual priorities and using subjective assessments when quantitative data is unavailable.</p> Signup and view all the answers

What type of assessments are necessary for measuring goals related to employee welfare or social responsibility?

<p>Subjective assessments are necessary for measuring these goals, as they often lack objective indicators.</p> Signup and view all the answers

In what ways do subjective perceptions aid managers in goal assessment?

<p>Subjective perceptions help managers gauge progress toward goals when numerical data is not available, providing a holistic view of organizational performance.</p> Signup and view all the answers

Why is it important for managers to gather information from various sources such as customers and suppliers when identifying goals?

<p>Gathering such information ensures a well-rounded perspective on goal relevance and feasibility, which aids in effective decision-making.</p> Signup and view all the answers

What does organizational effectiveness measure in an organization?

<p>Organizational effectiveness measures the degree to which an organization realizes its goals.</p> Signup and view all the answers

How is organizational efficiency distinctly defined from effectiveness?

<p>Organizational efficiency pertains to the amount of resources used to produce a unit of output.</p> Signup and view all the answers

Why might an organization be efficient but still fail to be effective?

<p>An organization may be highly efficient yet fail to achieve its goals if it produces a product for which there is no demand.</p> Signup and view all the answers

What challenges do managers face in measuring organizational effectiveness?

<p>Managers often struggle with evaluating effectiveness based on characteristics that are not subject to hard, quantitative measurement.</p> Signup and view all the answers

What types of indicators are executives using to measure organizational effectiveness?

<p>Top executives are using 'soft' indicators such as customer delight and employee satisfaction to measure effectiveness.</p> Signup and view all the answers

Why is it difficult to measure overall effectiveness in large organizations?

<p>Overall effectiveness is challenging to measure due to the complexity and diversity of activities, goals, and outcomes.</p> Signup and view all the answers

What impact does the pursuit of multiple goals have on organizational effectiveness?

<p>Pursuing multiple goals can lead to mixed outcomes, some intended and some unintended, complicating effectiveness evaluation.</p> Signup and view all the answers

What is one approach managers can use to gauge organizational effectiveness?

<p>Managers can determine which indicators to measure based on their specific organizational goals.</p> Signup and view all the answers

What does the goal approach to effectiveness measure in an organization?

<p>It measures the organization's ability to achieve its desired levels of output.</p> Signup and view all the answers

How does the resource-based approach define organizational effectiveness?

<p>It defines effectiveness as the ability to obtain and manage scarce and valued resources.</p> Signup and view all the answers

What is a key indicator of effectiveness in the internal-process approach?

<p>Economic efficiency is a key indicator of internal-process effectiveness.</p> Signup and view all the answers

What is one limitation of the resource-based approach?

<p>It vaguely considers the organization's link to customer needs in the external environment.</p> Signup and view all the answers

According to the internal-process approach, what contributes to organizational effectiveness?

<p>Internal organizational health and high employee satisfaction contribute to effectiveness.</p> Signup and view all the answers

What is the significance of the bargaining position in the resource-based approach?

<p>It indicates an organization's ability to obtain scarce resources from its environment.</p> Signup and view all the answers

What is one strength of the internal-process approach?

<p>It highlights the importance of team spirit and communication within the organization.</p> Signup and view all the answers

What aspect is not considered by the internal-process approach to effectiveness?

<p>It does not take into account the external environment of the organization.</p> Signup and view all the answers

How is organizational effectiveness assessed in a resource-based perspective?

<p>It is assessed based on the ability to integrate and manage resources effectively.</p> Signup and view all the answers

What is one of the seven indicators of internal-process effectiveness?

<p>Strong organizational culture and a positive work climate are indicators.</p> Signup and view all the answers

Why is the resource-based approach valuable for non-profit organizations?

<p>It is valuable when other performance indicators are difficult to measure.</p> Signup and view all the answers

What does the internal-process approach emphasize about decision making?

<p>It emphasizes decision making near sources of information, regardless of hierarchy.</p> Signup and view all the answers

What role do managers play in the resource-based approach regarding their decision-making?

<p>Managers should perceive and correctly interpret the external environment's properties.</p> Signup and view all the answers

In the context of the internal-process approach, what is a determinant of employee satisfaction?

<p>Confidence, trust, and communication between workers and management are determinants.</p> Signup and view all the answers

How does the internal-process approach measure organizational effectiveness?

