Strategic Management

“Strategic Management” ENG
Midterm questions for BMA 6-7-8-9E

1. 
   Distinguish between the concepts of vision and mission.
   Mission statements are "enduring statements of purpose that distinguish one business from other similar firms." Vision statements answer the question "What do we want to become?" A vision statement should be one sentence, whereas a mission statement is several sentences, but less than 200 words.
   
   
2. 
   Your institute has fierce competitors. List three external opportunities and three external threats that face your institute.
   

1. Economic (Tuition hike, wage increase)
2. Social / Cultural (Opening to foreigners)
3. Technological (Data Science Age)

3. 
   List three internal strengths and three internal weaknesses that characterize your institute
   

4. 
   List reasons why objectives are essential for organizational success.
   Objectives are essential for organizational success because they state direction, aid in evaluation, create synergy, reveal priorities, focus coordination, and provide a basis for effective planning, organizing, motivating, and controlling activities.
   

5. 
   List 10 guidelines for making the strategic-planning process effective. Arrange your guidelines in prioritized order of importance in your opinion.
   1. It should be a people process more than a paper process.
   

2. It should be a learning process for all managers and employees.
3. It should be words supported by numbers rather than numbers supported by words.
4. It should be simple and nonroutine.
5. It should vary assignments, team memberships, meeting formats, and even the planning calendar.
6. It should challenge the assumptions underlying the current corporate strategy.
7. It should welcome bad news.
8. It should welcome open-mindness and a spirit of inquiry and learning.
9. It should not be a bureaucratic mechanism.
10. It should not become ritualistic, stilted, or orchestrated.
11. It should not be too formal, predictable, or rigid.
12. It should not contain jargon or arcane planning language.
13. It should not be a formal system for control.
14. It should not disregard qualitative information.
15. It should not be controlled by “technicians.”
16. Do not pursue too many strategies at once.
17. Continually strengthen the “good ethics is good business” policy

6. 
   What is the fundamental difference between business strategy and military strategy in terms of basic assumptions?
   

The study of strategic management is based on a strong military legacy. Terms such as goals, mission, strengths and weaknesses were first formulated to address problems on the battlefield. The key goal of both business and military strategy is "to gain a competitive advantage." The fundamental difference between military and business strategy is that business strategy is formulated, implemented, and evaluated in terms of competition, whereas military strategy is based on the assumption of conflict. However, military conflict and business competition are so similar that many strategic management techniques are equally applicable to both. Business strategists have access to valuable information that military thinkers have refined over time. Excellent strategy formulation and implementation can overcome the enemy's numerical superiority in numbers and resources. Both business and military organizations must adapt to change and continually improve to be successful.

7. 
   Why strategy implementation often is considered the most difficult stage in the strategic-management process?
   Implementing strategy affects an organization from top to bottom; it affects all the functional and divisional areas of a business. Implementing strategy means mobilizing employees and managers to put formulated strate_gies into action. Often considered to be the most difficult stage in strategic management, strategy implementation requires personal discipline, commitment, and sacrifice. Strategies formulated but not implemented serve no useful purpose. Interpersonal skills are especially critical for successful strategy implementation. Strategy-implementation activities affect all employees and managers in an organization. Every division and department must decide on answers to questions, such as “What must we do to implement our part of the organization’s strategy?” and “How best can we get the job done?” The challenge of implementation is to stimulate managers and employees throughout an organization to work with pride and enthusiasm toward achieving stated objectives.
   

8. 
   Explain the importance of a vision and a mission statement.
   

An organization that fails to develop a vision statement as well as a comprehensive and inspiring mission statement loses the opportunity to present itself favorably to existing and potential stakeholders. The vision and mission statements are effective vehicles for communicating with important internal and external stakeholders. The principal benefit of these statements as tools of strategic management is derived from their specification of the ultimate aims of a firm:
They provide managers with a unity of direction that transcends individual, parochial, and transitory needs.
They promote a sense of shared expectations among all levels and generations of employees.
They consolidate values over time and across individuals and interest groups.
They project a sense of worth and intent that can be identified and assimilated by company outsiders.
Finally, they affirm the company’s commitment to responsible action, which is symbiotic with its need to preserve and protect the essential claims of insiders for sustained survival, growth, and profitability of the firm.

