Strategic Management Overview
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Questions and Answers

What defines a strategic business unit (SBU)?

  • A broad category of market strategy applicable to all departments.
  • A homogeneous set of activities for which a common competitive strategy can be formulated. (correct)
  • A collection of unrelated activities across different firms.
  • A unit that practices total decentralization in resource allocation.

    • What is the main purpose of functional strategy in a corporation?

  • To maximize the productivity of resources within each operational area. (correct)
  • To define the overall corporate mission and vision.
  • To analyze the competitive landscape of the entire industry.
  • To manage relationships with external stakeholders.

    • Which phase is primarily concerned with gathering and analyzing relevant data about a company?

  • Strategic analysis. (correct)
  • Competitive positioning.
  • Strategic decision-making.
  • Operational efficiency.

    • What role does external analysis serve in the strategic management process?

    <p>Uncovering the threats and opportunities in the firm's surrounding environment.</p> Signup and view all the answers

    Which of the following is NOT a recommended method in the strategic analysis phase?

    <p>Cost-benefit analysis.</p> Signup and view all the answers

    How does a diversified corporation handle competitive strategies?

    <p>By creating distinct strategies for each SBU based on specific market conditions.</p> Signup and view all the answers

    What is the focus of defining the firm's future orientation in strategic management?

    <p>Aligning business operations with the company’s values and strategic goals.</p> Signup and view all the answers

    Which of the following best describes the relationship between functional strategies and higher-level strategies?

    <p>Functional strategies must support higher-level strategies to achieve the firm’s overall goals.</p> Signup and view all the answers

    What is a key reason why managers must adapt their strategies?

    <p>The complexity and hostility of the environment</p> Signup and view all the answers

    Which of the following best describes the concept of strategy?

    <p>The development and alignment of internal policies with external goals</p> Signup and view all the answers

    Which aspect of strategy emphasizes the need for competitive advantage?

    <p>Linking the firm to its environment</p> Signup and view all the answers

    What does the selection of long-term goals in strategic management typically involve?

    <p>Making informed plans through suitable resource allocation</p> Signup and view all the answers

    Which strategy is most suitable when the cost of a venture's failure is very high?

    <p>Deliberate strategy</p> Signup and view all the answers

    In strategic management, what role do rivals play?

    <p>They create a dynamic that influences strategic choices.</p> Signup and view all the answers

    What is the role of relational strategies in a firm's strategy formulation?

    <p>To create privileged relationships that reduce environmental uncertainty</p> Signup and view all the answers

    How does strategy relate to the firm's performance?

    <p>Strategy aims primarily to improve and enhance performance.</p> Signup and view all the answers

    Which aspect is NOT considered a key organizational problem during the implementation phase of strategy?

    <p>Cost analysis of the venture</p> Signup and view all the answers

    The emergent approach to strategy is particularly beneficial for developing what type of capabilities?

    <p>Valuable capabilities for long-term competitive advantage</p> Signup and view all the answers

    What characterizes the decisions involved in developing strategy?

    <p>They involve structured techniques aimed at specific goals.</p> Signup and view all the answers

    What is a significant factor in the relationship between a firm and its environment?

    <p>The firm can manipulate the environment to its benefit.</p> Signup and view all the answers

    Which of the following reflects a necessary complementarity in strategic management?

    <p>Integrating economic-rational aspects with organizational approaches</p> Signup and view all the answers

    What aspect has gained more attention in strategy success over recent years?

    <p>Cognitive and emotional factors in relationships</p> Signup and view all the answers

    What is a shift in focus that has occurred in recent years regarding strategic management?

    <p>From competitive analysis to stakeholder analysis</p> Signup and view all the answers

    What can lead to conflicts among stakeholders during strategy evaluation?

    <p>Different objectives of various stakeholders</p> Signup and view all the answers

    What is the main purpose of internal analysis in a firm?

    <p>To diagnose the firm’s strengths and weaknesses.</p> Signup and view all the answers

    What is not a primary goal of strategic formulation?

    <p>Setting long-term financial targets.</p> Signup and view all the answers

    Which of the following is a focus during strategic implementation?

    <p>Executing the plan to achieve goals.</p> Signup and view all the answers

    What best describes corporate strategies?

    <p>Plans defining a firm’s future development direction.</p> Signup and view all the answers

    What is a significant risk of the Icarus paradox for successful firms?

    <p>They may become complacent and reluctant to change.</p> Signup and view all the answers

    What does strategic formulation require from various functional areas?

    <p>Integration of insights to align strategies.</p> Signup and view all the answers

    What is the role of strengths in a firm's strategy?

