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David ppt exp_ch04
 

David ppt exp_ch04

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    David ppt exp_ch04 David ppt exp_ch04 Presentation Transcript

    • Chapter 4The Internal Assessment Strategic Management: Concepts & Cases 11th Edition Fred David Ch 4 -1Copyright 2007 Prentice Hall
    • Chapter Outline The Nature of an Internal Audit The Resource-Based View (RBV) Integrating Strategy & Culture Ch 4 -2Copyright 2007 Prentice Hall
    • Chapter Outline (cont’d) Management Marketing Opportunity Analysis Ch 4 -3Copyright 2007 Prentice Hall
    • Chapter Outline (cont’d) Finance/Accounting Production/Operations Research & Development Ch 4 -4Copyright 2007 Prentice Hall
    • Chapter Outline (cont’d) Management Information Systems The Internal Factor Evaluation (IFE) Matrix Ch 4 -5Copyright 2007 Prentice Hall
    • Internal Assessment The biggest levers you’ve got to change a company are strategy, structure, and culture. If I could pick two, I’d pick strategy and culture. – Wayne Leonard, CEO, Entergy Weak leadership can wreck the soundest strategy. – Sun Zi Ch 4 -6Copyright 2007 Prentice Hall
    • Nature of an Internal Audit Functional Areas of Business -- Strengths -- Weaknesses Ch 4 -7Copyright 2007 Prentice Hall
    • Nature of an Internal Audit Basis for Objectives & Strategies  Internal strengths/weaknesses  External opportunities/threats  Clear statement of mission Ch 4 -8Copyright 2007 Prentice Hall
    • Key Internal Forces Functional Business Areas: Vary by organization Divisions have differing strengths & weaknesses Ch 4 -9Copyright 2007 Prentice Hall
    • Key Internal Forces Distinctive Competencies: Firm’s strengths that cannot be easily matched or imitated by competitors Ch 4 -10Copyright 2007 Prentice Hall
    • Key Internal Forces Distinctive Competencies: Building competitive advantage involves taking advantage of distinctive competencies Ch 4 -11Copyright 2007 Prentice Hall
    • Key Internal Forces Distinctive Competencies: Strategies designed to improve on a firm’s weaknesses and turn to strengths Ch 4 -12Copyright 2007 Prentice Hall
    • Internal Audit Parallels process of external audit•Information from: •Management •Marketing •Finance/accounting •Production/operations •Research & Development •Management information Systems Ch 4 -13Copyright 2007 Prentice Hall
    • Internal Audit Involvement in performing an internal strategic-management audit provides vehicle for understanding nature and effect of decisions in other functional business areas of the firm Ch 4 -14Copyright 2007 Prentice Hall
    • Internal Audit Key to Organizational Success Coordination & understanding among managers from all functional areas Ch 4 -15Copyright 2007 Prentice Hall
    • Internal Audit Functional Relationships Number and complexity increases relative to organization size Ch 4 -16Copyright 2007 Prentice Hall
    • Internal Audit Financial Ratio Analysis Exemplifies complexity of relationships among functional areas of the business Ch 4 -17Copyright 2007 Prentice Hall
    • Resource Based View (RBV) Approach to Competitive Advantage Internal resources are more important than external factors Ch 4 -18Copyright 2007 Prentice Hall
    • Resource Based View (RBV) 3 All Encompassing Categories 1. Physical resources 2. Human resources 3. Organizational resources Ch 4 -19Copyright 2007 Prentice Hall
    • Resource Based View (RBV) Empirical Indicators  Rare  Hard to imitate  Not easily substitutable Ch 4 -20Copyright 2007 Prentice Hall
    • Integrating Strategy & Culture Organizational Culture Pattern of behavior developed by an organization as it learns to cope with its problem of external adaptation and internal integration…is considered valid and taught to new members Ch 4 -21Copyright 2007 Prentice Hall
    • Integrating Strategy & Culture Organizational Culture  Resistant to change  May represent:  Strength  Weakness Ch 4 -22Copyright 2007 Prentice Hall
    • Integrating Strategy & Culture Values Legends Beliefs Cultural Heroes Rites Products Symbols Rituals Myths Ch 4 -23Copyright 2007 Prentice Hall
    • Integrating Strategy & Culture Organizational Culture Can Inhibit Strategic Management  Miss external changes due to strongly held beliefs  Natural tendency to “hold the course” even during times of strategic change Ch 4 -24Copyright 2007 Prentice Hall
    • U.S. Versus Foreign CulturesTo successfully compete in world markets, U.S. managers must obtain a better knowledge of historical, cultural, and religious forces that motivate and drive people in other countries. Ch 4 -25Copyright 2007 Prentice Hall
    • Ch 4 -26Copyright 2007 Prentice Hall
    • Management Functions of Management 1. Planning 2. Organizing 3. Motivating 4. Staffing 5. Controlling Ch 4 -27Copyright 2007 Prentice Hall
