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MBA 705: Organizational Strategy and Policies Louisiana State University Shreveport – Dr. Michael D. Meeks Socratic Skill Builder #1: What is Business? What is Strategy? [80 points] Due Date: Sunday January 28th 11:59pm Maria Soto: Question #1: In my own words, a business is an organization in which the owner/founder hopes to make a profit in exchange for a service or goods. I have worked for a few businesses in which I have had a glimpse of informal business exposure. Each business has provided goods or services in exchange for money. Based on this experience is how I came up with my definition above. When I was a teenager, I worked at TJMaxx they sold clothing, household items, shoes, etc. in exchange for money. My current employer provides a service. To find people a place to call home in exchange for rent ($). Business exists to fill a gap that has not been filled. Howard Shultz is a great example of this. He wanted to fill a gap that had not been filled. He became inspired during a trip to Italy and realized we did not have something like this in the states. He wanted to replicate a similar experience somewhere it did not exist. Due to this idea, we now have thousands of Starbucks throughout the globe. The investors/developers we provide our property management services saw a lack of housing in our area and started to develop multi-family housing. They saw the housing gap and wanted to fill it. Now they assets throughout GA and now expanding into Florida and Tennessee. A business is a complex organization with different components that go into play. Many people participate in a business because they see how they can impact their customers in a meaningful way and at the same time make a profit. Question #2: The bottom line is that most businesses do not have any strategies. Strategy has different concepts. Most businesses do not view strategy in the 5 different views which can allow problems to arise for their organization. The 5 P’s is something that was developed by Heny Mintzberg. This includes Plan, ploy, pattern, position, perspective. All the different paradigms must be seen or incorporated as a part of an organization’s strategy. This allows for lesser issues to arise and gives the organization an opportunity to be successful. 1. Issue #1: Plan—Strategic plans are a huge part of strategy. It allows for the organization to a roadmap of steps to achieve in order to win or accomplish desired goals. You can’t just want something and not know how you are going to get there. Otherwise, you will never get there. It’s like planting a tree and not watering it but still expecting it to grow. Strategic plans can also change over time and that is okay and should be considered. The world changes rapidly therefore an organization should have strategic plans with the future in mind. A great example of an industry that needs to plan for the future is the real estate industry. Their success can be tied to the ever-changing housing market/interest rates. 2. Issue #2: Ploy—Strategic ploy is way of tricking your competitors for your own benefit. This requires a lot of innovation. Innovation can lead to success. However, this can also cause a fight between competitors therefore, I would tread lightly with this one. 3. Issue #3: Pattern—Strategy as a pattern to me equals consistency. Consistency in products and services. Consumers very much enjoy consistency. For example, when I go to Starbucks yes, the menu can change from time to time but what does not change is their customer service and taste. I am always greeted at the drive thru with Hello my name is molly what is your name. Customers very much appreciate this. Consistency matters. 4. Issue #4: Position—Strategy as a position is where does the organization stands in its own industry compared to its competitors. Are you a high-end restaurant or fast-food restaurant? It is important to know where to stand because you cannot serve everyone in the world. Choose your stance. Know where you are going to complete. Choose your playing field. Choose the right playing field for you. You cannot play everywhere. Imagine if Motel 6 tried to compete with the Ritz Carlton? That would be a disaster for Motel 6. 5. Issue #5: Perspective—Strategy as perspective is how leaders/employees view the competition/environment. Viewing strategy as a perspective gives leaders a way to find new opportunities for the organization as well as make better decisions that will benefit the organization. Keeping an open mind and thinking of endless possibilities. Question #3: 1. Factor #1: Planet—Keeping the planet in mind while running a business is one of the three most influential factors of success of a business. We live in a time where we have exhausted some of our planet’s natural resources without doing anything about them. Now this has gotten a lot of attention from the public therefore it is important to keep our planet in mind. After all, we would be nothing without our planet. Everything we use is made from our earth. From cotton to wood to water. This has become a big factor for companies to include in their strategies. Nike for example is making changes to some of the supplies used to be more green or ecofriendly. They are using recycled supplies to make their products amongst other stuff. One of their slogans used in the optional supplemental videos is “Innovate for a better world”. Now reflecting on my own employer or the developers we work for I cannot think of a single thing that they are doing to give back to our planet. For example, the developers develop tons of multifamily housing in which tons of wood is used. Think about it where does wood come from? Trees! Trees help clean the air of our planet. Perhaps a good idea for them would be to plant three trees for every tree they cut down.

