Professional Documents
Culture Documents
Chapter One
McGraw-Hill/Irwin Copyright 2012 by The McGraw-Hill Companies, Inc. All rights reserved.
Learning Objectives
After reading this chapter, you should have a good understanding of:
LO1.1 The definition of strategic management and its four key attributes. LO1.2 The strategic management process and its three interrelated and principal activities. LO1.3 The vital role of corporate governance and stakeholder management as well as how symbiosis can be achieved among an organizations stakeholders.
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QUESTION
A CEO made a lot of mistakes such as committing errors in assessing the market and competitive conditions and improperly redesigning the organization into numerous business units. Such errors led to significant performance declines. This illustrates the __________ perspective of leadership.
A. B. C. D.
Example: 3M
Elements of Buckleys turnaround Set clear business goals for the company Wanted 3M to develop lower-cost products to compete in emerging markets Became an outspoken champion for 3M labs
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Strategic decisions
What industries should we compete in? How should we compete in those industries?
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Exhibit 1.1
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Realized strategy
Decisions are determined by both analysis and unforeseen environmental developments, unanticipated resource constraints, and/or changes in managerial preferences
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Exhibit 1.2
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Process
Exhibit 1.3
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Strategic Analysis
Consists of advance work that must be done in order to effectively formulate and implement strategies Starting point
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Strategy Formulation
A firms strategy formulation is developed at several levels: Business-level Corporate level International Entrepreneurial
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Strategy Implementation
Ensuring proper strategic controls and organizational designs Establishing effective means to coordinate and integrate activities within the firm as well as with suppliers, customers, and alliance partners
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Corporate Governance
Three mechanisms ensure effective corporate governance: An effective and engaged board of directors Shared activism Proper managerial rewards and incentives
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Stakeholder Management
Zero sum view
Stakeholders compete for attention and resources of the organization Gain of one is a loss to the other Rooted in the traditional conflict between workers and management
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Stakeholder Management
Stakeholder symbiosis view
Stakeholders are dependent upon each other for their success and well-being Mutual benefits
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QUESTION
Outback Steakhouse has developed a sophisticated quantitative model and found that there were positive relationships between employee satisfaction, customer satisfaction, and financial results. This is an example of __________. A. Zero-sum relationship among stakeholders B. Stakeholder symbiosis C. Rewarding stakeholders D. Emphasizing financial returns
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Crowdsourcing
Crowdsourcing
practice wherein the Internet is used to tap a broad range of individuals and groups to generate ideas and solve problems. Linux, Amazon, Wikipedia
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Social Responsibility
Social responsibility
The expectation that businesses or individuals will strive to improve the overall welfare of society
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Social Responsibility
Triple bottom line
Assessment of a companys performance in financial, social, and environmental dimensions
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Executive leaders
Champion and guide ideas, create a learning infrastructure, establish a domain for taking action
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A Hierarchy of Goals
Exhibit 1.6
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