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Questions and Answers
What is the primary focus of corporate strategy?
What is the primary focus of corporate strategy?
What aspect of corporate strategy involves understanding the firm's future orientation?
What aspect of corporate strategy involves understanding the firm's future orientation?
What does competitive strategy primarily emphasize?
What does competitive strategy primarily emphasize?
How does corporate strategy generate synergies?
How does corporate strategy generate synergies?
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Why is information sharing crucial among different strategy levels in an organization?
Why is information sharing crucial among different strategy levels in an organization?
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What is a primary action for a diversified corporation according to corporate strategy?
What is a primary action for a diversified corporation according to corporate strategy?
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What defines the purpose of competitive strategy?
What defines the purpose of competitive strategy?
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Which of the following best describes strategic business units (SBUs)?
Which of the following best describes strategic business units (SBUs)?
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What are the three sources that contributed to the development of Strategic Management?
What are the three sources that contributed to the development of Strategic Management?
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Which of the following is NOT an advantage mentioned in the context of Strategic Management?
Which of the following is NOT an advantage mentioned in the context of Strategic Management?
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Which theory is one of the academic contributions to Strategic Management?
Which theory is one of the academic contributions to Strategic Management?
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What has significantly contributed to the maturity of Strategic Management as a discipline?
What has significantly contributed to the maturity of Strategic Management as a discipline?
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What is the primary focus of the Rational Approach in Strategic Management?
What is the primary focus of the Rational Approach in Strategic Management?
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Which organization is NOT mentioned as part of the academic community in Strategic Management?
Which organization is NOT mentioned as part of the academic community in Strategic Management?
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What problem is encountered in the field of Strategic Management?
What problem is encountered in the field of Strategic Management?
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Which of the following fields contributes to understanding individual behavior of managers in Strategic Management?
Which of the following fields contributes to understanding individual behavior of managers in Strategic Management?
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What does the Icarus paradox refer to in the context of successful firms?
What does the Icarus paradox refer to in the context of successful firms?
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What are considered factors that obstruct the road to success for a firm?
What are considered factors that obstruct the road to success for a firm?
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In the context of strategic management, what is meant by 'competitive advantage'?
In the context of strategic management, what is meant by 'competitive advantage'?
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What should a firm focus on in the medium term to ensure success?
What should a firm focus on in the medium term to ensure success?
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Which of the following best describes 'resources and capabilities' in a firm?
Which of the following best describes 'resources and capabilities' in a firm?
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How can the success of a firm benefit its stakeholders?
How can the success of a firm benefit its stakeholders?
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What do 'opportunities' in a business context represent?
What do 'opportunities' in a business context represent?
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What is the role of strengths in building a successful business strategy?
What is the role of strengths in building a successful business strategy?
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Which scenario best represents an unsuitable strategy?
Which scenario best represents an unsuitable strategy?
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What is organizational fit primarily concerned with?
What is organizational fit primarily concerned with?
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What leads to an increased risk of failure in a firm's strategy?
What leads to an increased risk of failure in a firm's strategy?
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Which of the following best describes strategic change?
Which of the following best describes strategic change?
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When might a firm need to undergo organizational change?
When might a firm need to undergo organizational change?
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Strategic management as a field of study first appeared in which decade?
Strategic management as a field of study first appeared in which decade?
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Which concept reflects the dynamic nature of strategy?
Which concept reflects the dynamic nature of strategy?
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Who is credited with providing a key definition of strategy that is applied today?
Who is credited with providing a key definition of strategy that is applied today?
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Which factor does not favor the rational nature of the strategic decision-making process?
Which factor does not favor the rational nature of the strategic decision-making process?
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What is a characteristic of emergent strategies?
What is a characteristic of emergent strategies?
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Which aspect is considered less in the rational approach to strategic management?
Which aspect is considered less in the rational approach to strategic management?
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What is a significant outcome of focusing only on deliberate strategies?
What is a significant outcome of focusing only on deliberate strategies?
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Which factor does NOT influence the model of strategic decision-making adopted by an organization?
Which factor does NOT influence the model of strategic decision-making adopted by an organization?
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Which is an outcome of both deliberate and emergent strategies in a firm?
Which is an outcome of both deliberate and emergent strategies in a firm?
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What role do independent control mechanisms play in strategic decision-making?
What role do independent control mechanisms play in strategic decision-making?
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In a holistic view of strategic management, what should also be considered alongside rational approaches?
In a holistic view of strategic management, what should also be considered alongside rational approaches?
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What is the primary responsibility of the strategy and corporate development staff?