2. Factor #2: People—Throughout the readings and videos you hear repeatedly to always keep your consumers in mind. People also means to do the right thing socially. For example, Starbucks wanted to create a “third place” for their consumers to relax. Such a place was not very accessible in the states. By keeping the consumer in mind is how he came up with Starbucks and its success. Starbucks does not only keep its consumer in mind but also strives to buy coffee beans from farmers who get paid fair wages and work under humane conditions. 3. Factor #3: Although profit came in list in the order of importance it does not mean that we should not keep trying to make money or create strategies that will help the long-term success of a business. However, many businesses have found a way to be successful and at the same time keep the planet and people in mind. All things considered, I believe that if you keep people and the planet as part of the organization’s strategies there is still a way to make a profit. There is a saying to Do good and do well. This can also gain your organization a good reputation for always abiding by the right things. This then will attract more consumers. Nobody wants to buy goods or services from someone who is exhausting the planet we live in or buy from someone who benefits from child labor for example. Question #4: 1. Chap 1 (MSM): Chapter one introduced the idea of strategy and strategic management. It informed us that strategic management provides the instruments needed for sustainability/success of organizations. Strategy is a complex idea in which it can have multiple paradigms. Those being viewing strategy as the following: Plan, Ploy, Pattern, position, and perspective. These paradigms were developed by Henry Mintzberg. Most strategies can be planned however, plans do not always happen the way we want them to and therefore to pivot new strategies come about and those are the ones that are executed. These different strategies are called the intended, emergent, and realized strategies. Chapter one also describes how strategic management involves both innovation(art) and science. I view strategy/strategic management as a science. All my undergraduate students were science based and as I read through this chapter it reminded me of scientific methods. First you have an observation/ question then you research the topic, then you form a hypothesis, then you test your hypothesis, you analyze your data and lastly report your results. Of course, it is not exactly how strategic management works but it is very similar. In strategic manager first you must set a goal, then you plan, then you execute, then you monitor. Due to the similarity in both strategic management and the scientific method I believe strategic management is more like a science than art. 2. Chap 2 (MSM): Chapter two starts by defining vision, mission, and goals and how the CEO/leader must ensure their company has them in place. Mission and vision are important, but it is critical to have great goals. You can achieve this by using the SMART goals. SMART stands for specific, measurable, aggressive, realistic, and time bound. To ensure that everything is working properly the company’s performance must be measured. This can be done in multiple ways such as using the balance score card and the triple bottom line. Both tools help leaders/CEO know where their company stands performance wise. Performance can be external and internal. There are different types of CEOs regarding fame and reputation. This chapter explains the pros and cons of having a celebrity and non-celebrity CEO. I believe having a known CEO with integrity can benefit the company in many ways. His/her fame can help with getting the company known globally (if that is the goal) and it also helps keep the company in check in the sense that because it is always in the spotlight they must tread lightly especially if they are doing things they are not supposed to. A CEO/leader should also have high emotional intelligence. He is the one who leads the company and is looked at with a higher regard. He or she cannot make important decisions based on emotion because that never ends well. For example, my previous community director (the leader of the asset I am at) was upset that our regional director asked her to take out her tongue ring because it was unprofessional. Instead, and thinking logically she went based off emotionally and fought our regional director to keep it. In doing so, she ended up being fired. This affected our entire team, and it showed in our sales. Had she just complied then we wouldn’t have lost leases or her. My manager may not have been the CEO of the company but she was the leader and person in charge of our community. 