<p>It assesses the efficient use of resources and harmonious internal functioning.</p> Signup and view all the answers

What is a key characteristic of the goal approach to organizational effectiveness?

<p>It involves identifying an organization's output goals and evaluating how well they have been attained.</p> Signup and view all the answers

Why are operative goals considered more productive for measuring effectiveness than official goals?

<p>Operative goals reflect the actual activities an organization is performing and are easier to measure.</p> Signup and view all the answers

What challenge does the Toronto Transit Commission (TTC) face despite its ridership growth?

<p>It struggles to keep up with service demand due to city budget constraints.</p> Signup and view all the answers

How does Loblaw's pricing strategy reflect its market positioning?

<p>Loblaw uses private-label groceries as high-margin items to position itself as a high-quality grocer.</p> Signup and view all the answers

What significant change did Galen G. Weston announce for Loblaw in 2007?

<p>He announced a plan to increase profits by 10 percent a year while cutting prices and boosting marketing.</p> Signup and view all the answers

What are the implications of having multiple and conflicting operative goals within an organization?

<p>It complicates the assessment of overall effectiveness as high achievement in one area may mean low achievement in another.</p> Signup and view all the answers

What is a core benefit of a balanced approach to measuring organizational effectiveness?

<p>It allows for the simultaneous assessment of several goals to provide a comprehensive view of performance.</p> Signup and view all the answers

In what way did the vision of Diavik Diamond Mines reflect a commitment beyond profit generation?

<p>Its vision emphasized responsible practices and community benefit rather than solely focusing on shareholder profit.</p> Signup and view all the answers

What issue did Loblaw identify concerning customer satisfaction related to store layout?

<p>Customers were unhappy with the distance to the dairy section in superstores.</p> Signup and view all the answers

What role does employee recognition, such as the Employee of the Year award, play in organizational effectiveness?

<p>It boosts employee morale and commitment, which are crucial for overall organizational performance.</p> Signup and view all the answers

Why is it challenging to gauge operational goals effectively?

<p>Operational goals are diverse and often difficult to measure due to their qualitative aspects.</p> Signup and view all the answers

How does the concept of organizational effectiveness extend beyond financial performance?

<p>It includes evaluating employee satisfaction, internal harmony, and alignment with broader social responsibilities.</p> Signup and view all the answers

What are the key indicators Loblaw management should track to ensure their strategy is effective?

<p>They should measure customer satisfaction, profit margins, and employee performance.</p> Signup and view all the answers

Flashcards

Prospector Strategy

A business strategy focused on innovation, risk-taking, and growth in a dynamic environment.

Defender Strategy

A strategy focused on efficiency and stability in a stable environment.

Analyzer Strategy

A strategy that combines elements of prospector and defender strategies.

Reactor Strategy

A strategy where a company responds to changes in the environment instead of proactively shaping it.

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Miles and Snow Typology

A framework for categorizing business strategies based on their fit with the external environment.

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Official Goals

Statements describing a company's values, purpose, and vision. They establish legitimacy and guide overall direction.

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Operative Goals

Specific, measurable objectives that guide day-to-day operations and tasks. They provide direction and clarity for employees.

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How do goals motivate?

Clear goals provide a sense of purpose, direction, and accomplishment for employees, especially when they are involved in setting them.

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The Walkerton Example

A tragic case illustrating the negative consequences of setting and prioritizing goals without proper oversight and safety measures.

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Goals as Guidelines

Appropriate goals can act as boundaries for employee behaviour and decision-making, aligning actions with organizational values.

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Goals for Decision Making

Goals help define appropriate decisions about organizational structure, innovation, employee welfare, or growth.

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Goals for Assessment

Goals provide a standard for measuring and evaluating organizational performance in areas like profits, production, customer satisfaction, and innovation.

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Importance of Setting and Implementing Goals

Managers need to carefully set and implement goals, understanding their potential impact on motivation, behaviour, and decision-making.

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Strategy

A plan for interacting with the competitive environment to achieve organizational goals.

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Goal vs. Strategy

Goals define where an organization wants to go, while strategies define how it will get there.

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Strategic Differentiation

Choosing to perform different activities than competitors OR executing similar activities more efficiently.

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Strategic Myths

Narratives or stories used by managers to make sense of their experiences and influence others.

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Porter's Competitive Strategies

A model that provides a framework for formulating strategies based on cost leadership, differentiation, or focus.