    <p>They are activities the firm excels in and are key for success.</p> Signup and view all the answers

    What is a characteristic of a business unit within an organization?

    <p>It has its own distinct market and mission.</p> Signup and view all the answers

    What do opportunities represent in the context of a firm's environment?

    <p>External factors that favor the firm's operations.</p> Signup and view all the answers

    Why is feedback essential in strategic implementation?

    <p>To determine if strategies are effective and need reworking.</p> Signup and view all the answers

    Which of the following best describes competitive advantage?

    <p>It is a trait that distinguishes the firm favorably from competitors.</p> Signup and view all the answers

    What is one of the key outcomes of strategic formulation?

    <p>Establishing actionable strategies to achieve defined goals.</p> Signup and view all the answers

    What is a key characteristic of weaknesses in a firm's strategy?

    <p>They are important areas where the firm lacks excellent performance.</p> Signup and view all the answers

    In strategic planning, what does the formal process often get confused with?

    <p>Real strategic thinking to overcome challenges.</p> Signup and view all the answers

    What are threats in the context of a firm's strategy?

    <p>They are external factors blocking success.</p> Signup and view all the answers

    Why might influential groups within a firm resist necessary strategic changes?

    <p>To maintain their power and control.</p> Signup and view all the answers

    What does the ABC Model in strategic management represent?

    <p>Academia, Business, Consultants</p> Signup and view all the answers

    Which of the following is NOT identified as an academic contribution to strategic management?

    <p>Supply Chain Management</p> Signup and view all the answers

    What is a primary problem mentioned regarding knowledge in strategic management?

    <p>Difficulty in organizing and systematically arranging knowledge</p> Signup and view all the answers

    Which approach to strategic management emphasizes prescriptive nature and economic logic?

    <p>The Rational Approach</p> Signup and view all the answers

    What is indicated as a key issue for strategic management?

    <p>Identifying factors of success in global competition</p> Signup and view all the answers

    Which of the following best describes the evolution of strategic management?

    <p>It has become more mature with a wider array of topics and methodologies.</p> Signup and view all the answers

    Which organization is NOT mentioned as part of the academic society promoting strategic management?

    <p>Harvard Business Review</p> Signup and view all the answers

    What is one of the advantages of integrating academic, business, and consultancy knowledge in strategic management?

    <p>It leads to greater wealth of knowledge.</p> Signup and view all the answers

    Study Notes

    Strategic Management

    • A firm's strategy must align with the ever-changing and complex environment
    • Managers need to adapt their strategies accordingly
    • Strategic decisions are essential to a firm's success and often evolve in parallel with management systems

    The Concept of Strategy

    • Strategy concepts have evolved since the 1960s, reflecting changes in management systems and external factors
    • Andrews (1965) defined strategy as the pattern of major objectives, goals, and policies for achieving those goals, specifying the type of business a company is in or aspires to be in.
    • Chandler (1962), Ansoff (1965), and Porter (1980) each offered perspectives on strategy as the selection of goals, plans, programs and resources to obtain them, linking the firm to its environment and improving performance.
    • Porter (1980) also describes strategy as linking the firm to its environment; the need to focus attention on achieving a competitive advantage and improving firm performance; and the notion of change as inherent in strategy, both within the environment and inside the firm.
    • Ronda and Guerras (2012) emphasize the dynamism of the firm's relationship with its environment, emphasizing goals and increased performance via efficient resource utilization.

    Strategic Implementation

    • Strategic implementation is the execution of plans and strategies.
    • Success depends on proper feedback, status reports, and adaptation for improvement.
    • Strategic implementation involves actions (not just ideas) and team participation.
    • The implementation process requires a structured approach that includes consideration of organizational elements like culture, structure, leadership, and supportive systems.

    The Processes of Strategic Management

    • Strategic Analysis involves researching the company and its environment to create a roadmap. It uses methods like SWOT analysis and Porter's five forces to define the internal and external environment
    • Strategic Formulation encompasses defining objectives and developing blueprints to achieve them. It ties together various functional areas like marketing, finance, and operations to craft strategies consistent with a firm's mission and vision.
    • Strategic Implementation entails turning plans into actions, assessing strategies, and choosing the best option for success.

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    Description

    This quiz explores key concepts and definitions in strategic management as discussed from various perspectives since the 1960s. It emphasizes the importance of aligning a firm’s strategy with its environment and the role of strategic decisions in achieving competitive advantage. Test your understanding of the evolution of strategy and its impact on management systems.

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