Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
84 Cards in this Set
- Front
- Back
|
The build-borrow-buy framework provides a conceptual model that aids strategists in deciding whether to pursue... |
internal development enter a contract arrangement or strategic alliance acquire new resources, capabilities, and competencies |
|
|
Firms that are able to learn how to select the right pathways to obtain new resources are more likely to... |
gain and sustain a competitive advantage |
|
|
Strategic alliances have the goal of sharing... |
knowledge, resources, and capabilities to develop processes, products, or services |
|
|
An alliance qualifies as strategic if it has the potential to affect... |
a firm's competitive advantage by increasing value and/or lowering costs. |
|
|
The most common reasons firms enter alliances are to (5) |
1. strengthen competitive position 2. enter new markets 3. hedge against uncertainty 4. access critical complementary resources 5. learn new capabilities |
|
|
Alliances can be governed by the following mechanisms: |
contractual agreements for non-equity alliances, equity alliances, and joint ventures |
|
|
Non-equity alliances pros: |
flexible fast easy to get in and out |
|
|
Non-equity alliances cons: |
weak ties lack of trust/commitments |
|
|
Equity alliances pros: |
stronger ties potential for trust/commitment window into new technology |
|
|
Equity Alliance Cons |
less flexible slower can entail significant investment |
|
|
Joint venture pros: |
strongest tie trust/commitment most likely may be required by institutional setting |
|
|
Joint venture cons: |
potentially long negotiations and significant investments long-term solution managers may have two reporting lines |
|
|
An alliance management capability can be a source of competitive advantage as... |
better management of alliances leads to more likely superior performance |
|
|
Firms build a superior alliance management capability through... |
learning by doing and by establishing a dedicated alliance function. |
|
|
A merger describes the... |
joining of two independent companies to form a combined entity |
|
|
An acquisition describes the... |
purchase or takeover of one company by another. |
|
|
An acquisition can be.. |
friendly or hostile |
|
|
Although there is a distinction between mergers and acquisitions... |
many observers simply use the umbrella term mergers and acquisitions |
|
|
Firms can use M&A activity for competitive advantage when they possess... |
a superior relational capability, which is often built on superior alliance management capability |
|
|
Horizontal integration is the process of merging... |
with competitors, leading to industry condolidation |
|
|
As a corporate strategy, firms use horizontal integration to... |
1. reduce competitive intensity 2. lower costs 3. preempt rivals |
|
|
Most mergers and acquisitions destroy shareholder value because... |
anticipated synergies never materialize |
|
|
If there is any value creation in M&A, it generally accrues to... |
the shareholders of the firm that is taken over because acquirers often pay a premium when buying the target company |
|
|
Mergers and Acquisitions are a popular vehicle for corporate-level strategy implementation for three reasons: |
1. because of principal-agent problems 2. the desire to overcome competitive disadvantage 3. the quest for superior acquisition and integration capability |
|
|
the process of creating, implementing, monitoring and modifying the structure, processes, and procedures of an organization |
organizational design |
|
|
The key components or organizational design are... |
structure, culture, and control
|
|
|
The goal is to design an organization that allows managers to... |
effectively translate their chosen strategy into a realized one |
|
|
Organizational inertia can lead to the failure of established firms when... |
a tightly coupled system of strategy and structure experiences internal or external shifts |
|
|
Firm failure happens through a... |
dynamic four-step process |
|
|
An organizational structure determines how firms orchestrate... |
employees' work efforts and distribute resources. |
|
|
An organizational structure defines how firms divide and integrate... |
tasks, delineates the reporting relationships up and down the hierarchy, defines formal communication channels, and prescribes how employees coordinate work efforts |
|
|
The four building blocks of an organizational structure are... |
specialization formalization centralization and hierarchy |
|
|
Organic organizations are characterized by... |
a low degree of specialization and formalization, a flat organizational structure, and decentralized decision making |
|
|
Mechanistic organizations are described by... |
a high degree of specialization and formalization and a tall hierarchy that relies on centralized decision making |
|
|
The comparative effectiveness of mechanistic versus organic organizational forms depends on the... |
context |
|
|
To gain and sustain competitive advantage, not only must structure follow strategy, but also the... |
chosen organizational form must match the firm's business strategy |
|
|
The strategy-structure relationship is... |
dynamic, changing in a predictable pattern as firms grow in size and complexity |
|
|
Predictable pattern |
from simple to functional structure, then to multidivisional and matrix structure |
|
|
In a simple structure, the founder tends to make... |
all the important decisions as well as run the day-to-day operations |
|
|
A functional structure groups employees into... |
distinct functional areas based on domain expertise |
|
|