    • Management Stage When Most Function Important Planning Strategy Formulation Organizing Strategy Implementation Motivating Strategy Implementation Staffing Strategy Implementation Controlling Strategy Evaluation Ch 4 -28Copyright 2007 Prentice Hall
    • Management Planning  Beginning of management process  Bridge between present & future  Improves likelihood of attaining desired results Ch 4 -29Copyright 2007 Prentice Hall
    • Management Forecasting Establishing objectives Planning Devising strategies Developing policies Setting goals Ch 4 -30Copyright 2007 Prentice Hall
    • Management Organizing  Achieves coordinated effort  Defines task & authority relationships  Departmentalization  Delegation of authority Ch 4 -31Copyright 2007 Prentice Hall
    • Management Organizational design Job specialization Job descriptions Job specifications Organizing Span of control Unity of command Coordination Job design Job analysis Ch 4 -32Copyright 2007 Prentice Hall
    • Management Motivating  Influencing to accomplish specific objectives  Communication – major component Ch 4 -33Copyright 2007 Prentice Hall
    • Management Leadership Communication Work groups Job enrichment Motivating Job satisfaction Needs fulfillment Organizational change Morale Ch 4 -34Copyright 2007 Prentice Hall
    • Management Staffing  Personnel management  Human resources management Ch 4 -35Copyright 2007 Prentice Hall
    • Management Wage & salary admin. Employee benefits Interviewing Hiring Discharging Staffing Training Management development Affirmative Action EEO Labor relations Ch 4 -36Copyright 2007 Prentice Hall
    • Management Controlling  Establishing performance standards  Ensure actual operations conform to planned operations  Taking corrective actions Ch 4 -37Copyright 2007 Prentice Hall
    • Management Quality Financial Sales Inventory Controlling Expense Analysis of variance Rewards Sanctions Ch 4 -38Copyright 2007 Prentice Hall
    • Management Audit Checklist ••Does the firm use strategic management Does the firm use strategic management concepts? concepts? ••Are objectives/goals measurable? Well Are objectives/goals measurable? Well communicated? communicated? ••Do managers at all levels plan Do managers at all levels plan effectively? effectively? Ch 4 -39Copyright 2007 Prentice Hall
    • Management Audit Checklist ••Do managers delegate well? Do managers delegate well? ••Is the organization’s structure Is the organization’s structure appropriate? appropriate? ••Are job descriptions clear? Are job descriptions clear? ••Are job specifications clear? Are job specifications clear? ••Is employee morale high? Is employee morale high? Ch 4 -40Copyright 2007 Prentice Hall
    • Management Audit Checklist ••Is employee absenteeism low? Is employee absenteeism low? ••Is employee turnover low? Is employee turnover low? ••Are the reward mechanisms effective? Are the reward mechanisms effective? ••Are the organization’s control Are the organization’s control mechanisms effective? mechanisms effective? Ch 4 -41Copyright 2007 Prentice Hall
    • Marketing Customer Needs/Wants for Products/Services 1. Defining 2. Anticipating 3. Creating 4. Fulfilling Ch 4 -42Copyright 2007 Prentice Hall
    • Marketing Marketing Functions 1. Customer analysis 2. Selling products/services 3. Product & service planning 4. Pricing 5. Distribution 6. Marketing research 7. Opportunity analysis Ch 4 -43Copyright 2007 Prentice Hall
    • Marketing Customer surveys Consumer information Market positioning Customer strategies Analysis Customer profiles Market segmentation strategies Ch 4 -44Copyright 2007 Prentice Hall
    • Marketing Advertising Sales Promotion Selling Products/Services Publicity Sales force management Customer relations Dealer relations Ch 4 -45Copyright 2007 Prentice Hall
    • Marketing Test marketing Brand positioning Devising warrantees Planning Product/Service Packaging Product features/options Product style Quality Ch 4 -46Copyright 2007 Prentice Hall
    • Marketing Forward integration Discounts Credit terms Pricing Condition of sale Markups Costs Unit pricing Ch 4 -47Copyright 2007 Prentice Hall
    • Marketing Warehousing Channels Coverage Distribution Retail site locations Sales territories Inventory levels Transportation Ch 4 -48Copyright 2007 Prentice Hall
    • Marketing Data collection Marketing Research Data input Data analysis Support business functions Ch 4 -49Copyright 2007 Prentice Hall
    • Marketing Assessing costs Assessing benefits Opportunity Analysis Assessing risks Cost/benefit/risk analysis Ch 4 -50Copyright 2007 Prentice Hall
    • Marketing Opportunity Analysis 1. Are markets segmented effectively? 2. Is the organization positioned well among competitors? 3. Has the firm’s market share been increasing? 4. Are the distribution channels reliable & cost effective? 5. Is the sales force effective? Ch 4 -51Copyright 2007 Prentice Hall