3. Chap 3 (MSM): Chapter three starts off talking about a company’s/organizations environment and how that can shape its strategies. The environment an organization is in can be examined more thoroughly via the PESTEL analysis. PESTEL stands for political factors, economic factors, social factors, technological factors, environmental factors, and legal factors. Another analysis that arises in this chapter is Michael Porter’s Five forces analysis. With analysis you can thoroughly examine the industry in which the organization is in. The five forces include: new entrants, buyers, substitutes, suppliers, and rivalry. This analysis will aid in determining how much potential money or profit exists in that specific industry. Knowing how much profit exists in an industry is very important to CEOs or leaders to determine their next moves to win. I believe both PESTEL and porters five force analysis are important. Pestel allows you to know external conditions that can affect your organization. For example, I am in property management, and we manage new construction multifamily communities for our developer Brand Properties. The asset I am currently working on opened in 2022 in the beginning of our opening we were leasing so much and high rates. We were the newest multifamily development in the area, and everyone wanted to live here. Our traffic started to slow down due to a delay in construction. Construction was delayed a few months due to parts, lumber, etc. not arriving on time and being on back order. Once we finally finished construction the interest rates shot up so high that we were unable to sell this asset. The economic conditions affected the sale of this asset. The developers/owners must sit on this asset until the economic conditions get better. Now the challenge we are experiencing is that more multiple family assets have been constructed within a few miles radius that we are no longer the hot commodity therefore our traffic has slowed down and we cannot reach the desired occupancy to put the asset back on the market. Perhaps the development team did not do a five-force analysis or create a great strategy to foresee new developments being built in our area. Question #5: 1. Introduction (PTW): The introduction briefly goes over what strategy is and how some leaders use strategies in unsuccessful ways. According to the authors some leaders do not use strategies correctly because they do not have the correct idea of what a strategy really is. They see strategy as solely a vision, a plan, do not forward think, optimization of the status quo, and as following best practices. They also give a brief summer of what the chapters to come will go over.

2. Chap 1 (PTW): In chapter one the authors go over what strategy is. They go over the 5 questions you should answer to develop a strategy for your business or organization. The questions are: What is your winning aspiration? Where will you play? How will you win? What capabilities must be in place? What management systems are required? These five questions are combined to create an “integrated cascade of choices”. Meaning they all intertwine with one another. Each section of the business should have these questions answered to make good choices for the company or organization. 3. Chap 2 (PTW): Chapter 2 goes more into depth about the first question of the integrated cascade of choices: what is your winning aspiration? The authors suggest developing your aspiration/goal is to start with your customers/consumers in mind rather than money. All the big companies have their customers in mind first some of those are Nike, Starbucks, McDonalds, etc. It is important to define what winning is to you. This is the part where your organization outlines the goals or objectives (keeping the customer in mind). 4. Chap 3 (PTW): chapter 3 talks about the where to play which then leads to where not to play and the importance of where you play. They give suggestions of how to break down where to play by identifying the following: Geography, product type, consumer segment, distribution channel, vertical stage of production. Just how it is important to make specific narrow goals it is also important to choose specific playing fields. The authors then go into talking about the dangerous temptations of facing to choose where to pay and attempting to serve everyone everywhere, buying out due to being in an unattractive position, and thinking you have no say or choice in where to play. These temptations can destroy strategy. All in all, this model of the integrated cascade of choices the authors came up with is a great way to create strategies that can potentially lead a company to success. It allows a company to create goals that can be executed and monitored to see if they are working. One flaw that I find is how is one to know if the organization chose the right goals, objectives, playing fields, monitoring systems, etc. How does a company know if their strategy is a good one or bad one? It’s all about perspective in that instance. No one is going to purposely come up with a bad strategy for their company. No one wants to fail; therefore, I do believe that some strategies will be a matter of trial and error. That is why it is important to get as specific as possible about the answer to all the questions the cascade asks because no one company can serve everyone everywhere. Doing this will allow for more room for success instead of failure. Question #6: Firm performance is how well a company is doing relative to the goals set in place