bus490_w4_ch4

bus490_w4_ch4 - BUS 490 Week 4: The Internal Assessment...

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BUS 490 Week 4: The Internal Assessment Slide # Topic Narration Slide 1 Introduction Welcome to Business Policy. This lesson will focus on internal assessment. Please go to slide # 2 Slide 2 Objectives Upon completion of this lesson you will be able to: Describe how to perform an internal strategic-management audit; Explain the Resource-Based View in strategic management; Compare and contrast the culture in America with other countries; Identify the basic functions that make up management, marketing, finance and accounting, production or operations, research and development, and management information systems; Explain the importance of financial ratio analysis; Explain the nature and role of management information systems in strategic management; Describe how to use Value Chain Analysis in strategic assessments; and Develop an Internal Factor Evaluation Matrix. Please go to slide # 3 Slide 3 Overview This lesson focuses on identifying and evaluating a firm’s strengths and weaknesses in the functional areas of business, including management, marketing, finance, production, research and development, and management information systems. We will discuss the relationships among these areas, as well as important functional area concepts. Please go to slide # 4 Slide 4 The Nature of an Internal Audit All organizations have strengths and weaknesses in the functional areas of business. Internal strengths and weaknesses, coupled with external opportunities or threats and a clear statement of mission, provide the basis for establishing objectives and strategies. The process of performing an internal audit closely parallels the process of performing an external audit. Compared to the external audit, the process of performing an internal audit provides more opportunity for participants to understand how their jobs, departments, and divisions fit into the whole organization. In turn, the process of communication in the organization improves. A key to organizational success is effective coordination and understanding among managers from all functional business areas.
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Through involvement in performing an internal strategic management audit, managers from different departments and divisions of the firm come to understand the nature and effect of decisions in other functional business areas in their firm. Knowledge of these relationships is critical for effectively establishing objectives and strategies. Financial ratio analysis exemplifies the complexity of relationships among the functional areas of business. For example, a declining return on investment or profit margin ratio could be the result of ineffective marketing or a weak management information system. Please go to slide # 5 Slide 5 The Resource- Based View The resource-based view, or RBV, approach to competitive advantage contends that internal resources are more important for a firm than external factors in achieving and sustaining competitive advantage. Proponents of the RBV view contend that organizational performance
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bus490_w4_ch4 - BUS 490 Week 4: The Internal Assessment...

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