    • Marketing Opportunity Analysis 6. Does the firm conduct market research? 7. Are product quality & customer service good? 8. Are the firm’s products/services priced appropriately? 9. Does the firm have effective promotion, advertising, & publicity strategies? Ch 4 -52Copyright 2007 Prentice Hall
    • Marketing Opportunity Analysis 10. Are the marketing planning & budgeting effective? 11. Do the firm’s marketing managers have adequate experience and training? Ch 4 -53Copyright 2007 Prentice Hall
    • Finance/Accounting  Determining financial strengths & weaknesses key to strategy formation Ch 4 -54Copyright 2007 Prentice Hall
    • Finance/Accounting Finance/Accounting Functions 1. Investment decision (Capital budgeting) 2. Financing decision 3. Dividend decision Ch 4 -55Copyright 2007 Prentice Hall
    • Basic Financial Ratios Firm’s ability to meet its short-term obligations Liquidity Ratios Ratios Current ratio Quick (or acid test) ratio Ch 4 -56Copyright 2007 Prentice Hall
    • Basic Financial Ratios Extent of debt financing Ratios Leverage Ratios Debt-to-total assets Debt-to-equity Long-term debt-to-equity Times-interest earned Ch 4 -57Copyright 2007 Prentice Hall
    • Basic Financial Ratios Effective use of firm’s resources Activity Ratios Ratios Inventory-turnover Fixed assets turnover Total assets turnover Accounts receivable turnover Average collection period Ch 4 -58Copyright 2007 Prentice Hall
    • Basic Financial Ratios Effectiveness shown by returns on sales & investment Profitability Ratios Ratios Gross profit margin Operating profit margin Net profit margin Return on total assets (ROA) Ch 4 -59Copyright 2007 Prentice Hall
    • Basic Financial Ratios Effectiveness shown by returns on sales & investment Profitability Ratios (cont’d) Ratios Return on stockholders equity (ROE) Earnings per share Price-earnings ratio Ch 4 -60Copyright 2007 Prentice Hall
    • Basic Financial Ratios Firm’s ability to maintain economic position Growth Ratios Ratios Sales Net income Earnings per share Dividends per share Ch 4 -61Copyright 2007 Prentice Hall
    • Finance/Accounting Audit ••Where is the firm strong/weak as Where is the firm strong/weak as indicated by financial ratio analysis? indicated by financial ratio analysis? ••Can the firm raise short-term capital as Can the firm raise short-term capital as needed? needed? ••Can the firm raise long-term capital as Can the firm raise long-term capital as needed through debt and/or equity? needed through debt and/or equity? Ch 4 -62Copyright 2007 Prentice Hall
    • Finance/Accounting Audit ••Does the firm have sufficient working Does the firm have sufficient working capital? capital? ••Are capital budgeting procedures Are capital budgeting procedures effective? effective? ••Are dividend payout policies reasonable? Are dividend payout policies reasonable? ••Are the firm’s financial managers Are the firm’s financial managers experienced & well trained? experienced & well trained? Ch 4 -63Copyright 2007 Prentice Hall
    • Finance/Accounting Audit Effective Financial Analysis Requires: Effective Financial Analysis Requires: 1. Analysis of how the ratios have 1. Analysis of how the ratios have changed over time changed over time 2. How the ratios compare to industry 2. How the ratios compare to industry norms norms 3. How the ratios compare with key 3. How the ratios compare with key competitors competitors Ch 4 -64Copyright 2007 Prentice Hall
    • Production/Operations Production/Operations Functions  Process  Capacity  Inventory  Workforce  Quality Ch 4 -65Copyright 2007 Prentice Hall
    • Production/Operations Facility design Technology selection Facility layout Process Process flow analysis Facility location Line balancing Process control Ch 4 -66Copyright 2007 Prentice Hall
    • Production/Operations Forecasting Facilities planning Capacity Aggregate planning Scheduling Capacity planning Queuing analysis Ch 4 -67Copyright 2007 Prentice Hall
    • Production/Operations Raw materials Inventory Work in process Finished goods Materials handling Ch 4 -68Copyright 2007 Prentice Hall
    • Production/Operations Job design Work measurement Workforce Job enrichment Work standards Motivation techniques Ch 4 -69Copyright 2007 Prentice Hall
    • Production/Operations Quality control Sampling Quality Testing Quality assurance Cost Control Ch 4 -70Copyright 2007 Prentice Hall
    • Production/Operations Audit ••Are suppliers of materials, parts, etc. Are suppliers of materials, parts, etc. reliable and reasonable? reliable and reasonable? ••Are facilities, equipment & machinery in Are facilities, equipment & machinery in good condition? good condition? ••Are inventory-control policies and Are inventory-control policies and procedures effective? procedures effective? Ch 4 -71Copyright 2007 Prentice Hall
