Strategic Management Decisions Quiz
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Questions and Answers

What is a characteristic of strategic decisions?

  • Addressing changes in the business environment (correct)
  • Narrow scope of activities
  • Short-term focus
  • Lack of consideration for stakeholders' values and expectations

    • In what situations are strategic decisions likely to be made?

  • When operational decisions are unaffected
  • Situations of certainty
  • Involving minimal change
  • Situations of uncertainty (correct)

    • What do good strategy making and execution indicate?

  • Outstanding performance in the market (correct)
  • Lack of direction
  • Poor management
  • Lack of goals

    • What do firms face when considering classical strategic questions?

    <p>Uncertain industry evolution</p> Signup and view all the answers

    What do the answers to classical strategic questions help determine?

    <p>The firm's strategy</p> Signup and view all the answers

    What does the value proposition reflect?

    <p>Explicit choices along three dimensions</p> Signup and view all the answers

    What determines the firm's performance primarily?

    <p>Industry Effects and Firm effects</p> Signup and view all the answers

    What does the Operating Model capture?

    <p>Business choices related to profitability</p> Signup and view all the answers

    What does Thinking Strategically involve?

    <p>Choosing the 'How's of Strategy'</p> Signup and view all the answers

    What are the three elements of a good strategy?

    <p>Diagnosis, Addressing, Coherent actions</p> Signup and view all the answers

    What is the key point about managers' actions in determining firm performance?

    <p>They tend to be more important than forces exerted by the external environment</p> Signup and view all the answers

    What does a good strategy require?

    <p>Conducting a critical assessment of the status quo and clear communication of guiding policies</p> Signup and view all the answers

    What does Firm effects give an answer to?

    <p>&quot;Why firms within the same industry differ&quot; and &quot;How differences among firms can lead to competitive advantage&quot;</p> Signup and view all the answers

    What does Strategy spell out?

    <p>The company's approach to exploit its capabilities &amp; resources to create value to customers</p> Signup and view all the answers

    What is the main focus of addressing the competitive challenge in a good strategy?

    <p>&quot;Strategy formulation, resulting in corporate, business, and functional strategies&quot;</p> Signup and view all the answers

    "How do we profitably deliver the offering?" is captured by which concept?

    <p>&quot;Operating Model&quot;</p> Signup and view all the answers

    What is the focus of the resource-based model in explaining superior firm performance?

    <p>Firm resources and sustainable competitive advantage</p> Signup and view all the answers

    According to the text, what are the critical assumptions about resources in the resource-based model?

    <p>Availability and stability</p> Signup and view all the answers

    What does the concept of Firm Resources encompass according to the text?

    <p>All assets, capabilities, organizational processes, firm attributes, information and knowledge controlled by a firm</p> Signup and view all the answers

    In the context of strategic management, what do the STEEP analysis and environmental analysis primarily focus on?

    <p>External environmental factors and their impact</p> Signup and view all the answers

    Which factor is NOT a focus of the resource-based model for explaining firm performance?

    <p>Customer value proposition</p> Signup and view all the answers

    What is the main emphasis of addressing the competitive challenge in a good strategy, based on the text?

    <p>Improving efficiency and effectiveness through firm resources</p> Signup and view all the answers

    What does the resource-based model primarily focus on in explaining superior firm performance?

    <p>Firm resources and sustainable competitive advantage</p> Signup and view all the answers

    What is captured by the concept of 'Firm Resources' according to the text?

    <p>All assets, capabilities, organizational processes, firm attributes, information and knowledge controlled by a firm</p> Signup and view all the answers

    What is the key point about managers' actions in determining firm performance according to the text?

    <p>Managers' actions play a critical role in determining superior firm performance</p> Signup and view all the answers

    What are the two critical assumptions about resources in the resource-based model for explaining superior firm performance?

    <p>Valuable and rare resources leading to sustainable competitive advantage</p> Signup and view all the answers

    What does the concept of 'Thinking Strategically' involve according to the text?

