Chapter 7

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This deck includes 46 flashcards covering strategy implementation, strategy formulation, strategy-structure relationship, and related concepts. Use it to review key Business ideas, focus on weak cards, and prepare for your exam with StudyLess.

1. 01

   Strategy Formulation (SF) vs. Strategy Implementation (SI) - Nature of work

   SF: primarily intellectual; SI: primarily operational.

2. 02

   Strategy Formulation (SF) vs. Strategy Implementation (SI) - Skills required

   SF: good intuitive and analytical skills; SI: special motivation and leadership skills.

3. 03

   Strategy Formulation (SF) vs. Strategy Implementation (SI) - Coordination scope

   SF: among a few people; SI: among many people.

4. 04

   Why do changes in strategy often require changes in organizational structure?

   Structure dictates how objectives and policies are established and how resources are allocated.

5. 05

   What should structure be designed to do?

   To facilitate the strategic pursuit of a firm and, therefore, follow strategy.

6. 06

   What happens to existing organizational structure when strategy changes?

   It may become ineffective.

7. 07

   Chandler's Strategy-Structure Relationship - Step 1

   New strategy is formulated.

8. 08

   Chandler's Strategy-Structure Relationship - Step 2

   New administrative problems emerge.

9. 09

   Chandler's Strategy-Structure Relationship - Step 3

   Organizational performance declines.

10. 10

    Chandler's Strategy-Structure Relationship - Step 4

    A new organizational structure is established.

11. 11

    Chandler's Strategy-Structure Relationship - Step 5

    Organizational performance improves.

12. 12

    Basic Forms of Organizational Structure

    Functional Structure, Divisional Structure, Strategic Business Unit Structure (SBU), Matrix Structure.

13. 13

    Functional Structure - Definition

    Groups tasks and activities by business function (e.g., production, finance, marketing, R&D, HR, IT, etc.).

14. 14

    Functional Structure - Advantages

    Simple and inexpensive; Capitalizes on specialization; Minimizes need for elaborate control system; Allows for rapid decision making.

15. 15

    Functional Structure - Disadvantages

    Accountability forced to the top; Delegation not encouraged; Minimizes career development; Low morale; Inadequate planning for products/markets; Short-term, narrow thinking; Communication problems.

16. 16

    Divisional Structure - Ways to organize

    By geographic area, By product or service, By customer, By process.

17. 17

    Divisional Structure - Advantages

    Accountability is clear; Allows local control; Creates career development chances; Promotes delegation; Leads to competitive climate internally; Allows easy addition of new products/regions; Allows strict control and attention to products, customers, and/or regions.

18. 18

    Divisional Structure - Disadvantages

    Can be costly; Duplication of functional activities; Requires skilled management force; Requires elaborate control system; Competition can be dysfunctional; Limited sharing of ideas/resources; Some regions/products/customers may receive special treatment.

19. 19

    Strategic Business Unit (SBU) Structure - Definition

    Groups similar divisions into strategic business units and delegates authority and responsibility for each unit to a senior executive who reports directly to the CEO.

20. 20

    Matrix Structure - Definition

    The most complex structure, depending on both vertical and horizontal flows of authority and communication.

21. 21

    Matrix Structure - Advantages

    Project objectives are clear; Employees see results of their work; Shutting down a project is easy; Facilitates use of special equipment/personnel/facilities; Functional resources are shared instead of duplicated.

22. 22

    Matrix Structure - Disadvantages

    Requires excellent vertical and horizontal communication; Costly (more manager positions); Violates unity of command; Dual lines of budget authority; Dual sources of reward/punishment; Shared authority and reporting; Requires mutual trust and understanding.

23. 23

    Restructuring - Definition

    Reducing the size of an organization.

24. 24

    Other terms for Restructuring

    Downsizing, Rightsizing, Delayering.

25. 25

    Methods of Restructuring and what they involve

    Downsizing (reducing employees), Rightsizing (reducing divisions), Delayering (reducing hierarchical levels).

26. 26

    Purpose of Restructuring

    To improve efficiency and effectiveness.

27. 27

    Elements of Creating a Strategy-Supportive Culture (1-5)

    Formal statements of organizational philosophy, Design of physical spaces, Deliberate role modeling, teaching, and coaching, Explicit reward and status system, Stories, legends, myths, and parables.

28. 28

    Elements of Creating a Strategy-Supportive Culture (6-10)

    What leaders pay attention to, Leader reactions to critical incidents and crises, Organizational design and structure, Organizational systems and procedures, Criteria for recruitment, selection, promotion, leveling off, retirement, and 'excommunication' of people.

29. 29

    Production/Operations Decision Examples

    Plant size, Inventory / Inventory control, Quality control, Cost control, Technological innovation.

30. 30

    Human Resource Concerns

    Assessing staffing needs and costs, Selection Methods, Employee Training, Motivating Employees (incentives, work-life balance), Selecting Appropriate Leadership Styles.

31. 31

    Who should be involved in SF decisions?

    Divisional and functional managers.