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Miles and Snow's Strategy Typology

A framework for categorizing business strategies based on their response to the external environment.

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Blue Ocean Strategy

A framework that seeks to create uncontested market space where competition is irrelevant.

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Strategy's Impact on Design

The choice of strategies directly influences the organizational design needed to implement those strategies.

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Cost Leadership

Competing by having the lowest production and distribution costs compared to rivals, allowing for lower prices or higher profits.

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Differentiation

Distinguishing products or services from competitors by offering unique features, quality, or service, justifying higher prices.

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Focus Strategy

Concentrating on a specific market segment or buyer group, either by offering low costs or differentiated products within that niche.

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What are Porter's 4 basic competitive strategies?

The four basic strategies are: Cost Leadership, Differentiation, Focused Cost Leadership, and Focused Differentiation.

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What are the benefits of a differentiation strategy?

Differentiation can reduce competition and deter substitutes because customers are loyal to the brand, but it requires significant investment in research, design, and marketing.

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What are the drawbacks of a differentiation strategy?

A differentiation strategy needs substantial resources for research, development, and marketing. It's also vulnerable to imitators and changes in customer tastes.

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Focused Cost Leadership

Achieving the lowest cost within a specific target market segment, allowing for lower prices or higher profits than competitors within that segment.

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Focused Differentiation

Offering unique features or benefits to a specific market segment or group of buyers, allowing for premium pricing within that segment.

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Low-Cost Leadership

A strategy where a company focuses on being the cheapest producer in its industry, aiming for a large market share through low prices and efficient operations.

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Focused Low-Cost Leadership

A strategy where a company focuses on being the cheapest producer within a specific niche market, targeting a smaller group of customers.

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WestJet's Strategy

A successful example of a low-cost leadership strategy, emphasizing efficient operations, cost control, and continuous improvement.

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Focused Differentiation Strategy

A strategy where a company focuses on offering unique and valuable products or services to a specific market segment, aiming to stand out from competitors.

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Importance of Competitive Strategy

Companies need to adopt a specific competitive strategy to avoid becoming average and ensure profitability.

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eBay and Google's Success

Examples of companies that achieved success by adopting clear differentiation strategies that set them apart in the marketplace.

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Criticism of Porter's Model

Some criticize Porter's model for being too generic and failing to account for companies that thrive without a specific strategy outlined in the model.

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Strategic Advantage

A unique capability or position that allows a company to outperform its competitors in the marketplace.

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Organizational Effectiveness

The degree to which an organization achieves its goals, reflecting success in fulfilling its purpose and achieving desired outcomes.

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Efficiency vs Effectiveness

Efficiency focuses on using resources wisely to produce output, while effectiveness measures how well an organization achieves its goals. Efficiency is about 'doing things right,' while effectiveness is about 'doing the right things.'

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Contingency Effectiveness Approaches

Methods for measuring organizational effectiveness that consider the specific situation and context of the organization.

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What are some examples of 'soft' indicators of effectiveness?

These are less tangible measures, like customer satisfaction, employee morale, or public perception, which can give insights into an organization's performance.

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Why is measuring effectiveness difficult?

Many organizations are complex and pursue multiple goals simultaneously, making it challenging to measure and evaluate their overall performance.

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What's the difference between strategic goals and operative goals?

Strategic goals are high-level, long-term objectives that define the overall direction of the organization, while operative goals are specific, short-term targets that guide daily operations and tasks.

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What are indicators of innovation success?

Indicators of innovation success should be tied to potential future profits.

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How to identify operative goals?

Identify operative goals by talking to the top management team and understanding their vision for the organization's day-to-day operations.

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Why are subjective assessments important?

Subjective assessments are required for goals like employee welfare or social responsibility, which lack readily available objective indicators.

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What resources do managers use to assess goals?

Managers rely on various sources like customer feedback, competitor analysis, supplier insights, employee perspectives, and their own intuition to assess goals.

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What is the health and wellness market?

The health and wellness market is an attractive investment space, attracting acquisitions in sectors like healthcare and fitness.

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Internal-Process Approach

Focuses on how efficiently an organization uses its resources and functions internally, emphasizing effective communication, coordination, and harmonious workforce.

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Goal Approach

Evaluates an organization's effectiveness by measuring how well it achieves its stated goals, both official and operative.

