Tutorial 12 Answers

Tutorial 12 Answers - T utorial 12 Answers 1. A strategy...

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Tutorial 12 Answers 1. A strategy indicates the general direction in which a firm plans to move to attain its goals. The strategies of any business organization, whether purely domestic or multinational, are determined by matching two key ingredients: core competencies and available opportunities. Internal factors relate to the identification of core competencies of a firm focusing on strengths and weaknesses with regard to the expertise available within the firm in the areas of technology, manufacturing, distribution, and logistics. 2. The external factors relate to the identification of the opportunities available to the firm, the second key ingredient in formulating strategy. Identification of opportunities also includes the threats facing the firm in the areas of competitors, customers, suppliers, regulatory bodies, as well as socio-political circumstances. 3. Accounting provides the skills necessary to quantify in financial terms the factors that influence strategy formulation -- strengths, weaknesses, opportunities and threats --, and to develop projections of costs and benefits as financial expressions of strategy. Capital budgets are a prime example of the contribution accounting makes in strategy formulation. Further, organizational goals are often expressed in financial terms, for example, to achieve a particular level of return on investment. 5. The organizational structure of a MNC is determined to a considerable extent on the roles assigned to its subsidiaries. Some subsidiaries play the role of a producer of products for the parent company, where as others have catering for the needs of the host country market as their main role. There are also subsidiaries that operate as part of a global network. Attainment of corporate goals is the main objective of implementing strategy. The subsidiary managers’ contributions towards this end will depend on the roles assigned to each subsidiary within the organizational structure. For example, the contribution expected from the manager of a subsidiary that plays the role of an integrated player
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Tutorial 12 Answers - T utorial 12 Answers 1. A strategy...

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