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  • Chapter 2 - Understanding Strategies

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    yanuarwirandono
    364 vizualizări12 pagini
    This document discusses corporate strategy and behavior in organizations. It outlines goals for companies such as profitability and maximizing shareholder value. Strategy is defined as the general direction an organization plans to move to attain its goals. There are different levels of strategy including corporate, business unit, and industry analysis. Goals must be congruent through both formal control systems like rules and manuals, as well as informal factors like culture and communication. Organizations can take different forms such as functional, business unit, or matrix structures. Controllers are responsible for management control systems through financial reporting and analysis.

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    This document discusses corporate strategy and behavior in organizations. It outlines goals for companies such as profitability and maximizing shareholder value. Strategy is defined as the general direction an organization plans to move to attain its goals. There are different levels of strategy including corporate, business unit, and industry analysis. Goals must be congruent through both formal control systems like rules and manuals, as well as informal factors like culture and communication. Organizations can take different forms such as functional, business unit, or matrix structures. Controllers are responsible for management control systems through financial reporting and analysis.

    Drepturi de autor:

    © All Rights Reserved
    Descărcați ca PPTX, PDF, TXT sau citiți online pe Scribd
    Indicator pentru conținut neadecvat
    364 vizualizări12 pagini

    Chapter 2 - Understanding Strategies

    Încărcat de

    yanuarwirandono
    This document discusses corporate strategy and behavior in organizations. It outlines goals for companies such as profitability and maximizing shareholder value. Strategy is defined as the general direction an organization plans to move to attain its goals. There are different levels of strategy including corporate, business unit, and industry analysis. Goals must be congruent through both formal control systems like rules and manuals, as well as informal factors like culture and communication. Organizations can take different forms such as functional, business unit, or matrix structures. Controllers are responsible for management control systems through financial reporting and analysis.

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    © All Rights Reserved
    Descărcați ca PPTX, PDF, TXT sau citiți online pe Scribd
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    din 12

    Strategy

    CHAPTER 2

    Goals
    Profitability

    Return on investment, earnings per share.

    Maximizing shareholder value

    Stock price

    Risk

    Risk vs. return

    Multiple stakeholder approach

    Capital market
    Product market
    Factor market

    The Concept of Strategy


    It describes the general direction in which an

    organization plans to move to attain its goals.


    Strategy execution

    70% of failures in business are associated with bad strategy


    execution.

    Environmental analysis:

    Opportunities
    Threats

    Internal analysis:

    Strengths
    Weaknesses

    Corporate level strategy


    Categories:

    Single industry firms

    Related diversified firms

    Uses its core competency to pursue growth within that industry.


    Creates operating synergies across business based on common
    core competencies.

    Unrelated diversified firms

    Emphasizes on acquisition.

    Core competence and Corporate diversification

    Business Unit Strategy


    Most major companies have more than one business

    units.
    Business Units Missions:

    Build (high market growth, low market share)


    Hold (High market growth, high market share)
    Harvest (Low market growth, high market share)
    Divest (Low market growth, low market share)

    Business unit competitive advantage

    Industry analysis
    Factors in industry analysis:
    Rivalry among existing competitors
    Bargaining power of customers
    Bargaining power of suppliers
    Threat from substitutes
    Threat of new entry

    Behavior in Organizations
    CHAPTER 3

    Goal congruence
    Management control systems affect behavior of

    employees.
    Goal congruence: the pursue of personal goals helps

    to achieve the organizations goals.


    At the minimum, a control systems prevents

    employees to act against the organizations interest.

    Goal congruence: Informal factors


    External factors (norms exist in the society)

    Work ethics

    Internal factors

    Organizations culture
    Management style
    The informal organization
    Perception and communication

    Goal congruence: Formal Control Systems


    Rules

    Physical controls
    Manuals
    System safeguards
    Task control systems

    Formal control process (exhibit 3.1, page 105)

    Types of Organizations
    Functional organizations

    Skilled managers, efficiency


    Difficult to measure outputs, time-consuming decision-making

    Business unit organizations

    Performance measurement is easier


    Redundancy

    Matrix organizations

    Functions of Controller

    Someone with the responsibility to design and

    operate management control systems

    Prepare financial statements and reports


    Prepare and analyze performance reports
    Supervise internal audit and control procedures
    Develop personnel in controller organization

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