Identifying appropriate goals (What we want to do) then creating an organisationa plan which sets out the goals and specifies how managers will attain them
What is Strategy?
A cluster of decisions about what goals to pursue, what actions to take and how to use resources to achieve goals (How we're going to do it)
What is a Mission Statement
A broad declaration of an organisation's purpose (typically mentions products, customers, and how the organistion distinguishes itself for competitiors).
What are the levels of planning
Corporate level plan
Corporate level strategy
Lower level planning
What is corporate level plan
Top management's decisions about the organisation's mission, overall strategy, and structure.
Provides a framework for all other planning
What is corporate level strategy
A plan that says in which industries and national markets an organisation intends to compete
What is lower level planning
There are various options lower down the organisation, typically businnes/divisional, functional, or occasionally a mixture of the two.
What is functional level planning?
Department or unit where people have the same skills or use the same resources to perform their jobs( e.g. marketing, production, accounting, HR, corporate communication, etc).
Functional manager's decisions about the goals they propose to pursue to help the division attain its business-level goals.
Functional level strategy:
Can you complete this? (Hing: consider how a department could contribute to the division's competitive advantage)
Top management makes corporate plans, and approves business and functional plans
How long are plans?
Plans vary in length: long term = 5 years, medium term =1-5 years, Short term = less than 1 year, but pans are amended constantly in a rolling cycle
Why do plans matter?
Planning tell us where we are now and where we want to be, generates participation, a sense of direction and purpose, helps coordination, can be used as a control tool.
There is value in scenario (or contingency planning)
Why would mission statment change?
Mission statements may change to reflect new goals.
I.e. "facebook helps you connect and share with people in your life" (2008)
"facebook gives people the power to share and make the world more open and connected" (2009)
Formulating strategy involves
analysing the current situation then developing strategies to accomplish the mission and achieve goals.
Classis strategy analysis and formulation too is SWOT
What is porter's 5 forces model?
A classic strategy analysis and formula tool involving:
Bargaining power of suppliers
Bargaining power of customers
Threat of new entrants
Threat of substitute products
Competitive rivalry within an industry
Porter argued that wehen managers analyse opportunitites and threat they should pay particular attention to these five forces because they are the major threat that an organisation will encounter.
What is the difference in focus between SWOT and Porter's 5 forces?
SWOT has more focus on internal elements (strengths, weaknesses) as well as external elements (opportunitites, threats).
Porter's 5 forces focus on factors external to the firm.
What are Porter's views on formulating business-level strategies
1. Low cost strategy
3. "stuck in the middle"
4. Focused low-cost
5. Focused differentiation
Formulating corporate-level strategies involve
1. Concentrate on a single business
2. Diversification (related or unrelated)
3. Internal expansion
4. Vertical integration
Which of the follow are low risk options when opting for products and marketing for different national conditions?
A. Global Strategy
B. Multidomestic strategy
G. Strategic alliance
F. Joint venture
G. Wholly owned foreign subsidiary
What is the organisational structure?
A formal system of task and reporting relationships that coordinates and motivates organisational members so that they work together to achieve organisational goals.
What is a divisions (or business or product) structure and what does it look like?
What does a functional structure org chart look like?
What is does a matric structure and what is it based on?
The matrix goes against Fyols unity of command, it does not tend to work in practice but is good in theory.
Who uses Hybrid structures and what are the benefits of it?
The structure of a large organisation that has many divisions and simultaneously uses many different organisational structures. This is because:
1. Managers can select the best structure for a particular division
2. Breaking a large organisation into smaller units make it easier to manage.
what are some of the factors that affect organisational structure (hint there are 4)