32. 32

    Management Issues Central to Strategy Implementation - Left Column

    Establish annual objectives, Devise policies, Allocate resources, Alter existing organizational structure, Restructure & reengineer, Revise reward & incentive plans, Minimize resistance to change.

33. 33

    Why do SI problems arise?

    Because of the shift in responsibility, especially if SF decisions surprise middle- and lower-level managers.

34. 34

    Management Issues Central to Strategy Implementation - Right Column

    Match managers to strategy, Develop a strategy-supportive culture, Adapt production/operations processes, Develop an effective human resources function, Downsize & furlough as needed, Link performance & pay to strategies.

35. 35

    Purpose of Annual Objectives - Basis for resource allocation

    Annual objectives serve as the basis for resource allocation.

36. 36

    Purpose of Annual Objectives - Management evaluation

    Annual objectives are a mechanism for management evaluation.

37. 37

    Purpose of Annual Objectives - Progress monitoring

    Annual objectives are a major instrument for monitoring progress toward achieving long-term objectives.

38. 38

    Purpose of Annual Objectives - Priorities

    Annual objectives establish priorities (organizational, divisional, and departmental).

39. 39

    Four Types of Resources

    Financial resources, Physical resources, Human resources, Technological resources.

40. 40

    Conflict - Definition

    A disagreement between two or more parties.

41. 41

    What can cause conflict in an organization?

    Interdependency of objectives and competition for limited resources.

42. 42

    Is conflict always 'bad'?

    No, conflict is not always 'bad'.

43. 43

    What may a lack of conflict signal?

    Apathy.

44. 44

    How can conflict be beneficial?

    It can energize opposing groups to action and help managers identify problems.

45. 45

    Strategy Formulation (SF) vs. Strategy Implementation (SI) - Focus

    SF: effectiveness; SI: efficiency.

46. 46

    Strategy Formulation (SF) vs. Strategy Implementation (SI) - Positioning of forces

    SF: before the action; SI: during the action.

47. 47

    What are some ethical issues that can arise in strategy?

    Corruption, environmental damage, employee exploitation, and false advertising.

48. 48

    What is Corporate Social Responsibility (CSR)?

    The consideration of society by organizations when making strategic decisions.

49. 49

    What are the key responsibilities under CSR?

    Protecting the environment, supporting communities, ensuring employee welfare, and promoting fair business practices.

50. 50

    What is strategic intuition?

    Decisions based on experience, judgment, and insight.

51. 51

    When is strategic intuition particularly useful?

    When information is incomplete, the environment is uncertain, or quick decisions are needed.

52. 52

    What is the limitation of strategic intuition?

    It should complement analysis, not replace it.

53. 53

    What is organizational culture?

    Shared values, beliefs, and norms affecting employees.

54. 54

    How does organizational culture influence strategy?

    It can support strategy implementation, resist strategic change, or influence innovation.

55. 55

    What is a Board of Directors?

    A group responsible for overseeing organizational direction.

56. 56

    What are the major roles of the Board of Directors?

    Approving strategic plans, monitoring performance, ensuring accountability, and protecting shareholder interests.

57. 57

    What are the strategic responsibilities of the Board?

    Evaluating top management, ensuring ethical conduct, managing organizational risks, approving major investments, and guiding long-term strategy.

58. 58

    What is the importance of good governance by the Board?

    Strong boards improve organizational performance.

59. 59

    What factors affect the final strategy choice?

    Financial capability, risk level, organizational culture, stakeholder expectations, government regulations, and competitive pressures.

60. 60

    What are the benefits of ethical strategy?

    It builds trust, improves reputation, and enhances sustainability.

61. 61

    What do strategy analysis and choice involve?

    Evaluating alternative strategic options and selecting the best strategy to help an organization achieve its objectives.

62. 62

    What is the importance of strategy analysis and choice?

    It helps organizations allocate resources effectively, reduces uncertainty, improves long-term performance, and supports sustainable competitive advantage.

63. 63

    What are the key questions in strategy analysis and choice?

    Where are we now? Where do we want to go? Which strategy should we choose? Which alternative provides competitive advantage?

64. 64

    What does strategy analysis refer to examining?

    Internal strengths and weaknesses, external opportunities and threats, the competitive environment, and organizational capabilities.

65. 65

    What does strategy choice involve?

    Selecting the most attractive strategy among alternatives.

66. 66

    What are the characteristics of strategy analysis and choice?

    Future-oriented, decision-centered, requires analytical thinking, and involves uncertainty and risk.

67. 67

    What are the three stages of the comprehensive framework for strategy formulation?

    Input Stage, Matching Stage, and Decision Stage.

68. 68

    What is the purpose of the Input Stage in strategy formulation?

    To provide basic information needed for strategy formulation.

69. 69

    What are the main tools used in the Input Stage?

    Internal Factor Evaluation (IFE) Matrix, External Factor Evaluation (EFE) Matrix, and Competitive Profile Matrix (CPM).

70. 70

    What is the purpose of the IFE Matrix?

    To evaluate major internal strengths and weaknesses.

