Exam1 study guide | Course Paper

MGMT 3013

Strategic Management: Study Guide

You are expected to know all the articles and videos that were assigned in class. In addition, please pay

specific attention to the following:

Chapter 1

a. What is strategy and what are its characteristics?

i. strategy: the set of decisions and actions of firm managers to ensure the future

success of the firm

1. integrated and coordinated set of commitments and actions designed to

exploit core competencies and gain a competitive advantage

a. exploiting core competencies – leveraging what you’re best at

ii. focuses on future

iii. focuses on success

1. usually means profitability and future financial resources (not always –

ex: nonprofits)

2. generally measured through financial performance

b. Difference between corporate and business strategy.

i. corporate strategy: what industries should we compete in?

1. doesn’t answer how we compete in a given industry

ii. business strategy: how should we compete in our chosen industries?

c. The Global Economy and Technological Changes. What are they? How they are altering

the strategic landscapes? What is technological diffusion?

i. global economy: goods, services, people, skills, and ideas move freely across

geographic borders

ii. globalization: increasing economic interdependence among countries and their

organizations as reflected in the flow of goods, services, people, financial

capital, knowledge, etc. across geographic borders

1. benefits: led to higher performance standards with respect to multiple

competitive dimensions

a. quality

b. cost

c. productivity

d. product introduction time

e. operational efficiency

2. risks:

a. “liability to foreignness”: term describing the risks of competing

outside a firm’s domestic markets

iii. technology diffusion: speed at which new technologies become available to

firms and when firms choose to adopt them

d. What is knowledge intensity? How has it affected businesses and decision making in

businesses?

i. knowledge: information, intelligence, and expertise (intangible resource)

1. basis of technology and its application

2. increasingly valuable source of competitive advantage

ii. necessary to create innovations

iii. potential for spillovers to competitors

1. must move quickly to use knowledge productively

e. What are stakeholders? Why are they important? What role do they play in strategic

management?

i. stakeholders: individuals/entities who may be affected by or affect the firm’s

outcomes

1. individuals, groups, and organizations that can affect the firm’s vision

and mission, are affected by the strategic outcomes achieved, and have

enforceable claims on the firm’s performance

2. ability to withhold participation that is essential to the firm’s survival,

competitiveness, and profitability is the source of stakeholders’ ability

to enforce their claims against an organization

f. What are strategic leaders? What is their role?

i. strategic leadership: the ability to anticipate, envision, maintain flexibility, and

empower others to create strategic change as necessary

ii. involves managing through others, managing and entire organization rather

than a functional subunit, and coping with the rapid and intense changes

associated with the global economy

1. role: ensuring the long-term survival of the firm by staking a position in

the competitive landscape

a. strategic leaders influence the behaviors, thoughts, and feelings

of those with whom they work

b. ability to attract and manage human capital is critical

c. create and support the context or environment through which

stakeholders can perform at peak efficiency

d. appropriate resource allocations

e. risk taking and risk management

f. contributing to a conducive organization culture and norms

g. Make sure you know what is meant by above average returns.

i. above average returns: returns which are better than average for that industry

after adjusting for riskiness of the firm (exceeds expectations)

1. based on a variety of factors – riskiness of a firm

2. can be earned by producing either standardized products at costs below

those of competitors (cost leadership strategy) or by producing