Grammar

Who – People That –Things They’re –Their Subject-Verb Disagreement (those kind, profits has) Preposition at end of sentence: (several to choose from) 1 Long

MGT 4153 Dr. Rebecca Long

Role in Strategic Direction

Organizational goal is a desired state of affairs that the organization attempts to reach. Top executives decide organizational goals.

Q1: A company’s strategic intent or direction reflects managers’ systematic analysis of organizational and environmental factors. Agree or Disagree? (58)

Organizational design is the administration and execution of the strategic plan. 3 Long

Strategic Intent

Means that all the organization’s energies and resources are directed toward a focused, unifying and compelling overall goal. Three aspects related to strategic intent are the mission, core competencies and competitive advantage.

Mission – reason for existence.

Mission statement communicates to current and prospective employees customers, investors, suppliers and competitors what the organization stands for and is trying to achieve.

4 Long

"The Coca-Cola Promise: The Coca-Cola Company exists to benefit and refresh everyone it touches. The basic proposition of our business is simple, solid, and timeless. When we bring refreshment, value, joy and fun to our stakeholders, then we successfully nurture and protect our brands, particularly Coca-Cola. That is the key to fulfilling our ultimate obligation to provide consistently attractive returns to the owners of our business." 5 Long

Our Mission Statement

The mission of Southwest Airlines is dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit.

6 Long

Question 2: The best business strategy is to make products and services as distinctive as possible to gain an edge in the marketplace. (Agree or Disagree) (pg. 69)

7 Long

Core Competence or Competencies Something the organization does especially well in comparison to its competitors. (Ex: superior R&D, tech skills, exceptional customer service) 8 Long

Competitive Advantage

What sets the organization apart from others and provides it with a distinctive edge for meeting customer or client needs in the marketplace. (Walgreens) Operative Goals represent the primary tasks of the organization where official or overall goals describe more of a value system.

9 Long

Framework for Selecting Strategy and Design

A strategy is a plan for interacting with the competitive environment to achieve organizational goals. Goals are where the organization wants to go and strategies define how it plans to get there.

Two models for formulating competitive strategies are the Porter model and Miles and Snow’s strategy typology.

10 Long

Porter: Forces that determine a company’s position in relation to competitors in the industry:

• • • • • Threat of new entrants (Nike, Under Armour) Power of suppliers (Nielson Company & TiVo) Power of buyers (Walmart) Threat of substitutes (Pharmaceutical companies, telephone) Rivalry among existing competitors (Coke and Pepsi) 11 Long

Differentiation strategy

distinguish their products or services from others in the industry. (Apple) – Organizations try to 12 Long

Porter’s Competitive Strategies

(page 68)  Low-Cost Leadership: Concentrates internally on cost reduction and efficiency  Differentiation: Concentrates externally on quality and customer perceptions  Focus: Concentrates cost or differentiation by geographic or buyer group 13 Long

14

Porter’s Competitive Strategies

Scope

Broad Broad Narrow Narrow

Advantage

Low Cost Uniqueness Low Cost Uniqueness

Strategy Example

Low-Cost Leadership Differentiation Focused Low-Cost Leadership Focused Differentiation Dell Computer Starbucks Coffee Co.

Enterprise Rent-a-Car Rolex Long

15

Miles & Snow’s Strategy Typology

 Prospector: Innovation, risks, new opportunities, and growth (Nike, Facebook, Google, MySpace)  Defender: Risk avoidance, stability/retrenchment, efficiency, and control (Paramount)  Analyzer: Core stability, peripheral innovation, diverse approach depending on product (Midway between Prospector and Defender – [Amazon.com])  Reactor: No mission, goals, strategy (No strategy at all!) (Dell) Long

16 Long

Question 3: The best measures of business performance are financial.

(Agree or Disagree) (page 79)

Contingency Approaches to the Measurement of Organizational Effectiveness 17 Long External Environment Resource Inputs Resource-based approach Organization Internal activities and processes Internal process approach Product and Service Outputs Goal approach

18

Four Models of Effectiveness Values

STRUCTURE Flexibility F O C U S Internal Human Relations Emphasis Primary Goal: human resource development Subgoals: cohesion, morale, training Internal Process Emphasis Primary Goal: stability, equilibrium Subgoals: information management, communication Control Open Systems Emphasis Primary Goal: growth, resource acquisition Subgoals: flexibility, readiness, external evaluation Rational Goal Emphasis Primary Goal: productivity, efficiency, profit Subgoals: planning, goal setting External Long