Business Strategy and Corporate Governance: Key Concepts and Principles
Understanding the Triple Bottom Line
The triple bottom line refers to the three key dimensions of organizational performance: economic prosperity, social responsibility, and environmental sustainability.
Business Models and Strategy Implementation
Companies like HP utilize a multi-component system/installed base model, where they sell both printers and printer cartridges. Strategy implementation involves putting strategies into action through programs, budgets, and procedures.
The Role of the Board of Directors
Boards of directors play a crucial role in corporate governance. Affiliated directors are not employees but handle legal or insurance needs. The primary responsibility of the board is to monitor management’s actions and ensure the company’s long-term success.
Types of Directors
- Affiliated Directors: Handle legal or insurance needs.
- Outside Directors: Not employed by the corporation.
Competitive Intelligence and Social Responsibility
Competitive intelligence units monitor competitors to gain insights and inform strategic decisions. Economist Milton Friedman argued that a business’s sole responsibility is to maximize profits, but the concept of social responsibility suggests a broader obligation to society.
Strategic Groups and the Value Chain
A strategic group consists of firms pursuing similar strategies with similar resources. The value chain encompasses the linked set of value-creating activities from raw materials to final products.
Moral Relativism and Porter’s Five Forces
Moral relativism suggests that morality is subjective and varies across cultures. Porter’s Five Forces model analyzes industry attractiveness by considering factors like the threat of new entrants and the bargaining power of suppliers.
Economies of Scope and Competitive Advantage
Economies of scope arise when companies share activities across different products or services, reducing costs. Competitive advantage stems from the ability to identify and respond to environmental changes effectively.
Strategic Vision and Corporate Strategy
A strategic vision outlines a company’s aspirations for the future. Corporate strategy defines the overall direction and scope of the organization.
Technology Transfer and Learning Organizations
Technology transfer involves moving innovations from the lab to the market. Learning organizations excel at creating, acquiring, and transferring knowledge to adapt and improve.
Marketing Mix and Distinctive Competencies
The marketing mix comprises the 4 Ps: product, place, promotion, and price. Distinctive competencies are superior core competencies that provide a competitive edge.
Global and Multidomestic Industries
Global industries offer standardized products worldwide, while multidomestic industries tailor products to local markets.
Stakeholders and Corporate Mission
Stakeholders include employees, customers, suppliers, and communities affected by the company’s actions. The corporate mission defines the organization’s purpose and reason for existence.
Tacit Knowledge and the Role of the Board
Tacit knowledge, which is difficult to articulate, is valuable for sustainable competitive advantage. The board of directors plays a crucial role in monitoring management and ensuring responsible corporate governance.