    • Production/Operations Audit ••Are quality-control policies & procedures Are quality-control policies & procedures effective? effective? ••Are facilities, resources, and markets Are facilities, resources, and markets strategically located? strategically located? ••Does the firm have technological Does the firm have technological competencies? competencies? Ch 4 -72Copyright 2007 Prentice Hall
    • Research & Development Research & Development Functions  Development of new products before competitors  Improving product quality  Improving manufacturing processes to reduce costs Ch 4 -73Copyright 2007 Prentice Hall
    • Research & Development Financing as many projects as possible Use percent-of-sales method R&D Budgets Budgeting relative to competitors How many successful new products are needed Ch 4 -74Copyright 2007 Prentice Hall
    • Research & Development Audit ••Are the R&D facilities adequate? Are the R&D facilities adequate? ••If R&D is outsourced, is it cost effective? If R&D is outsourced, is it cost effective? ••Are the R&D personnel well qualified? Are the R&D personnel well qualified? ••Are R&D resources allocated effectively? Are R&D resources allocated effectively? Ch 4 -75Copyright 2007 Prentice Hall
    • Research & Development Audit ••Are MIS and computer systems Are MIS and computer systems adequate? adequate? ••Is communication between R&D & other Is communication between R&D & other organizational units effective? organizational units effective? ••Are present products technologically Are present products technologically competitive? competitive? Ch 4 -76Copyright 2007 Prentice Hall
    • Management Information SystemsPurpose  Improve performance of an enterprise by improving the quality of managerial decisions. Ch 4 -77Copyright 2007 Prentice Hall
    • Management Information Systems Information Systems CIO/CTO Security User-friendly E-commerce Ch 4 -78Copyright 2007 Prentice Hall
    • Management Information Systems Audit ••Do managers use the information system Do managers use the information system to make decisions? to make decisions? ••Is there a CIO or Director of Information Is there a CIO or Director of Information Systems position in the firm? Systems position in the firm? ••Is data updated regularly? Is data updated regularly? Ch 4 -79Copyright 2007 Prentice Hall
    • Management Information Systems Audit ••Do managers from all functional areas Do managers from all functional areas contribute input to the information system? contribute input to the information system? ••Are there effective passwords for entry Are there effective passwords for entry into the firm’s information system? into the firm’s information system? ••Are strategists of the firm familiar with the Are strategists of the firm familiar with the information systems of rival firms? information systems of rival firms? Ch 4 -80Copyright 2007 Prentice Hall
    • Management Information Systems Audit ••Is the information system user-friendly? Is the information system user-friendly? ••Do all users understand the competitive Do all users understand the competitive advantages that information can provide? advantages that information can provide? ••Are computer training workshops provided Are computer training workshops provided for users? for users? ••Is the firm’s system being improved? Is the firm’s system being improved? Ch 4 -81Copyright 2007 Prentice Hall
    • Ch 4 -82Copyright 2007 Prentice Hall
    • Ch 4 -83Copyright 2007 Prentice Hall
    • For Review (Chapter 4) Key Terms & Concepts Activity Ratios Cost/Benefit Analysis Capital Budgeting Cultural Products Communication Distinctive Competencies Controlling Distribution Ch 4 -84Copyright 2007 Prentice Hall
    • For Review (Chapter 4) Key Terms & Concepts Functions of Dividend Decision Finance/Accounting Empirical Indicators Functions of Management Financial Ratio Analysis Functions of Marketing Functions of Production/ Financing Decision Operations Ch 4 -85Copyright 2007 Prentice Hall
    • For Review (Chapter 4) Key Terms & Concepts Growth Ratios Investment Decision Human Resource Leverage Ratios Management Internal Audit Liquidity Ratios Internal Factor Evaluation Management Information (IFE) Matrix Systems Ch 4 -86Copyright 2007 Prentice Hall
    • For Review (Chapter 4) Key Terms & Concepts Motivating Personnel Management Opportunity Analysis Planning Organizational Culture Pricing Product & Service Organizing Planning Ch 4 -87Copyright 2007 Prentice Hall
    • For Review (Chapter 4) Key Terms & Concepts Production/Operations Selling Functions Profitability Ratios Staffing Research & Development Synergy Resource Based View Test Marketing (RBV) Ch 4 -88Copyright 2007 Prentice Hall
    • For Review (Chapter 4) Key Terms & Concepts Value Chain Analysis (VCA) Ch 4 -89Copyright 2007 Prentice Hall