9. 
   Discuss relationships among objectives, strategies, and policies.
   

Policies are instruments for strategy implementation. Whatever their scope and form, policies serve as a mechanism for implementing strategies and obtaining objectives.
They represent the means for carrying out strategic decisions. Examples of policies that support a company strategy, a divisional objective, and a departmental objective:
Company Strategy
Acquire a chain of retail stores to meet our sales growth and profitability objectives.
Supporting Policies
“All stores will be open from 8 A.M. to 8 P.M. Monday through Saturday.” (This policy could increase retail sales if stores
currently are open only 40 hours a week.)
Divisional Objective
Increase the division’s revenues from $10 million in 2009 to $15 million in 2010.
Supporting Policies
“Beginning in January 2010, each one of this division’s salespersons must file a weekly activity report that includes the number of calls made, the number of miles traveled, the number of units sold, the dollar volume sold, and the number of new accounts
opened.” (This policy could ensure that salespersons do not place too great an emphasis in certain areas.

10. 
    Who are the major competitors of your institute? What are their strengths
    and weaknesses? What are their strategies?
    

11. 
    What do you believe are some potential pitfalls or risks in using a strategic-management approach to decision making?
    

Most projects are initially misjudged in terms of timelines and budgets. Leaders are overly optimistic and do not think about the culprit problems (risks). They pay the price for this: they spend too much effort on dealing with the consequences of the materialization of risks. As a result, the planned project period is exceeded several times. In practice, there is a gap between the information needed to make effective strategic decisions and what kind of insights companies actually generate. The development of a strategic approach to company management determines that the company must have at least a few professionals who are actively involved in monitoring and assessing strategic environmental factors.

12. 
    Why is it that a firm can normally sustain a competitive advantage for only a limited period of time?
    

To sustain the competitive advantage gained by being the first mover, such a firm also needs to be a fast learner. Risks associated with being the first mover, such as unexpected and unanticipated problems and costs that occur from being the first firm doing business in the new market. Therefore, being a slow mover can be effective when a firm can easily copy or imitate the lead firm’s products or services. If technology is advancing rapidly, slow movers can often leapfrog a first mover’s products with improved second-generation products. However, slow movers often are relegated to relying on the first mover being a slow mover and making strategic and tactical mistakes.

13. 
    How can a firm best achieve sustained competitive advantage?
    

A firm achieve sustained competitive advantage by (1) continually adapting to changes in external trends and events and internal capabilities,
competencies, and resources; and by (2) effectively formulating, implementing, and evaluating strategies that capitalize upon those factors.

14. 
    List four financial and four nonfinancial benefits of a firm engaging in strategic planning.
    

Businesses engaging in strategic planning experience many financial benefits, including: 1) significant improvement in sales, profitability, and productivity compared to firms without strategic planning activities, 2) superior long-term financial performance relative to their industry, 3) seem to make more informed decisions with good anticipation of both short and long-term consequences, and 4) better prepared for fluctuations in their external and internal environments. Nonfinancial Benefits
Besides helping firms avoid financial demise, strategic management offers other tangible benefits, such as an enhanced awareness of external threats, an improved understanding of
competitors’ strategies, increased employee productivity, reduced resistance to change, and a clearer understanding of performance–reward relationships.

15. 
    If your company does not have a vision or mission statement, describe a good process for developing these documents.
    

Select several articles and/or web sites about these statements and ask all managers to read these as background information. Then, managers should prepare a vision or mission

16. 
    Explain how developing a mission statement can help resolve divergent views among managers in a firm.
    

Negotiation, compromise, and eventual agreement on important issues is needed in forming or revising a mission statement. Then, managers can "be on the same page" and focus on more specific strategy formulation activities.

17. 
    Drucker says the most important time to seriously reexamine the firm’s vision/mission is when the firm is very successful. Why is this?
    

The most important time to ask seriously "What do we want to become?" and "What is our business?" is when a company has been successful. Success obsoletes the very behavior that achieved it, and creates new realities and different problems. A very successful firm is the target of rival firms who try to imitate, duplicate, reverse engineer their products, and take market share from the leading firms.

