Week Two Study Guide: Planning

Readings and Key Terms

• “How the External Environment Affects Managers” subsection in the “The External Environment: Constraints and Challenges” section in Ch. 2 of Management.

o Environmental uncertainty o Stakeholders

• Ch. 8 of Management

o Goals o Plans o Stated goals o Real goals o Strategic plans o Operational plans o Management by objectives o Environmental scanning

• Ch. 9 of Management

o Strategic management o Strategic management process o SWOT analysis o Core competencies o Corporate strategy o Growth strategy o Stability strategy o Renewal strategies o Competitive strategy o Competitive advantage o Strategic leadership

Content Overview

• Components of the external environment

o Environmental uncertainty

• Environmental uncertainty is the amount of change and complexity in an organization’s external environment. • Dynamic environments change frequently. • Stable environments do not change frequently.

o Environmental complexity

• Environmental complexity measures the number of variables in a business environment and how much the business knows about these variables. • The fewer the variables in an organization’s environment and the greater the organization’s ability to know about the variables, the less the uncertainty and risk for the firm.

o Stakeholders

• Stakeholders are the groups or individuals affected by an organization’s actions. • Stakeholders can be classified as internal or external, depending on their relationship to the organization.

• Planning overview

o Planning involves defining goals and developing strategies to meet the defined goals. o Managers must plan to provide