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MGT Final
| Question | Answer |
|---|---|
| What is strategic management? | Goal-oriented, integrated, long-term actions aimed at competitive advantage and value creation. |
| What is competitive advantage? | Superior performance compared to competitors; above industry-average performance. |
| What is competitive parity? | When a firm performs about the same as competitors. |
| What is competitive disadvantage? | When a firm performs worse than competitors |
| What is the Red Queen Effect? | Firms keep copying competitors and "running faster" but do not actually improve their position. |
| Why is blind copying bad strategy? | It creates zero-sum competition and makes firms similar instead of distinctive |
| How does a firm escape the red queen effect? | Making distinctive strategies |
| Why was Southwest's strategy hard to copy? | Point-to-point routes, one aircraft type, few extras, adn fast turnaround all reinforced each other. |
| What is NOT strategy? | A grand statement, ignoring competitive challenges, or using isolated tactical tools. |
| What is stakeholder strategy | Managing value creation for groups with vested interests in the firm. |
| What are economic responsibilities | Increase shareholder value, repay debts, and provide safe products at reasonable prices. |
| What are legal responsibilities | Follow laws and regulations |
| What are ethical responsibilities | Do what is morally right beyond legal compliance |
| What are philanthropic responsibilities | Voluntary actions that benefit society |
| What is the AFI framework? | Analysis, Formulation, Implementation |
| What happens in strategy analysis? | Define strategy, examine leaders, mission/vision/ and compeititve advantage |
| What happens in strategy formulation? | Decide business, corporate, and global strategy |
| What happens in strategy Implementation | Execute through organizational design and business models. |
| What is firm structure? | The formal arrangement of roles, authority, ownership, board, and executives |
| Why does firm structure matter? | It determines who makes decisions and shapes risk-taking, innovation, and strategy. |
| What is corporate governance? | Rules and practices for direction, control, and balancing stakeholder interests. |
| What are the main elements of corporate governance? | Boards, CEO's. divisional managers, shareholders, stakeholders |
| What does the board of directors do? | Hirest/fires CEO, monitors management, approves major strategic decisions, governs/controls |
| What is CEO duality? | When the CEO and board chair are the same |
| Argument for CEO duality | Unifiied leadership and faster decision making esp in times of crisis |
| Argument against CEO duality | Weak monitoring, CEO entrenchment, and higher misconduct risk |
| Where is CEO duality common? | Founder-led firms, exceptional leaders, high-uncertainty environments. |
| What is agency theory | Conflict of interest or misalignment btwn managers and owners/stakeholders |
| Volkswagen agency problem example | Managers cheated emission standards to meet performance coeas, causing huge fines. |
| Remedies for agency problems | Strict monitoring and incentives |
| What is a lead independent director? | An independent board leader who helps monitor management when CEO power is high. |
| Why do behavioral theories matter? | Managers are not perfectly rational or free from limits/biases |
| Behavioral Theory of the Firm main idea | FIrms are complex coalititons of people wiht competing goals, not pure rpofit maximizers. |
| What is bounded rationality? | Decision makers have limited information, time , and cognative ability |
| What is satisficing? | Choosing a "good enough" option instead of the perfect/profit-maximizing one |
| What are routines? | Repeated organizational patterns that guide behavior |
| Risk of too many routines? | Blind spots and inability to adapt |
| What are political coalitions? | Internal groups with different goals and interests compteting for influence |
| What is organizational slack? | Extra resources that give a firm cushion but may also reduce efficiency |
| Criticism of BTF | Better at explaining behavior than prdicting it; may ignore outside influence |
| Upper Echelons Theory main idea | Firm outcomes reflect characteristics of top executives |
| Upper Echelons focuses on what? | "Who makes strategy, not just "what" the best strategy is |
| Ececutive characteristics that shape strategy | Tenure, functional background, demographics, psychology |
| Examples of phychological traits in executives | Machiavellianism and narcissism |
| What is internal analysis? | Looking inside the firm to identify resources capabilities and strengths |
| Why does IA matter? | Firms in the same industry perform differently because of internal differences |
| Resource-Based View main idea | Firms are bundles of resources and capabilities |
| Resource heterogeneity | Fimrs have different resources, causing perfomance differences |
| VRIN stands for | Valuable, Rare, Imperfectly imitabile, and Non renewable |
| What makes a resource valuable? | It helps the firm exploit opportunities or reduce threats. |
| What makes a resource rare? | Few competitors possess it. |
| What makes a resource imperfectly imitable? | Competitors cannot easily copy it. |
| What does a non-renewable mean in VRIN? | Competitors cannot simply recreate or replace the resource easily |
| If a resource misses one VRIN dimension | Its competitive impact is weakened |
| Tangible resources | Visible physical/financial assets like factories, cash, infrastructure |
| Intangible resources | Brand, culture, reputation, intellectual property |
| Why are intangible resources often strategic? | They are harder to imitate. |
| Knowledge-Based View main idea | Knowledge is the most strategically important resource |
| Explicit knowledge | Formal/documentend knowledge like manuals and patents |
| Tacit knowledge | Experience-based, intuitive knowledge, harder to transfer |
| Resource vs. capability | Resources are what a firm owns; capabilitites |
| Resource vs. capability | Resourcse are what a firm owns; capabilities are how it uses them |
| Knowledge spillover | unintentional diffusion of knowledge outside the firm |
| Dynamic capabilites | Sensing, seizing, and reconfiguring to survive dynamic environments |
| RBV vs KBV vs DC | RBV = resources; KBV = knowledge; DC = adapting in dynamic environments |
| Porters generic strategies | Cost, leadership, differentiation, focus |
| Cost leadership strategy | Becoming the lowest-cost producer in the industry |
| Goal of cost leadership | offer lower prices while maintaining profitability and gaining maket share |
| Cost leadership examples | Walmart, Southwest, McDonanld's, Toyota |
| Key sources of cost leadership | Economies of scale, learning curve, efficiency, cost control, supply chain management |
| IKEA cost leaderhsip example | Flat-pack, ready to assemble standardized products, global sourcing |
| Misconception: low cost means low quality | false cost leaders usually need acceptable quality |
| When cost leadership fails | Customers value uniqueness, innovation is rapid, or the market is luxury/premo |
| Differentiation | Offering products/services perceived as unique |
Created by:
buetab