The ability to anticipate, envision, maintain flexibility, and empower others to create strategic change as necessary.
A change brought about as a result of selecting and implementing a firm’s strategies.
Latitude for action depends on: 1.) external environmental sources, 2.) characteristics of the organization, and 3.) characteristics of the manager
Top management team
Team composed of individuals who are responsible for making certain the firm uses the strategic management process, especially for the purpose of selecting and implementing strategies.
Heterogeneous top management team
Composed of individuals with different functional backgrounds, experience, and education.
When the CEO and the chairperson of the board are the same.
The logic that the CEO should desire to be the best possible steward of the firm’s assets and would benefit from CEO duality. This would cut governance and coordination costs resulting from independent board leadership structure.
Internal managerial labor market
A firm’s opportunities for managerial positions and the qualified employees within that firm.
External managerial labor market
Collection of managerial career opportunities and the qualified people who are external to the organization that exist.
Inside CEOs advantages
1. Clear understanding of firm’s personnel and capabilities, 2.) appreciation of company culture and core values, 3.) deep knowledge of firm’s core competencies, and 4.) “feel” for what will work or not in the firm
Homogenous + Internal CEO
Homogenous + External CEO
Ambiguous…possible change in top management and strategy
Heterogeneous + Internal CEO
Stable strategy with innovation
Heterogeneous + External CEO
Determining strategic direction
Specifying the vision and the strategy to achieve this vision over time.
The knowledge and skills of a firm’s entire workforce.
Relationships inside and outside the firm that help in efforts to accomplish tasks and create value for stakeholders.
Complex set of ideologies, symbols, and core values shared throughout the firm and influence how the firm conducts business.
One of the 5 dimensions of an entrepreneurial mind-set. Allows employees to take actions that are free of organizational constraints and encourages them to do so.
One of the 5 dimensions of an entrepreneurial mind-set. Reflects a firm’s tendency to engage in and support new ideas, novelty, experimentation, and creative processes that may result in new products, services, or technological processes.
One of the 5 dimensions of an entrepreneurial mind-set. Reflects a willingness by employees and their firm to accept measured levels of risks when pursuing entrepreneurial opportunities.
One of the 5 dimensions of an entrepreneurial mind-set. The firm’s ability to be a market leader rather than a follower.
One of the 5 dimensions of an entrepreneurial mind-set. Firm’s propensity to take actions that allow it to consistently and substantially outperform its rivals.
Developing and supporting an ethical organizational culture
1.) establish and communicate specific goals, 2.) continuously revise and update code of conduct, 3.) disseminate code of conduct to all stakeholders, 4.) develop and implement procedures to achieve ethical standards and practices, 5.) create and use reward systems to encourage ethical behavior, and 6.) create a work environment that treats all people equally with dignity.
Focuses on the content of strategic actions rather than their outcomes.
A tool used to determine if they are achieving an appropriate balance when using strategic and financial controls as a means of positively influencing performance.
Four perspectives of the balanced scorecard
1.) Financial (cash flow, ROE, ROA), 2.) customer (anticipate customers’ needs), 3.) internal business processes (asset utilization), and 4.) learning and growth (innovation ability)