It's different variations are matched with different business strategies (3) |
cost leadership differentiation blue ocean |
|
|
The multidivisional structure consists of several distinct SBUs, each with its own... |
profit-and-loss responsibility |
|
|
Each SBU operates more or less... |
independently from one another, led by a CEO responsible for the business strategy of the unit and its day-to-day operations |
|
|
The matrix structure is a mixture of two organizational forms: |
the M form and the functional structure |
|
|
Organizational culture describes the collectively shared ... |
values and norms of its members |
|
|
define what is considered important, and norms define appropriate employee attitudes and behaviors |
Values |
|
|
finds its expression in artifacts, which are observable expressions or an organization's culture |
corporate culture |
|
|
Strategic control-and-reward systems are... |
internal governance mechanisms put in place to align the incentives of principals and agents |
|
|
Who are the principals? |
shareholders |
|
|
Who are the agents? |
employees |
|
|
Strategic control-and reward systems allow managers to... |
specify goals, measure progress, and provide performance feedback |
|
|
In addition to the balance-scorecard framework, managers can use... |
organizational culture, input controls, and output controls as part of the firm's strategic control-and-reward systems |
|
|
Input controls deine and direct employee behavior through... |
explicit and codified rules and standard operating procedures |
|
|
Output controls guide employee behavior by... |
defining expected results, but leave the means to those results open to individual empoyees, groups, or SBUS |
|
|
By focusing on financial performance, many companies have... |
defined value creation too marrowly |
|
|
Companies should instead focus on creating... |
shared value |
|
|
a concept that includes value creation for both shareholders and society |
shared value |
|
|
The shared value creation framework seeks to identify connections between... |
economic and social needs, and then leverage them into competitive advantage |
|
|
Corporate governance involves mechanisms used to... |
direct and control an enterprise in order to ensure that it pursues its strategic goals successfully and legally |
|
|
Corporate governance attempts to address the principal agent problem, which describes any.. |
situation in which an agent performs activities on behalf of a principal |
|
|
Agency theory views the firm as... |
a nexus of legal contracts |
|
|
The principal-agent problem concerns the relationship between... |
owners and managers and also cascades down the organizational hierarchy |
|
|
The risk of opportunism on behalf of agents is exacerbated by... |
information asymmetry |
|
|
Agents are generally... |
better informed than the principals |
|
|
Governance mechanisms are used to align... |
incentives between principals and agents |
|
|
Governance mechanisms need to be designed in such a fashion as to overcome two specific agency problems: |
adverse selection and moral hazard |
|
|
The shareholders are the... |
legal owners of a publicly traded company and appoint a board of directors to represent their interests |
|
|
The day-to-day business operations of a publicly traded stock company are conducted by its... |
managers and employees, under the direction of the chief executive officer and the oversight of the board of directors |
|
|
The board of directors is composed of... |
inside and outside directors, who are elected by the shareholders. |
|
|
Inside directors are generally part of the company's senior management team, such as... |
the chief financial officer and the chief operating officer |
|
|
Outside directors are not... |
employees of the firm |
|
|
Outside directors are frequently senior executives from... |
other firms or full-time professionals who are appointed to a board and who serve on several boards simultaneously |
|
|
Other important corporate mechanisms are... |
executive compensation, the market for corporate control, and financial statement auditors, government regulators, and industry analysis |
|
|
Executive compensation has attracted significant attention in recent years. Two issues are at the forefront: |
1. the absolute size of the Ceo pay package compared with the pay of the average employee 2. The relationship between firm performance and CEO pay |
|
|
The board of directors and executive compensation are internal... |
corporate governance mechanisms |
|
|
The market for corporate control is an important... |
external corporate-governance mechanism. |
|
|
It consists of activist investors who seek to gain control... |
of an underperforming corporation by buying shares of its stock in the open market |
|
|
All public companies listed on the US stock exchanges must file a number of financial statements with the... |
Securities and Exchange commission, a federal regulatory agency whose task it is to oversee stock trading and enforce federal securities laws. |
|
|
Auditors and industry analysis study these... |
public financial statements carefully for clues of a firm's future valuations, financial irregularities, and strategy |
|
|
The ethical pursuit of competitive advantage lays the foundation for.. |
long-term superior performance |
|
|
Law and ethics are... |
not synonymous |
|
|
Obeying the law is the minimum that... |
society expects of a corporation and its managesr |
|
|
A manager's actions can be... |
completely legal, but ethically questionable |
|
|
Some argue that management needs an... |
accepted code of conduct that holds members to a high professional standard and imposes consequences for misconduct |
