Strategic Management Overview
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Questions and Answers

What is the most important aspect for a firm's strategy?

A firm's strategy should be aligned to the environment.

When was the concept of strategy developed?

The 1960s.

What is the definition of strategy according to Andrews (1965)?

  • A pattern of major objectives, purposes or goals, and essential policies and plans for achieving those goals, stated in such a way as to define what business the company is in or aspires to be in, and the kind of company it is or aspires to be. (correct)
  • The selection of long-term goals and the choice of programs or plans for achieving them through the suitable allocation of resources.
  • The way of linking a firm to its environment; the need to focus attention on achieving competitive advantage and improving firm performance; the notion of change as consubstantial with strategy, both within the environment and inside the firm itself.
  • The actions, plans, programs or approaches required for attaining the goals.

    • What describes the way a firm links itself to its environment?

    <p>The way of linking a firm to its environment; the need to focus attention on achieving competitive advantage and improving firm performance; the notion of change as consubstantial with strategy, both within the environment and inside the firm itself.</p> Signup and view all the answers

    What are the primary beneficiaries of a firm's success?

    <p>The owners of the firm.</p> Signup and view all the answers

    What are the other groups of people who benefit from a firm's success?

    <p>Stakeholders.</p> Signup and view all the answers

    What is the primary focus of strategic decisions?

    <p>The long-term direction of the firm or organization.</p> Signup and view all the answers

    What are the key aspects of generating rents?

    <p>The generation, enhancement, and exploitation of the firm's resources and organizational capabilities.</p> Signup and view all the answers

    How can a firm achieve its full potential for generating rents?

    <p>Being aware of the firm's resources and capabilities, and effectively utilizing them.</p> Signup and view all the answers

    What is the key to defining the scope of the firm?

    <p>Identifying the businesses in which the firm is going to compete.</p> Signup and view all the answers

    What condition is necessary for a firm to have an effective strategy?

    <p>Conditions of high uncertainty.</p> Signup and view all the answers

    Describe the essential nature of a firm's strategic decisions.

    <p>They are complex.</p> Signup and view all the answers

    What is the key to a successful strategy?

    <p>Having a holistic approach.</p> Signup and view all the answers

    What are the three important aspects of a firm's strategic decisions?

    <p>Mission, vision, and values.</p> Signup and view all the answers

    What does a firm seek to achieve through its strategic decisions?

    <p>The sum of the firm's decisions at all levels.</p> Signup and view all the answers

    The firm's network of outside relations contributes to the success of the strategy.

    <p>True</p> Signup and view all the answers

    Organisational change is easy to manage.

    <p>False</p> Signup and view all the answers

    What is the main purpose of corporate strategy?

    <p>Identify the activities or businesses the firm seeks to pursue.</p> Signup and view all the answers

    What is the main purpose of competitive strategy?

    <p>How to compete more effectively in each one of the activities or businesses in which the firm operates.</p> Signup and view all the answers

    Which of these is a characteristic of a strategic business unit (SBU)?

    <p>A homogeneous set of activities from a strategic perspective for which a common competitive strategy can be formulated.</p> Signup and view all the answers

    What is the primary goal of functional strategy?

    <p>To use the firm's resources and capabilities within each operational area to maximize productivity.</p> Signup and view all the answers

    What is the main purpose of strategic analysis?

    <p>To formulate a strategy.</p> Signup and view all the answers

    What is the key objective of strategic formulation?

    <p>To develop a blueprint to achieve the firm's objectives.</p> Signup and view all the answers

    What is the central goal of strategic implementation?

    <p>To execute a plan to reach the desired goal or set of goals.</p> Signup and view all the answers

    What is the main responsibility of a firm's top management?

    <p>To make strategic decisions that impact the whole firm or a significant part of it.</p> Signup and view all the answers

    What is the role of a Chief Strategy Officer (CSO)?

    <p>To provide internal consultancy and advice on formulating strategies.</p> Signup and view all the answers

    What are the key duties of top management in terms of strategic management?

    <p>Aligning strategy management process, obtaining and mobilizing resources, seeking corporate returns, managing conflicts of interest, and liaising with key stakeholders.</p> Signup and view all the answers

    What is the role of the Board of Directors in strategic management?

    <p>To oversee and supervise the strategic management process, and evaluate the performance of top management.</p> Signup and view all the answers

    What is the role of the Strategy and Corporate Development Staff in strategic management?

    <p>To gather information, process and analyze it, and draft recommendations on major strategic decisions.</p> Signup and view all the answers

    What is the most important aspect of strategic fit?

    <p>A necessary match between the context in which the strategy is to be developed and the chosen strategy itself.</p> Signup and view all the answers

    What are the three key elements of strategic fit?

    <p>Exploiting opportunities, drawing upon the firm's strengths, and mitigating weaknesses.</p> Signup and view all the answers

    What is organizational fit?

    <p>A match between the chosen strategy and the organizational characteristics of the firm.</p> Signup and view all the answers

    What is the key to achieving a successful strategic change?

    <p>Restoring the necessary fit between context and strategy.</p> Signup and view all the answers

    What is organizational change?

    <p>The modification of one or more of the organization's characteristics.</p> Signup and view all the answers

    What is the main motivation for strategic change?

    <p>The ever-changing context and the need to constantly assess the strategic fit.</p> Signup and view all the answers

    What was the main contribution of Chandler's work (1962) to strategic management?

    <p>Establishing an empirical link between firm's growth strategies and the organizational structures they adopted.</p> Signup and view all the answers

    What was the main contribution of Andrews' work (1965) to strategic management?

