MGMT10002 Lecture Notes - Lecture 3: Systems Theory, Competitive Advantage, Strategic Management
5 May 2018
School
Department
Course
Professor
Strategy Formulation and Managerial Decision Making – Lecture 3
o SWOT
▪ Internal
▪ Strengths
▪ Weaknesses
▪ External
▪ Opportunities
▪ Threats
• Strengths and Opportunities (SO)—How can you use your strengths to take
advantage of the opportunities?
• Strengths and Threats ST—How can you take advantage of your strengths to
avoid real and potential threats?
• Weaknesses and Opportunities WO— How can you use your opportunities
to overcome the weaknesses you are experiencing?
• Weaknesses and Threats (WT)—How can you minimize your weaknesses and
avoid threats?
▪
o Strategy
▪ Long term
▪ Bigger picture
▪ Compromise between organisation and environment
▪ Strategic management is planning to achieve a competitive advantage
o Competitive advantage
▪ Achieving synergy
▪ Exploiting core customers
▪ Targeting customers
▪ Creative value
o Organisational resources
o Systems thinking:
Not looking at discrete parts of the situation but rather the continually changing
interactions among the parts
o VRIO framework (resources contribution to sustaining competitive advantage)
▪ Valuable?
▪ Does it allow org to exploit opp, neutralise threats, improve
efficiency
▪ Rare?
▪ How common is it?
▪ Imperfect imitability?
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Strategy formulation and managerial decision making lecture 3: swot. Ideal vs reality: neoclassical: classical model, carnegie school: administrative model and political model. Classical: clear cut problem and goals, certainty, full information, outcome which maximise. Based on economic assumptions: administrative: vague problems and goals, uncertainty, limited information, satisficing choice for resolving problems with intuition. Satisfy minimal decision criteria (time taken to obtain info can"t be justified). Bounded rationality: people have time and cognitive ability to process limited info. Decisions are often made based on intuition: political: like administrative but with inconsistent viewpoints, ambiguous info, bargaining and discussion among coalition members. Assume shareholder diversity: coalition building (solution): informed alliances with 1 goals, gain support by: negotiating, bargaining and discussion, opportunity to several managers to contribute increasing enhancement of commitment to alternatives. Result is ceos that pay less heed in general to external indications of error, be less likely to comprehensively investigate root cause of major errors, repetition of errors: group decision making.
