STRATEGIC MAGEMENT 9. Consultation

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1. Basic conceptsWhich legal forms of enterprises do you know? What is the

difference in the liability of their owners?What are considered small, medium, and large size

enterprises? (9)What is the most frequent form of a firm’s life cycle?

(figure)What are the management functions according to H. Fayol?What is the mission of an enterprise? Give two examples as

well.What are the most important connections among a

mission, a strategy and the operative plans? (figure) (19)What is the blue banana? (25)How can you characterise the growth (GDP/capita) of the

Hungarian economy in international comparison?2

2. Strategic planningWhat are the main goals of an enterprise? What is the

economic role of a value chain?What are the main characteristics of a competitive market? What is the SWOT model? How does Porter complete the

SWOT model?What are the main types of competitors (according to M.

Porter)? (14)What types of (business) strategy do you know? (~17)What is the more frequent form of a product life cycle? (figure)What does the BCG growth-share matrix look like? What can

planners conclude on the basis of this matrix? (19-21)What is the content of a (yearly) business plan of a small firm? How do authors make distinctions between growth and

development?How can the competitiveness of a country be measured?What is the activity rate? Why is it important in Hungary? (28)

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Example: Hungarian tourism strategies In spite of the great number of concepts on the Hungarian tourism

development, the national strategy is confused. The main problems are the following:

• The concepts’ information base is questionable. The statistics on domestic tourism are incomplete; the number of visitors of many attractions is unknown.

• Main decision-makers are ministery officers, and many stakeholders can not participate on the decision-making on development objectives.

• Some objectives are irrational (e.g. decisions on the construction of new baths, hydro-hotels in small villages, or on the liquidation of the Budapest amusement park).

• The selection of development tools is inefficient. Often the main tools are tax allowances, although the main causes of the poor tourism supply are the bureaucracy and the corruption (e.g. the corrupt hygienic control).

• Often the control of the development actions is not organised.

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3. Techniques of strategic planning(continuation)

What information sources of a firm’s planning do you know?

What is the brainstorming? And the Delphi technique?What is the goal of the Balanced Scorecard?How do we calculate expected value of a future value?Why do planners develop scenarios? What methods does

the EU recommend for their development? (11)What figure has the GE Nine-Cell matrix?What tools does a firm use to influence the demand of

their products?What is the content of a SME’s business plan? What is the reason, and what are the main principles of

the corporate governance?5

4. Strategy implementationWhat types of firm’s implementation strategies (according to Farkas-

deBacker) do you know? (2-3-4-5)What are the techniques of the modern human resources management?What is a learning organisation? How can be determined the break-even point ? Why is its non-linear form

important? (2 figures) (11)How can be determined the rational proportions of the utilisation of two

factors of production? (figure)What is a flow-chart (Gantt diagram)? (17)How can the critical path be determined?Why the monitoring of the implementation is important?What are the main determinants of the reliability of an enterprise survey?What are the main factors braking the growth of the Hungarian firms?

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5. Innovation strategiesWhat are the definitions of R&D and innovation? (2)What types of institutions are the main actors in the National

Innovation System? And in the Triple Helix?Why is the innovation important in the modern economies?What are the main methods of the knowledge creation?Which methods can be used to collect innovation ideas?In what phases of firms’ life are innovations the most important?

Why?What is a spin-off? Why are they important in Europe? (17)What is the goal of a knowledge audit, and a knowledge map?What are the main methods of IP protection?What is the European Paradox? What are the data proving it?

(22)What were the economic objectives of the EU in the last decade?

In what documents were they fixed?Why is the innovation willingness low in Hungary? 7

Case study on allowances of R & D taxSince 2004 Hungarian firms can subtract their R & D costs

from their taxes. The Tax Office controlled the users. The main statements were the following:

• Sometimes the beneficiary firms really realised R & D projects which supported successful innovations.

• A number of managers however did not know, what the “scientific” definition of the R & D is, e.g. they financed a simple review of the professional literature, which is not R & D, because in general it can not find out new knowledge.

• The main goal of some other beneficiary firms was the tax economy; in these cases they often realised R & D with any chance of a profitable utilisation (e.g. the writing a book).

• At times the only goal of a tax reduction was the creation of some possibility to the corruption. In this case the management ordered a small and simple analysis, but for a great fee, and it asked back a part of the sum.

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6. Financial strategyWhat are the balance sheet and the income statement?

Why do firms have to protect their goodwill?What is the present value? Why and how do planners

count the risk discount?What are the main sources of enterprise financing in the

different phases of the firm’s life-cycle?What is the main task of the cash flow management?

What is the debt ratio?What are the main tools of firms to increase the

profitability?How can the financial situation of the Hungarian firms be

evaluated?What are the Maastricht criteria? Why can not Hungary

enter to the euro area currently?9

7. Regional policiesWhy did the regional strategies become important in the

modern economies?What are the types of the regions in a developed economy

(according to M. Porter)?Which were the leading centers of the world during the

past centuries? And nowadays?What are the main goals and tools of the regional policy? What does the principle of subsidiarity mean? And what

does the principle of partnership mean?What is the red boomerang? How it can be characterised?Describe the main problems (deficiencies) of the

Hungarian regional strategies.What does “brain drain” mean?

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Case study on regional developmentHungary has great traditions in the regional

development, but often the strategies are wrong. The main mistakes are as follow:

• The strategy of the Wien region calculates on the demand and supply of many Czech and Hungarian spaces. But the Hungarian regions do not analyse the capabilities of the neighbouring regions, so, they ignore many opportunities.

• In Hungary, the main decision-makers are politicians, who fix the goals (distributing e.g. some EU subventions) in the base of political points of view.

• The Hungarian regions do not co-operate in the development actions, aldough they have many common interests. So, these interests are not validated in the realisation of their strategies.

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8. National economic policyWhat do the GDP mean? What are the main

“factors” (engines) of its growth?What are the “traditional” (classic) tools of an

economic policy? What additional elements can be important in a modern economy?

What is the relationship between the corruption and the growth in a country?

What are the principles of the contestable market and why are they important?

What elements of the yearly economic forecasts GKI can well predict and the forecasting of what indexes are unreliable?

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