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Organizational Management ch 6 vocab

Terms in this set (40)

Planning
1. determining an organization's mission and goals
2. formulating strategy
3. implementing strategy

identifying and selecting appropriate goals and courses of action; one of the four principal tasks of management
Strategy
A cluster of decisions about what goals to pursue, what actions to take, and how to use resources to achieve goals
Mission Statement
A broad declaration of an organization's purpose that identifies the organization's products and customers and distinguishes the organization from its competitors
Why Planning Is Important
1. Necessary to give the organization a sense of direction and purpose
2. A useful way of getting managers to participate in decision making about the appropriate goals and strategies for an organization
3. Helps coordinate managers of the different functions and divisions of an organization to ensure that they all pull in the same direction and work to achieve its desired future state
4. Used as a device for controlling managers within an organization
corporate-level plan
Top management's decisions pertaining to the organization's mission, overall strategy, and structure
corporate-level strategy
a plan that indicates in which industries and national markets an organization intends to compete
business-level plan
Divisional managers' decisions pertaining to divisions' long-term goals, overall strategy, and structure
business-level strategy
A plan that indicates how a division intends to compete against its rivals in an industry
functional-level plan
Functional managers' decisions pertaining to the goals that they propose to pursue to help the division attain its business-level goals
functional-level strategy
A plan of action to improve the ability of each of an organization's functions to perform its task-specific activities in ways that add value to an organization's goods and services
time horizon
the intended duration of a plan.
long term - more than 5 yrs
intermediate term - 1 to 5 yrs
short term - 1 yr or less
standing plan
used in situations in which the programmed decision making is appropriate
single-use plan
developed to handle nonprogrammed decision making in unusual or one of a kind situations
programs- integrated sets of plans for achieving certain goals
projects- specific action plans created to complete various aspects of a program
scenario planning
learning tool that raises the quality of the planning process and can bring real benefits to an organization
strategic leadership
the ability of the CEO and top managers to convey a compelling vision of what they want the organization to achieve to their subordinates
strategy formulation
the development of a set of corporate, business, and functional level strategies that allow an organization to accomplish its mission and achieve its goals
SWOT analysis
a planning exercise in which managers identify organizational strengths and weaknesses and environmental opportunities and threats
five forces model
Potential threats in the external environment
1. threat of entry of new competitors
2. intensity of competitive rivalry
3. threat of substitute products or services
4. bargaining power of buyers (customers)
5. bargaining power of suppliers
hypercompetition
permanent, ongoing, intense competition brought about in an industry by advancing technology or changing customer tastes
low-cost strategy
driving the organization's costs down below the cost of its rivals
differentiation strategy
distinguishing an organization's products from the products of competitors on dimensions such as product design, quality, or after-sales service
focused low-cost strategy
serving only one segment of the overall market and trying to be the lowest cost organization serving that segment
focused differentiation strategy
serving only one segment of the overall market and trying to be the most differentiated organization serving that segment
concentration on a single industry
reinvesting a company's profits to strengthen its competitive position in its current industry
vertical integration
expanding a company's operations either backward into an industry that produces inputs for its products or forward into an industry that uses, distributes, or sells its products.
diversification
expanding a company's business operations into a new industry in order to produce new kinds of valuable goods or services
related diversification
entering a new business or industry to create a competitive advantage in one or more of an organization's existing divisions or businesses.
synergy
performance gains that result when individuals and departments coordinate their actions
unrelated diversification
entering a new industry or buying a company in a new industry that is not related in any way to an organization's current businesses or industries
global strategy
selling the same standardized product and using the same basic marketing approach in each national market
multidomestic strategy
customizing products and marketing strategies to specific national conditions
portfolio strategy
apportioning financial resources among divisions to increase financial returns or spread risks among different businesses.
reason for pursuing unrelated diversification
exporting
making products at home and selling them abroad
importing
selling products at home that are made abroad
licensing
allowing a foreign organization to take charge of manufacturing and distributing a product in its country or world region in return for a negotiated fee
franchising
selling to a foreign organization the rights to use a brand name and operating know-how in return for lump-sum payment and a share of the profits
strategic alliance
an agreement in which managers pool or share their organization's resources and know-how with a foreign company, and the two organizations share the rewards and risks of starting a new venture
joint venture
a strategic alliance among two or more companies that agree to jointly establish and share the ownership of a new business
wholly owned foreign subsidiary
production operations established in a foreign country independent of any local direct involvement.
strategy implementation
1. allocation responsibility for implementation to the appropriate individuals or groups
2. drafting detailed action plans that specify how a strategy is to be implemented
3. establishing a timetable for implementation that includes precise, measurable goals linked to the attainment of the action plan
4. allocating appropriate resources to the responsible individuals or groups
5. holding specific individuals or groups responsible for the attainment of corporate, divisional, and functional goals
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