71. 71

    What are the steps in creating an IFE Matrix?

    List key internal factors, assign weights, assign ratings, multiply weight by rating, and compute the total weighted score.

72. 72

    How is an IFE Matrix interpreted?

    A score above 2.5 indicates a strong internal position; below 2.5 indicates a weak internal position.

73. 73

    What is the purpose of the EFE Matrix?

    To analyze external opportunities and threats and measure how effectively a firm responds to the external environment.

74. 74

    What are the categories of external factors considered in the EFE Matrix?

    Economic, Political, Technological, Competitive, Social, and Legal.

75. 75

    What is the purpose of the Competitive Profile Matrix (CPM)?

    To compare a firm with its competitors.

76. 76

    What factors are compared in a CPM?

    Market share, product quality, customer loyalty, technology, advertising, and distribution efficiency.

77. 77

    What is the purpose of the Matching Stage in strategy formulation?

    To align internal capabilities with external conditions.

78. 78

    What are the main tools used in the Matching Stage?

    SWOT Matrix, SPACE Matrix, BCG Matrix, IE Matrix, and Grand Strategy Matrix.

79. 79

    What are the components of a SWOT Analysis?

    Internal Factors (Strengths, Weaknesses) and External Factors (Opportunities, Threats).

80. 80

    What are the four strategic alternatives derived from a SWOT Matrix structure?

    SO Strategies (Use strengths to exploit opportunities), WO Strategies (Overcome weaknesses using opportunities), ST Strategies (Use strengths to avoid threats), and WT Strategies (Defensive strategies).

81. 81

    What is the goal of SO Strategies?

    To use strengths to exploit opportunities.

82. 82

    What is the goal of WO Strategies?

    To overcome weaknesses using opportunities.

83. 83

    What is the goal of ST Strategies?

    To use strengths to avoid threats.

84. 84

    What is the goal of WT Strategies?

    To implement defensive strategies.

85. 85

    What is the purpose of the SPACE Matrix?

    To determine the appropriate strategic posture of an organization and whether it should pursue aggressive, conservative, defensive, or competitive strategies.

86. 86

    What are the four dimensions of the SPACE Matrix?

    Financial Strength (FS), Competitive Advantage (CA), Industry Strength (IS), and Environmental Stability (ES).

87. 87

    How is the SPACE Matrix interpreted in terms of strategic posture?

    Aggressive strategies are for expansion, Defensive for retrenchment, Competitive for market penetration, and Conservative for cautious growth.

88. 88

    What types of strategies are associated with each quadrant of the SPACE Matrix?

    Aggressive, Competitive, Conservative, and Defensive.

89. 89

    What are the two main bases for classification in the BCG Matrix?

    Market growth rate and relative market share.

90. 90

    What are the four categories of the BCG Matrix and their meanings?

    Stars (High growth, high market share), Cash Cows (Low growth, high market share), Question Marks (High growth, low market share), and Dogs (Low growth, low market share).

91. 91

    What are the strategic implications for each BCG Matrix category?

    Invest in Stars, Maintain Cash Cows, Evaluate Question Marks, and Divest Dogs.

92. 92

    What are the primary uses of the BCG Matrix?

    Product portfolio management, strategic investment planning, and business unit evaluation.

93. 93

    What are the limitations of the BCG Matrix?

    It oversimplifies markets, focuses only on growth and share, and ignores external factors.

94. 94

    What does the IE Matrix combine?

    The IFE score and the EFE score.

95. 95

    What are the three strategy groups in the IE Matrix's Nine-Cell Matrix?

    Grow and Build, Hold and Maintain, and Harvest or Divest.

96. 96

    What are the strategic implications for each group in the IE Matrix?

    Grow and Build is for strong organizations, Hold and Maintain for moderate positions, and Harvest or Divest for weak positions.

97. 97

    What is the purpose of the Quantitative Strategic Planning Matrix (QSPM)?

    To objectively evaluate alternative strategies based on key internal and external factors.

98. 98

    What are the benefits of using the QSPM?

    It uses quantitative information, reduces bias, and supports rational decisions.

99. 99

    What are the steps in developing a QSPM?

    List key internal and external factors, assign weights, identify alternative strategies, determine attractiveness scores, compute total attractiveness scores, and choose the best strategy.

100. 100

     How is a QSPM interpreted?

     The strategy with the higher Total Attractiveness Score is the preferred strategy.

101. 101

     What influences strategic decisions from a behavioral perspective?

     Personal values, leadership styles, emotions, and organizational politics.

102. 102

     What are common problems related to behavioral considerations in strategy choice?

     Resistance to change, fear of uncertainty, and bias in decision-making.

103. 103

     What are political considerations in strategy choice?

     Different groups supporting different strategies, involving coalition building, lobbying, power struggles, and information manipulation.

104. 104

     What are examples of political behaviors in organizations?

     Coalition building, lobbying, power struggles, and information manipulation.

105. 105

     What are ethical considerations in strategy?

     Organizations should select strategies that are morally acceptable.