18. 
    Explain why a mission statement should not include monetary amounts, numbers, percentages, ratios, goals, or objectives
    

A mission statement is broad in scope for three reasons. First, it allows for the generation and consideration of a range of feasible alternative objectives and strategies without unduly stifling management creativity. Excess specificity would limit the potential of creative growth for the organization. Second, a mission statement needs to be broad to reconcile differences among, and appeal to, an organization's diverse stakeholders. Thus, a mission statement should be reconciliatory. Third, it is simply premature in the mission statement to reveal goals and objectives, which should be determined after the internal and external assessment, as illustrated in the comprehensive strategic planning model.

19. 
    Discuss the meaning of the following statement: “Good mission statements identify the utility of a firm’s products to its customers.”
    

A good mission statement reveals an organization’s customers; products or services; markets; technology; concern for survival, growth, and profitability; philosophy; self-con_cept; concern for public image; and concern for employees. These nine basic components serve as a practical framework for evaluating and writing mission statements. As the first step in strategic management, the vision and mission statements provide direction for all planning activities

20. 
    Distinguish between the “self-concept” and the “philosophy” components in a mission statement. Give an example of each for your university
    

The self-concept component of a mission statement describes a firm’s distinctive competence or major competitive advantage. The philosophy component of a mission statement refers to the basic beliefs, values, aspirations, and ethical priorities of the firm. Self-Concept: Our Institute is consistently ranked as one of the top universities for graduate education in the Republic of Uzbekistan. Philosophy: Be Smart! Be Skilled! Be Professional!

21. 
    When someone or some company is “on a mission” to achieve something, many times they cannot be stopped. List three things in prioritized order that you are “on a mission” to achieve in life.
    

1) To daily eat healthy. 2) To daily be a good steward of the natural environment.
3) To daily build up rather than break down people.

22. 
    Compare and contrast vision statements with mission statements in terms of composition and importance.
    

Many organizations develop both a mission statement and a vision statement. Whereas the mission statement answers the question, "What is our business?" the vision statement answers the question, "What do we want to become?" Both statements are essential for firm success. The vision is one sentence, whereas the mission is several sentences, and includes nine components.

23. 
    Why do you think organizations that have a comprehensive mission tend to be high performers? Does having a comprehensive mission cause high performance?
    

Having a comprehensive mission statement does not guarantee or cause high performance. However, a comprehensive mission statement can contribute significantly to high performance, because ideally it conveys the intent and aspirations of all employees and managers who by working together achieve synergy. Having an excellent mission statement also provides a firm foundation for effective strategic planning, rather than ad hoc guessing about what actions would be best to take in the future.

24. 
    Explain why a mission statement should not include strategies and objectives.
    

25. 
    Explain the principal value of a vision and a mission statement
    The process of developing a vision and mission statement represents a great opportunity for strategists to obtain needed support from all managers in the firm. Differenth between the terms vision and mission, vision is “a possible and desirable future state of an organization” that includes specific goals, whereas mission is more associated with behavior and the present.
    

26. 
    In your opinion, what are the three most important components that should be included when writing a mission statement? Why?
    

According to Chris Bart, professor of strategy and governance at McMaster University, a commercial mission statement consists of three essential components: Key market: the target audience. Contribution: the product or service. Distinction: what makes the product unique or why the audience should buy it over another.

27. 
    How would the mission statements of a for-profit and a nonprofit organization differ?
    

As the Houston Chronicle's James Green writes, "While the aim of for-profit organizations is to maximize profits and forward these profits to the company's owners and shareholders, nonprofit organizations aim to provide society's needs. Non-profit organizations have no owners

27. 
    Write a vision and mission statement for an organization of your choice.
    

Mission statements define your organization's purpose and its primary objectives. They are set in the present tense, and explain why you exist as a business, both to members of your organization and to people outside it. Mission statements tend to be short, clear and powerful.
Vision statements also define your organization's purpose, but they focus on its goals and aspirations. These statements are designed to be uplifting and inspiring. They're also timeless: even if the organization changes its strategy, the vision will often stay the same.

27. 
    List seven characteristics of a mission statement.