Strategic Planning & Decision Making Flashcards

In stakeholder analysis for strategic planning, the 'power-interest grid' is used to:

Answer: Prioritize stakeholders by their influence and level of concern in the strategy

The power-interest grid categorizes stakeholders by their power to affect the organization and their interest in its strategy, guiding engagement priorities.

Which of the following best describes 'competitive convergence' as a strategic risk?

Answer: Multiple firms adopt similar strategies, eroding differentiation and industry profitability

Competitive convergence occurs when rivals imitate each other's best practices, causing strategies to blur and reducing overall industry profitability.

A company performs a 'pre-mortem analysis' before launching a strategy in order to:

Answer: Proactively identify potential failure modes by imagining the strategy has already failed

A pre-mortem asks decision makers to assume failure has occurred and work backward to identify causes, surfacing risks before launch.

The concept of 'dynamic capabilities' in strategic management refers to an organization's ability to:

Answer: Sense, seize, and reconfigure resources in response to environmental changes

Dynamic capabilities, developed by Teece et al., describe higher-order abilities to integrate, build, and reconfigure competencies as markets evolve.

Which quantitative technique uses mathematical optimization to allocate scarce resources across competing strategic objectives?

Answer: Linear programming

Linear programming finds the optimal allocation of limited resources (such as budget, capacity, or labor) subject to defined constraints and objectives.

When a strategic plan calls for 'horizontal integration,' the organization is most likely planning to:

Answer: Merge with or acquire a competitor at the same level of the value chain

Horizontal integration involves acquiring or merging with competitors operating at the same stage of the industry value chain to gain market share.

In the context of strategic decision making, 'bounded rationality' implies that managers:

Answer: Make the best decisions possible given cognitive limits, time, and incomplete information

Herbert Simon's bounded rationality concept acknowledges that cognitive limits and incomplete information constrain decision makers from achieving full rationality.