Explain what questions managers need to ask first to begin the strategy management process. Managers need to ask: what are we about? What is our mission? How do we accomplish our goals? What are our values? And managers need to begin with the end in mind. 2.
Disney’s mission is to make people happy. Better World Books' mission is to collect and sell books online to fund literacy initiatives worldwide. How have these mission statements impacted firm performance? Do mission statements affect competitive advantage? The research is mixed when it comes to the relationship between mission statements and competitive advantage. In the case of Disney, the mission to make people happy is used to guide organizational behavior in many aspects, including employee training and how customers are treated. This translates into competitive advantages for Disney. However, mission statement by themselves do not improve firm performance; it is the strategic commitment to the mission that influences performance. If a firm has well-crafted mission statement, in alignment with its vision, values, and strategy, then a mission statement can help a firm achieve superior performance and thus competitive advantage. Mission statement can also negatively affect competitive advantage as in the case of Better World Books. 3.
How is a real options perspective different from calculating the net present value?
A real options perspective is decision making where a large investment decision is broken down into a set of smaller decisions that are staged sequentially over time to obtain more information. Net present value is a numeric calculation to help managers determine whether or not an investment is a rational decision. Both tools are from finance and have been used in evaluating strategic projects.
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