1
Q
“When a crisis forces choosing among alternatives, most people choose the worst possible one.”
A
Rudin’s Law
2
Q
a shift from a words-oriented to a numbers-oriented planning process can give rise to a false sense of certainty; can reduce dialogue, discussion, argument
A
Lenz
3
Q
Limitations to a SWOT matrix
A
- may favor/overemphasize one external or internal factor
- no weights
- snapshot in time only
- doesn’t show how to achieve competitive advantage; cannot be the end-all
4
Q
4 components of a SPACE Matrix
A
Financial Position, Industry Position, Stability Position, Competitive Position
5
Q
Steps to Creating a SPACE Matrix
A
- Select variables
- Assign numerical value to each of the variables
- Compute average score for the 4 by summing values given to the variables and dividing by no. of vars
- Plot on SPACE Matrix
- Add x axis scores and add y axis scores; plot resultant points
- Draw a directional vector from origin to the new point
6
Q
Limitations of SPACE
A
- snapshot in time
- coordinate could lie back at origin or end up on x axis
- implications if angles are unclear
- relative attrractiveness of alternative strats is unclear
- key underlying int and ext factors are not explicitly considered
- more than 4 dimensions that firms could/should be rated on
7
Q
Differences between BCG and IE Matrices
A
- x and y axes are different
- IE matrix requires more info on divisions
- strat implications of each matrix are different
- 9 quadrants vs 4
8
Q
Principles of Good Governance (Boards of Directors)
A
- Never have more than 2 company’s executives (past or present) in the board
- Never have interlocking directorships
- Never have CEO as chair of the board
- Have directors attend at least 75% of meetings
- Reqire all directors to own a large amount of the firm’s equity
- Never allow executives to serve on the board’s auditing, compensation, nominating committees
- require the board to meet annually to evaluate own performance, w/o top mgt in attendance
9
Q
“Boards of directors are now rolling up their sleeves and becoming much more closely involved with management decision making”
A
Jeff Sonnerfeld