What is the primary responsibility of the strategy and corporate development staff?
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In large corporations, who typically holds the title of Chief Strategy Officer?
In large corporations, who typically holds the title of Chief Strategy Officer?
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How does the distribution of responsibilities differ between large and small corporations in strategic management?
How does the distribution of responsibilities differ between large and small corporations in strategic management?
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What is strategic fit primarily concerned with?
What is strategic fit primarily concerned with?
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What role do line managers play in the implementation of strategy in an organization?
What role do line managers play in the implementation of strategy in an organization?
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What aspect of strategic management could involve executive responsibilities in a merger or acquisition?
What aspect of strategic management could involve executive responsibilities in a merger or acquisition?
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Why is widespread responsibility for implementation important in an organization?
Why is widespread responsibility for implementation important in an organization?
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What are the main components that must be aligned for a successful strategy?
What are the main components that must be aligned for a successful strategy?
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Study Notes
Strategic Management
- A firm's strategy must align with the ever-changing, complex, and hostile environment. Managers need to adapt strategies to this unstable environment.
Concept of Strategy
- Strategy, developed in the 1960s, has evolved alongside management systems, encompassing major objectives, purposes, goals, and essential policies and plans to achieve those goals.
- It defines the business a company is in or aspires to be.
- Strategy encompasses actions, plans, programs, and approaches for attaining goals, linking the firm to its environment, highlighting the importance of competitive advantage and change within the firm and its environment. It is a process for making strategic decisions to achieve specific goals and improve decision-making.
- The firm's relationship with its environment is dynamic, demanding actions to achieve goals and enhance performance through resource allocation.
Why Improve Firm Performance?
- Firm success benefits owners, increasing investment value.
- It also impacts other stakeholders, such as individuals, groups, or organizations.
Characteristics of Strategic Decisions
- Made in uncertain and complex environments, requiring firm to adjust their assumptions as operation develops.
- Complex in nature, especially in large, diversified companies operating globally, characterized by constant change (social preferences, political tensions, regulations).
- Holistic approach needed by organizations, requiring a firm-wide perspective and synergy creation to achieve strategic success.
- Significant impact at all levels of the firm, affecting not only overall decisions but also operating levels.
- A strong network of outside relations supports a firm's strategy.
- Organizational changes associated with strategy implementation may be challenging due to the established culture and accumulated resources.
Reasons for Strategic Failure
- Poor analysis or diagnosis of the problem
- Mistaking objectives for strategy (defining objectives without outlining how they are achieved).
- Poorly defined objectives (overly broad or too numerous to manage).
- Organizational inertia (resistance to change).
- Fear of losing power among influential groups in an organization.
- Inability to respond to change, especially for very successful firms
- Doing paperwork without strategic thinking.
Strategic Management as a Field of Study
- Academic discipline emerged in the 1960s, with Chandler's work establishing a link between firm growth and organizational structure.
- Andrews described strategy, laying foundations for internal and external analysis in the process.
- Ansoff identified basic strategies for growth and development.
- Strategic management encompasses three main strands—academic, business, and consultancy practices.
Strategic Management Process
- Strategic Analysis: Examining a firm and its operating environment to develop a strategy. This involves defining the internal and external environments to be analyzed, the firm's future orientation (vision and mission), and identifying internal strengths and weaknesses and external threats and opportunities.
- Strategic Formulation: Determining clear objectives and creating a roadmap to achieve them. This involves integrating insights from functional areas to create aligned strategies with the firm's mission and vision.
- Strategic Implementation: Putting plans into action. This includes assessing the strategy, taking actions, and monitoring to ensure success.
Responsibility for Strategic Decisions
- Top management has primary responsibility, impacting the entire firm.
- Top executives (CEO) are responsible for high-level strategy. Functional managers implement functional strategies.
- Board of Directors oversees top managers, ensuring strategic directions align with shareholder interests.
Fit and Change in Strategic Management
- Strategic fit is crucial for strategy success; matching the context and chosen strategy.
- Organizational fit matches the strategy to the organization's characteristics.
- Strategic change is modifying the strategy to adapt to a changing environment.
Holistic View of Strategic Management
- A holistic approach integrates rational and organizational views in developing comprehensive strategies.
- Intended and emergent strategies form a complete strategy framework and should be considered alongside each other.
- Relationships between internal and external agents are critical to successful strategy implementation.
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Description
This quiz explores the key concepts of strategic management, focusing on how a firm's strategy must evolve in response to a complex and changing environment. It covers the historical development of strategy, its relationship with firm performance, and the importance of aligning strategies with business goals.
