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Grammar

Who – People That –Things

They’re – Their

Subject-Verb Disagreement (those kind, profits has)

Preposition at end of sentence: (several to choose from)

MGT 4153Dr. Rebecca Long

Strategy & Effectiveness

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Role in Strategic Direction

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Organizational goal is a desired state of affairs that the organization attempts to reach. Top executives decide organizational goals.Q1: A company’s strategic intent or direction reflects managers’ systematic analysis of organizational and environmental factors. Agree or Disagree? (58)Organizational design is the administration and execution of the strategic plan.

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Strategic Intent

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Means that all the organization’s energies and resources are directed toward a focused, unifying and compelling overall goal. Three aspects related to strategic intent are the mission, core competencies and competitive advantage.Mission – reason for existence.Mission statement communicates to current and prospective employees customers, investors, suppliers and competitors what the organization stands for and is trying to achieve.

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"The Coca-Cola Promise: The Coca-Cola Company exists to benefit and refresh everyone it touches. The basic proposition of our business is simple, solid, and timeless. When we bring refreshment, value, joy and fun to our stakeholders, then we successfully nurture and protect our brands, particularly Coca-Cola. That is the key to fulfilling our ultimate obligation to provide consistently attractive returns to the owners of our business."

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Our Mission StatementThe mission of Southwest Airlines is dedicationto the highest quality of Customer Servicedelivered with a sense of warmth, friendliness,individual pride, and Company Spirit.

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Question 2: The best business strategy is to make products and services as distinctive as possible to gain an edge in the marketplace. (Agree or Disagree) (pg. 69)

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Core Competence or Competencies

Something the organization does especially well in comparison to its competitors. (Ex: superior R&D, tech skills, exceptional customer service)

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Competitive Advantage

What sets the organization apart from others and provides it with a distinctive edge for meeting customer or client needs in the marketplace. (Walgreens)

Operative Goals represent the primary tasks of the organization where official or overall goals describe more of a value system.

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Framework for Selecting Strategy and Design

A strategy is a plan for interacting with the competitive environment to achieve organizational goals. Goals are where the organization wants to go and strategies define how it plans to get there.

Two models for formulating competitive strategies are the Porter model and Miles and Snow’s strategy typology.

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Porter: Forces that determine a company’s position in relation to

competitors in the industry:

• Threat of new entrants (Nike, Under Armour)

• Power of suppliers (Nielson Company & TiVo)

• Power of buyers (Walmart)• Threat of substitutes (Pharmaceutical

companies, telephone)• Rivalry among existing competitors (Coke

and Pepsi)

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Differentiation strategy – Organizations try to distinguish their products or services from others in the industry. (Apple)

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Porter’s Competitive Strategies(page 68)

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Low-Cost Leadership: Concentrates internally on cost reduction and efficiency

Differentiation: Concentrates externally on quality and customer perceptions

Focus: Concentrates cost or differentiation by geographic or buyer group

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Porter’s Competitive Strategies

Scope Advantage Strategy Example

Broad Low CostLow-Cost

Leadership Dell Computer

Broad Uniqueness DifferentiationStarbucksCoffee Co.

Narrow Low CostFocused Low-

CostLeadership

EnterpriseRent-a-Car

Narrow UniquenessFocused

DifferentiationRolex

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Miles & Snow’s Strategy Typology

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Prospector: Innovation, risks, new opportunities, and growth (Nike, Facebook, Google, MySpace)

Defender: Risk avoidance, stability/retrenchment, efficiency, and control (Paramount)

Analyzer: Core stability, peripheral innovation, diverse approach depending on product (Midway between Prospector and Defender – [Amazon.com])

Reactor: No mission, goals, strategy (No strategy at all!) (Dell)

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Question 3: The best measures of business

performance are financial. (Agree or Disagree) (page 79)

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Contingency Approaches to the Measurement of Organizational Effectiveness

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Organization

Internalactivities

andprocesses

ResourceInputs

Product andServiceOutputs

Resource-based

approach

Internalprocessapproa

ch

Goalapproa

ch

External Environment

Four Models of Effectiveness Values

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Human Relations Emphasis

Primary Goal: human resource developmentSubgoals: cohesion, morale, training

Internal Process Emphasis

Primary Goal: stability, equilibrium

Subgoals: information management, communication

Rational Goal Emphasis

Primary Goal: productivity, efficiency, profit Subgoals: planning, goal setting

Open Systems Emphasis

Primary Goal: growth, resource acquisitionSubgoals: flexibility, readiness, external evaluation

Flexibility

Control

Internal External

STRUCTURE

FOCUS