Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 4 -1 “ Great spirits have always encountered violent opposition from mediocre minds.” – Albert Einstein Internal Assessment “ Weak leadership can wreck the soundest strategy.” – Sun Tzu

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 4 -2 Key Internal Forces Distinctive Competencies: Firm’s strengths that cannot be easily matched or imitated by competitors

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 4 -3 Key Internal Forces Distinctive Competencies: Building competitive advantage involves taking advantage of distinctive competencies

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 4 -4 Resource Based View (RBV) Approach to Competitive Advantage Internal resources are more important than external factors

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 4 -5 Resource Based View (RBV) Empirical Indicators Rare Hard to imitate Not easily substitutable

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 4 -6 Integrating Strategy & Culture P attern 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 as the correct way to perceive, think, and feel Organizational Culture

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 4 -7 Management Functions of Management 1. Planning- 2. Organizing- 3. Motivating- 4. Staffing 5. Controlling

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 4 -8 Management Planning Stage When Most Important Function Strategy Formulation Organizing Strategy Implementation Motivating Strategy Implementation Staffing Controlling Strategy Implementation Strategy Evaluation

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 4 -9 Management Planning Beginning of management process Bridge between present & future Improves likelihood of attaining desired results

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch Planning Synergy  Can develop through planning  Exists when everyone pulls together as a team that knows what it wants to achieve

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch Management Organizing Achieves coordinated effort Defines task & authority relationships Determines who does what Determines who reports to whom

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch Management Organizing  Breaking down tasks into jobs  Combining jobs to form departments  Delegating authority

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch Management Motivating Influencing to accomplish specific objectives Four components include:  Leadership  Group dynamics  Communication  Organizational change

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch Management Staffing Recruiting Interviewing Testing Selecting Orienting Training Developing Caring for Evaluating Rewarding Disciplining Promoting Transferring Demoting Dismissing

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch Management Controlling Establishing performance standards Ensure actual operations conform to planned operations Taking corrective actions

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch Management Audit Checklist Is employee absenteeism low? Is employee turnover low? Are the reward mechanisms effective? Are the organization’s control mechanisms effective?

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch Marketing Marketing Functions 1. Customer analysis – evaluating the customer 2. Selling products/services - testing 3. Product & service planning 4. Pricing – can you market afford it 5. Distribution – getting it to market—where is it avalable 6. Marketing research 7. Opportunity analysis

Financial Ratios ROA – Net Income/Total Assets ROE – Net Income/Total Stockholders Equity Quick Ratio – Current Assets/Current Liabilities Net Profit Margin – Net Income/Sales VERY IMPORTANT- What do these calculations reveal to us? Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 4 -18

Practice on Calculating Ratios See attached sheet Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 4 -19