or industry. If the goal was to sell 10 apples in 10 days and it is now day 9 and only 3 apples have been sold, then the company is not performing well based on the goals set. However, performance can also be measured relative to the industry. Our company sold 3 apples in 9 days, however Steve’s company only sold 1 apple in 9 days. In that aspect our company is not doing so badly. There are different methods used to measure firm performance that were introduced this week and those are the balanced scorecard and the triple bottom line. The balance score card brings attention to four areas: financial measures, customer measures, internal process measures, learning and growth measures. Financial measures refer to how effective the firm is doing (how are the profits). Customer measures refer to customer service, attraction, and retention. Are we producing things our customers like to retain their loyalty. Do they like the service we provide them with as well as the goods? Internal process measures speak about the company itself and its employee’s competence. Lastly, learning and growth measures are about learning to evolve and grow. Creating new strategies or ideas as well as understanding and learning that the environment is ever changing and therefore, we must learn to make necessary changes. In this way it encourages employees to learn new skills and grow. This aids in planning for the future. The next tool used to measure firm performance is the triple bottom line. The triple bottom line includes the three p’s: People, Planet, Profits. This tool is important to make sure the firm is being socially responsible, environmentally sustainable, and of course making profit while keeping up with the people and planet. To be honest, I never really thought about firm performance in the triple bottom line aspect. This is a concept that I am new to. Most employers that I have worked for focused more on the balanced score card which was focusing on the financial ($), customer satisfaction, and how well we were performing as employees. It was never set in place how the world viewed the company or if we were being pro the environment. Therefore, now having heard of the triple bottom line I think it is of the essence to keep the environment in mind as well as being socially responsible. Just like Ralph Waldo Emerson said, “doing well is the result of doing good”. Question #7: The Starbucks brand/company is a huge success due to Howard Schultz. Shultz was inspired by a trip to Italy in which he went to a café and loved the experience he had there. He wanted to replicate such an experience back home in the states. He wanted to offer people a third place to relax and enjoy coffee. Schultz always keeps the consumer in mind and that is very important to him. Which attributes to his success. Starbucks’ key successes are due to having great strategic management. Starbucks made great decisions on where to play and very well knew he could not just play everywhere. He did his research and knew that Europe was a region with weak growth. My assumption would be because places like Starbucks perhaps with even better coffee already heavily exist in Europe. He decided to open up stores in China and India where there were emerging markets in China and Indian. China and India where places where people there weren’t big coffee drinkers. In China green tea was the popular drink and in Indian chai tea was the drink of choice. Throughout all the company success Schultz never kept his mind off the consumers and employees. He was a very personal person. In China, he went as far as meeting employees and their families. He wanted Starbucks to be viewed as different in the eyes of their consumers and employees. Offering great benefits and a good work environment to his employees, he was able to give the customer the best of services. Both in customer service and in the drinks. He also very diligently studied both China and India’s culture to know how to better serve in those countries. The key issues that I see for Starbucks are how fast it is growing and the emerging new technology it has introduced. For example, employees not only had to attend to customers in the store they also must deal with drive through and mobile ordering apps. The customer service and quality of

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their products have been declining. I first saw this when I was a Starbucks regular. Certain stores would not prepare the drinks well and sometimes you had to wait a long time to get your items. To be honest I do not think I know the difference between technology and non-technology businesses. I say this to say that now in days technology plays a big role in society. You can see technology being used everywhere. In retail, hospitability, etc. Even the smallest of stores uses some type of technology. Starbucks I would say is a technology business due to its mobile app. The mobile app serves different functions like ordering ahead, rewards program, and even storing money on the app itself for future purchase. © 2024 Dr. Michael D. Meeks

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