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Balanced Approach

Considering multiple goals simultaneously to assess effectiveness, acknowledging possible conflicts and prioritizing key areas.

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Loblaw's Situation

A Canadian grocery chain faced with declining margins, unhappy customers, and heavy investments, highlighting the challenge of achieving multiple goals.

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Multiple Goals & Effectiveness

Organizations often have multiple and conflicting goals, making it difficult to assess effectiveness with a single indicator.

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Indicators of Goal Attainment

Measuring performance based on specific indicators that reflect progress towards achieving goals, both quantitative and qualitative.

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Subjective Indicators

Indicators that rely on personal judgement or opinion, making them less objective and potentially prone to bias.

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Objective Indicators

Indicators that provide a clear, factual, and measurable assessment of performance, reducing reliance on personal interpretation.

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Quantifiable Goals

Goals that can be measured numerically, allowing for precise tracking of progress and performance assessment.

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Non-Quantifiable Goals

Goals that are difficult to measure objectively, relying more on subjective evaluation and qualitative assessment.

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Effectiveness Assessment

The process of evaluating an organization's performance based on chosen criteria and indicators, to understand how well it fulfills its purpose.

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Shortcomings of Internal-Process Approach

This approach fails to consider the organization's external environment and output, potentially limiting its scope of evaluation.

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Shortcomings of Goal Approach

Challenges include the presence of multiple conflicting goals, difficulties in identifying operative goals, and the subjective nature of some indicators.

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TTC's Example

The Toronto Transit Commission highlights the challenge of balancing success with resource constraints, demonstrating the impact of external factors on effectiveness.

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Resource-Based Approach

Measures organizational effectiveness by evaluating the organization's ability to obtain and manage scarce and valued resources (e.g., skilled employees, raw materials).

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Bargaining Position (Resource-Based)

The organization's ability to obtain scarce and valued resources from the environment, including financial resources, raw materials, human resources, and knowledge.

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Resource Management (Resource-Based)

The ability of the organization to effectively utilize both tangible (physical) and intangible (knowledge, culture) resources to achieve superior performance.

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Adaptability (Resource-Based)

The organization's ability to respond and adapt to changes in the environment, such as shifts in customer needs or new competitors.

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Economic Efficiency (Internal-Process)

Measures how effectively the organization uses its resources to achieve output goals (e.g., minimizing waste, maximizing productivity).

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Positive Work Climate (Internal-Process)

A work environment characterized by trust, open communication, teamwork, and employee satisfaction.

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Decision Making (Internal-Process)

Effective decision-making occurs close to the source of information, regardless of position in the hierarchy, fostering communication and responsiveness.

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Communication (Internal-Process)

Open and undistorted communication between workers and management, where relevant information and feelings are shared effectively.

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Management Rewards (Internal-Process)

Managers are rewarded for developing subordinates, creating effective work groups, and promoting growth and performance within teams.

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Resource-Based Approach Strengths

Especially useful when direct measurement of output goals or internal efficiency is difficult (e.g., non-profit organizations, early-stage businesses).

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Resource-Based Approach Weaknesses

Limited focus on customer needs and potential changes in the external environment, potentially leading to misallocation of resources.

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Internal-Process Approach Strengths

Emphasis on organizational health, efficiency, and employee satisfaction, which can contribute to long-term success.

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Internal-Process Approach Weaknesses

Lack of focus on the external environment, potentially neglecting the changing needs of customers and competitors.

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Study Notes

Miles and Snow Strategy Typology

  • Miles and Snow's typology examines how strategies align with external environments.
  • Organizations aim for alignment between internal characteristics, strategy, and external factors.
  • Four strategies exist: prospector, defender, analyzer, and reactor.

Prospector Strategy

  • Focuses on innovation, risk-taking, seeking new opportunities, and growth.
  • Suitable for dynamic and growing environments valuing creativity over efficiency.
  • Nike exemplifies this strategy, innovating in product design and internal processes.
  • Example: Nike introducing shoes made from recycled materials.
  • Even companies traditionally following other strategies can use a prospector approach, such as Volvo, thanks to external factors.

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Description

Explore Miles and Snow's strategy typology that examines how organizational strategies align with external environments. This quiz covers the four primary strategies: prospector, defender, analyzer, and reactor, and includes real-world examples like Nike's innovative practices. Test your understanding of these strategic frameworks and their applicability in various contexts.

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