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Questions and Answers
What is strategy?
A set of related actions that managers take to increase their company’s performance.
What is management?
How businesses organize and direct workflow, operations, and employees to meet company goals.
What is the primary goal of management?
Which of these is not a key function of management?
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What is strategic management?
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What does superior performance refer to?
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The primary purpose of risk capital is that it cannot be ______ if a company fails and goes bankrupt.
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Managers are obligated to maximize shareholder value in all circumstances.
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Study Notes
Strategic Management
- Involves setting goals, procedures, and objectives to enhance a company's competitiveness.
- Empowers managers to make related actions that improve a company’s performance.
- Achieving superior performance relative to rivals is a fundamental challenge.
- Competitive advantage results when strategies yield superior performance.
Management
- Organizes and directs workflow, operations, and employees toward company goals.
- Aims to create an environment that empowers employees for efficiency and productivity.
- Solid organizational structure is essential to guide employees and establish work focus.
Key Functions of Management
- Planning: Establishment of goals for employees, departments, or the organization overall.
- Organizing: Placing the right people in suitable positions and fostering collaboration to achieve organizational goals.
- Motivating: Encourages employees through shared vision, strength development, and constant inspiration for optimal performance.
- Evaluating: Measurement of team success and goal achievement to improve future decision-making.
Stages of Strategic Management
- Involves several steps including strategy formulation, goal evaluation, and process improvement for executing new initiatives.
- Example scenario: Introducing a new service line necessitates evaluation of current processes and future objectives.
Strategic Leadership, Competitive Advantage, and Superior Performance
- Strategic leadership focuses on enhancing the strategy-making process to boost company performance and increase shareholder value.
- Profitability growth is essential to increase shareholder value, requiring companies to outperform rivals.
- Outperformance creates a competitive advantage, critical for long-term success.
Superior Performance
- Maximizing shareholder value is a key goal for profit-oriented companies, motivated by two reasons:
- Shareholders provide risk capital vital for resource acquisition, expecting returns.
- Legal ownership grants shareholders a claim on profits, enforcing managerial obligation to invest profits wisely.
- Returns for shareholders stem from capital appreciation in share value and dividend payments.
- Managers must balance maximizing shareholder value with legal, ethical, and social responsibilities.
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Description
This quiz covers the fundamental concepts of strategic management and its key functions. It explores goal-setting, organizing, and motivating employees to enhance company performance and competitiveness. Test your knowledge on how strategic actions can lead to superior performance in the business environment.
