STMGMT_exam1.docx - Management 3280 u2013 Exam 1 Chapter 1...

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Management 3280 – Exam 1 Chapter 1 – Strategic Management: Creating Competitive Advantages Romantic view of leadership – implicit assumption is that the leader is the key force determining the organization’s success – or lack thereof External control view of leadership – focus is on external factors that may positively (or negatively) affect a firm’s success Leadership has limited influence over the external forces that determine the organization’s success (e.g. economic downturns, new technologies, government regulation, major conflict or war) It is important to point out that successful executives are often able to navigate around the difficult circumstances that they face WHAT IS STRATEGIC MANAGEMENT? Managers must go beyond “incremental management,” whereby they view their job as making a series of small, minor changes to improve the efficiency of their firm’s operations. Today’s leaders must be proactive, anticipate change, and continually refine and, when necessary, make dramatic changes to their strategies. Strategic management – the analyses, decisions, and actions an organization undertakes in order to create and sustain competitive advantages (note the three ongoing processes: analyses, decisions, and actions ) Strategic management is concerned with the analysis of strategic goals (vision, mission, and strategic objectives) along with the analysis of the internal and external environments of the organization. Leaders must make strategic decisions which address two basic questions: 1. What industries should we compete in? 2. How should we compete in those industries? Decisions are of little use unless they are acted on . Firms must take the necessary actions to implement their strategies. Strategies – the ideas, decisions, and actions that enable a firm to succeed The essence of strategic management is the study of why some firms outperform others. Managers need to determine how a firm is to compete so that it can obtain certain advantages that are sustainable over a lengthy period of time: Competitive advantage – a firm’s resources and capabilities that enable it to overcome the competitive forces in its industry(ies)
How should we compete in order to create competitive advantages in the marketplace?
How can we create competitive advantages in the marketplace that are unique, valuable, and difficult for rivals to imitate or substitute?
The Four Key Attributes of Strategic Management Key Attributes of Strategic Management: 1. Directs the organization toward overall goals and objectives 2. Includes multiple stakeholders in decision making 3.

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