IPOs, Cash Management, and Corporate Bonds

1. Go Public With An IPO? Hundreds of companies annually hold initial public offerings (IPOs) to move from being pri­vate to being public. In 2014, the number of firms going public was at its fastest pace in years, as investors bid aggressively for new shares of new companies, paying on average 14.5 times annual

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Strategic Research and Development (R&D) Issues

Research and development (R&D) personnel can play an integral part in strategy implemen­tation. These individuals are generally charged with developing new products and improving old products effectively. R&D persons perform tasks that include transferring complex technol­ogy, adjusting processes to local raw materials, adapting processes to local markets, and altering products to particular tastes and

Strategic Management Information Systems (MIS) Issues

Firms that gather, assimilate, and evaluate external and internal information most effectively are gaining competitive advantages over other firms. Having an effective management information system (MIS) may be the most important factor in differentiating successful from unsuccessful firms. The process of strategic management is facilitated immensely in firms that have an effective information system.

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MINI-CASE ON ALIBABA GROUP HOLDING LTD. (BABA) IS SELLING STOCK OR BONDS BEST TO RAISE CAPITAL?

Headquartered in Hangzhou, China, Alibaba is an Internet-based e-commerce retailer that is twice as large as eBay and Amazon combined. Handling about half of all online transactions in China, Alibaba does in China what PayPal and Amazon do in the United States. Alibaba operates Taobao, a consumer marketplace with millions of small Chinese merchants.

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The Strategy-Evaluation Process, Criteria, and Methods

The strategic-management process results in decisions that can have significant, long-lasting consequences. Erroneous strategic decisions can inflict severe penalties and can be exceedingly difficult, if not impossible, to reverse. Therefore, most strategists agree that strategy evaluation is vital to an organization’s well-being; timely evaluations can alert management to problems or potential problems before a

The Three Strategy-Evaluation Activities

Table 9-2 summarizes the three strategy-evaluation activities in terms of key questions that should be addressed, alternative answers to those questions, and appropriate actions for an orga­nization to take. Notice that corrective actions are almost always needed except when (1) exter­nal and internal factors have not significantly changed and (2) the firm is progressing

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The Balanced Scorecard

Do a Google search using the keywords balanced scorecard images and you will see more than 100 currently used balanced scorecards. Note the wide variation in format evidenced through the images. Developed in the early 1990s by Harvard Business School professors Robert Kaplan and David Norton, and refined continually through today, the Balanced Scorecard

Published Sources of Strategy-Evaluation Information

Sydney Finkelstein, professor of management at the Tuck School of Business at Dartmouth, annually releases his list of the worst CEos each year.11 For the year 2014, Finkelstein reported that among the worst CEos were Dick Costolo, CEo of twitter; Eddie Lampert, CEo of Sears Holdings; Phillip Clarke, CEo of Tesco, a British supermarket

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Characteristics of an Effective Strategy Evaluation System

The strategy-evaluation process must exhibit several characteristics to be effective. First, strat­egy-evaluation activities must be economical; too much information can be just as bad as too little information, and too many controls can do more harm than good. Strategy-evaluation activ­ities also should be meaningful; they should specifically relate to a firm’s objectives. They should

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Contingency Planning

A basic premise of good strategic management is that firms strive to be proactive, planning ways to deal with unfavorable and favorable events before they occur. Too many organizations prepare contingency plans just for unfavorable events; this is a mistake, because both minimizing threats and capitalizing on opportunities can improve a firm’s competitive position.

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Auditing

A frequently used tool in strategy evaluation is the audit. Auditing is defined by the American Accounting Association (AAA) as “a systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of cor­respondence between these assertions and established criteria, and communicating the results to interested

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Twenty-First-Century Challenges in Strategic Management

Three particular challenges or decisions that face all strategists today are (1) deciding whether the process should be more an art or a science, (2) deciding whether strategies should be visible or hidden from stakeholders, and (3) deciding whether the process should be more top-down or bottom-up in their firm.15 1. The Art or

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Guidelines for Effective Strategic Management

Failing to follow certain guidelines in conducting strategic management can foster criticisms of the process and create problems for the organization. Issues such as “Is strategic manage­ment in our firm a people process or a paper process?” should be addressed. Some organizations spend an inordinate amount of time developing a strategic plan, but then

MINI-CASE ON TJX COMPANIES, INC. (TJX) IS SECRET STRATEGIC PLANNING BEST FOR TJX?

Headquartered in Framingham, Massachusetts, TJX Companies is a discount apparel and home fash­ions retailer in the United States and abroad. The company owns T. J. Maxx, Marmaxx, Home Goods, TJX Canada, TJX Europe, and Sierra Trading Post. it operates about 1,100 T. J. Maxx stores, 950 Marshalls, 450 Home Goods, and 4 Sierra Trading

Why “Good Ethics Is Good Business”

The Institute of Business Ethics (IBE) recently did a study titled “Does Business Ethics Pay?” and concluded that companies displaying a “clear commitment to ethical conduct” consistently outperform companies that do not display ethical conduct. Philippa Foster Black of the IBE stated, “Not only is ethical behavior in business life the right thing to

Whistle-Blowing, Bribery, and Workplace Romance

As social media and technology have become commonplace globally, three business ethics topics—whistle-blowing, bribery, and workplace romance—have become important strategic issues facing companies. Missteps in any of these three areas can severely harm an organization. 1. Whistle-Blowing Whistle-blowing refers to employees reporting any unethical violations they discover or see in the firm. Employees should

Social Responsibility and Policy

Some strategists agree with Ralph Nader, who proclaims that organizations have tremendous social obligations. Nader points out, for example, that ExxonMobil has more assets than most countries, and because of this, such firms have an obligation to help society cure its many ills. Other people, however, agree with the economist Milton Friedman, who asserts

Environmental Sustainability

The ecological challenge facing all organizations requires managers to formulate strategies that preserve and conserve natural resources and control pollution. Special natural environment issues include ozone depletion, global warming, depletion of rain forests, destruction of animal habitats, protecting endangered species, developing biodegradable products and packages, waste management, clean air, clean water, erosion, destruction of

Wildlife Welfare

Consumers globally are becoming increasingly intolerant of any business or nation that directly or indirectly destroys wildlife, especially endangered wildlife, such as tigers, elephants, whales, songbirds, and coral reefs. Affected businesses range from retailers that sell ivory chess pieces to restaurants that sell whale meat. The United States recently crushed over 6 tons of

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MINI-CASE ON AVON PRODUCTS, INC. (AVP) WOULD CLAIMS OF ETHICAL WRONGDOING BY A COMPANY IMPACT YOUR BUYING THE FIRM’S PRODUCTS?

Headquartered in New York City, Avon Products is the world’s largest direct-seller firm, and by far the largest direct seller of cosmetics and beauty-related items. Avon is the fifth-largest cosmetics and fra­grance firm in the world. The company receives sales from catalogs and online, but the vast majority of its sales come from about

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