    <p>Anticipating competitive challenges and making trade-offs</p> Signup and view all the answers

    Study Notes

    Strategic Decisions

    • Strategic decisions are long-term, broad in scope, and impact the entire organization.
    • They are likely to be made in situations involving significant changes, new opportunities, or major threats.

    Good Strategy

    • Good strategy making and execution indicate a firm's ability to effectively adapt to its environment and achieve its goals. They are essential for long-term success.

    Classical Strategic Questions

    • Firms face classical strategic questions like:
      • "What business should we be in?" and "How should we compete in these businesses?"
    • Answers to these questions help determine the firm's overall strategy and guide its actions.

    Value Proposition

    • The value proposition reflects the benefits a firm offers to its customers, justifying their purchase.

    Firm Performance

    • A firm's performance is primarily determined by its ability to create and capture value, going beyond just operational efficiency.

    Operating Model

    • The operating model captures the processes, systems, and activities a firm utilizes to deliver its value proposition efficiently and effectively.

    Thinking Strategically

    • Thinking Strategically involves anticipating change, understanding the competitive landscape, and making proactive decisions to shape the future.

    Elements of a Good Strategy

    • A good strategy is built on three elements:
      • A diagnosis of the competitive challenge
      • A guiding policy to address this challenge
      • A set of coherent actions to implement the guiding policy

    Managers Actions in Determining Firm Performance

    • Managers' actions are crucial in determining firm performance, showing how good strategy is not just a plan, but a series of actions and decisions.

    What a Good Strategy Requires

    • A good strategy requires clarity, consistency, and commitment. It needs to be articulated, understood, and actively pursued by all stakeholders.

    Firm Effects

    • Firm effects explain how a firm's specific actions and choices impact its success, highlighting the importance of strategic decision making.

    Strategy

    • Strategy spells out a plan for achieving a competitive advantage and sustaining its growth.

    Addressing the Competitive Challenge

    • The main focus of addressing the competitive challenge in a good strategy is understanding the competitive landscape and positioning the firm advantageously within it.

    "How do we profitably deliver the offering?"

    • "How do we profitably deliver the offering?" is captured by the concept of the firm's operating model.

    The Resource Based Model

    • The resource-based model focuses on internal resources and capabilities as the primary drivers of superior firm performance.

    Critical Assumptions about Resources

    • The resource-based model assumes that resources are heterogeneous and imperfectly mobile.

    Firm Resources

    • The concept of firm resources encompasses all assets, capabilities, and knowledge that a firm controls and deploys to achieve competitive advantage.

    STEEP Analysis

    • The STEEP analysis (Social, Technological, Economic, Environmental, Political) and other environmental analyses focus on understanding the external environment.

    Resource-Based Model Focus

    • The resource-based model NOT focus on general external environmental factors to explain firm performance

    Addressing the Competitive Challenge with a Good Strategy

    • Addressing the competitive challenge in a good strategy emphasizes the firm's competitive advantage and how it will be sustained.

    Resource-Based Model Primary Focus

    • The resource-based model focuses on identifying, developing, and leveraging firm-specific resources to achieve sustainable competitive advantage.

    Firm Resources

    • The concept of firm resources encompasses all assets, capabilities, and knowledge that a firm controls and deploys to achieve competitive advantage.

    Manager Actions in Determining Firm Performance

    • Manager actions are crucial in determining firm performance as they translate strategy into action.

    Critical Assumptions in the Resource-Based Model

    • The two critical assumptions are that resources are heterogeneous (differ across firms) and imperfectly mobile (difficult to replicate or transfer).

    Thinking Strategically

    • Thinking strategically involves understanding the competitive landscape, anticipating change, and making proactive decisions to shape the future.

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    Description

    Test your understanding of strategic management decisions characterized by long-term direction, scope of activities, gaining advantage over competitors, addressing changes in the business environment, and meeting stakeholder expectations. Explore how strategic decisions are made in situations of uncertainty.

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