    <p>Providing a definition of strategy that is applied even today.</p> Signup and view all the answers

    What is the main benefit of studying strategic management?

    <p>Access to greater wealth of knowledge and a better understanding of both theoretical and practical concepts.</p> Signup and view all the answers

    What is the main challenge in studying strategic management?

    <p>Successfully organizing and arranging the generated knowledge to ensure a smooth transfer of know-how within its diverse fields.</p> Signup and view all the answers

    What is the core objective of the rational approach in strategic management?

    <p>To formulate a strategic plan based on sound economic logic.</p> Signup and view all the answers

    What is the focus of the organizational approach in strategic management?

    <p>Analyzing how strategic decisions are made within organizations.</p> Signup and view all the answers

    What is the main goal of the holistic approach in strategic management?

    <p>To integrate the rational and organizational approaches.</p> Signup and view all the answers

    What are the two main types of strategies in a holistic view of strategic management?

    <p>Deliberate and emergent strategies.</p> Signup and view all the answers

    What is the main advantage of a deliberate strategy?

    <p>It allows for more control when the cost of failure is high.</p> Signup and view all the answers

    What is the main advantage of an emergent strategy?

    <p>It allows for flexibility and adaptation in dynamic and complex environments.</p> Signup and view all the answers

    What is the main aspect of the holistic approach that emphasizes the importance of organizational aspects in strategic management?

    <p>Organizational problems take on special significance in the definition of a firm's mission and goals.</p> Signup and view all the answers

    What are the 'safe zones' in the context of strategic management?

    <p>Those that remove the uncertainty from the environment and protect a firm from its competitors.</p> Signup and view all the answers

    What is the main focus of the implementation phase, from an organizational perspective?

    <p>Addressing organizational problems that may hinder the successful implementation of a strategy.</p> Signup and view all the answers

    What is the impact of the growing importance of organizational aspects in strategic management?

    <p>Greater focus on the relationships between individuals and on the social factors that influence decision-making within the organisation.</p> Signup and view all the answers

    The holistic approach emphasizes that both rational and organizational aspects of strategic decision-making are important for strategic management.

    <p>True</p> Signup and view all the answers

    Study Notes

    Strategic Management

    • Strategic management is crucial for aligning a firm's strategy with the environment. Managers must adapt to complex and unstable environments.
    • The concept of strategy evolved throughout the 1960s and is intertwined with management systems' internal and external dynamics.

    Key Figures and Concepts

    • Andrews (1965): Defined strategy as a pattern of major objectives, purposes, or goals, essential policies, and plans for achieving these. It outlines what business a company is in or aspires to be.
    • Chandler (1962): Focused on the selection of long-term goals and programmatic plans, along with resource allocation.
    • Ansoff (1965): Emphasized actions, plans, and approaches needed to achieve goals, the link between a firm and its environment, the need for competitive advantage, and performance improvement.
    • Porter (1980): Highlighted the selection of long-term goals, program/plan choice, and resource allocation.
    • Ronda and Guerras (2012): Explained the dynamic relationship between a firm and its environment and the rational use of resources for achieving goals and increasing performance.

    Other Major Concepts

    • Opportunities: Factors that favor a firm's operations and success.
    • Threats: Factors that hinder a firm's success.
    • Resources and capabilities: Essential assets for achieving business objectives.
    • Strengths: Activities a firm excels at, utilizing valuable resources and capabilities.
    • Weaknesses: Activities where a firm's performance is below par.
    • Competitive advantage: Characteristics that differentiate a firm from its competitors, difficult to imitate, and/or relevant in the short term.
    • Profitability and value creation: Measures of a firm's worth in the market.

    Strategic Management Phases

    • Strategic analysis: Involves examining a company's internal and external environments to formulate a strategy. Includes using analytic methods like Porter's five forces, SWOT, and value chain analysis.
    • Strategic formulation: Defining clear objectives, outlining a blueprint for achieving them, and integrating insights from different functional areas (e.g., marketing, finance) with operations to craft aligned strategies. This aims to achieve sustainable growth and competitive advantage.
    • Strategic implementation: Putting strategic plans and actions into practice, assessing the effectiveness of the strategy through different criteria to identify potential better alternatives.

    Strategic Management Responsibility

    • Top management: Responsible for strategic decisions' broad impact and complex implications. Includes defining a firm's mission, vision, and goals.
    • Board of directors: Oversee and evaluate top management's strategic decisions, focusing on value creation and shareholder interests.
    • Strategy and corporate development staff: Gathering, processing, and analyzing information, recommending strategic decisions and providing independent advice.

    The Process' Relationship

    • Fit between the different elements: Crucial to ensure that different elements comprising a strategy (strategic and organizational) fit. Strategic fit between the chosen strategy and the environment, firm's characteristics, and the strategic goals.
    • Organizational fit: Match between the firm's strategy and its organizational characteristics to ensure successful implementation.

    Holistic view of Strategy (Emergent and Deliberate)

    • Strategic management's holistic view merges the rational and organizational approaches to integrate internal and external factors, ensuring a company's competitiveness and profitability. Also considers both deliberate and emergent aspects of strategy development.

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    Description

    Explore the critical concepts and key figures in strategic management. This quiz delves into the evolution of strategy and its alignment with both internal and external dynamics within a firm. Test your understanding of influential theories and strategies proposed by pioneers like Andrews, Chandler, Ansoff, and Porter.

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