MAN 301 Strategic and International Management

Exercise Meeting 1
What is Strategy and Why is it Important?
And: Vision, Mission, Objectives
Additional Material

September 9/10, 2014

Suleika Bort
Please „read“  the following „answers“  as suggestions. They
need to be complemented with the discussion we had in
class.

Management I 2
 Google Case

1. Google was not the first search engine on the Internet, but it has been
the most successful. What  is  Google’s  competitive  advantage?  
1. PageRank algorithm Higher quality search

2. Why is Google so successful at online search while Yahoo has

struggled and partnered with Microsoft?
1. It’s  worth  noting  here  that  in  2000  Microsoft  had  sales  of  $23  billion  and  grew  16%  over  1999  
revenues. They were also highly profitable. To get approved for project expenses in new
areas for a firm this large and successful would take large expected revenue and profit
generation. Microsoft did not see the need to invest because they were already
successful. Google was  a  “one-trick  pony.”  If  they  failed  at  finding  a  way  to  make  money  with  
their great search algorithm, they were out of business.
2. Yahoo was well positioned to perform better than they have in online search. They have had
leadership changes over the past few years and there are indications they were very slow in
making key decisions due to a desire for consensus, which was difficult to find in the senior
management team.

Management I 3
 Examples Objectives
Financial Objectives
An x percent increase in annual
revenues
Annual increases in after-tax profits
of x percent
Annual increases in earnings per
share of x percent
Annual dividend increases of x
percent
Increased shareholder value—in the
form of an upward-trending stock
price
Management I
Strategic Objectives
Winning an x percent market share
Achieving lower overall costs than
rivals
Overtaking key competitors on
product performance or quality or
customer service
Surpass rivals’  performance  in  …
technological capabilities
product variety and scope
brand reputation
4
 Discussion

What are observable features (artifacts and values) of the

Google Culture?

What might be more subtle basic assumptions underlying

these visible features?

Management I 5
 What might be more subtle basic assumptions
underlying these visible features?
Artifacts:
Artifacts • Free breakfast and lunch, games, open
spaces, no formal dresses, 20% rule

Values
• Creativity, openness, innovation, modernity
Values

Basic assumptions
• Job = private life, be creative!, organize
Basic Assumptions parts of your job yourself, your colleagues
are your friends, sustainability (locally
sourced food), love your job, love your
company…

Management I 6
 Discussion

What are pros of a strong corporate culture?

What are possible downsides of strong corporate cultures?

Management I 7
 Discussion

What are pros of a strong corporate What are downsides of a strong

culture?
Orientation
Coordination (low degree of control
effort)
Motivation and loyalty
Complexity reduction
Communication based on a set of
shared assumptions and values
Faster decision making
corporate culture?
Lower degree of flexibility
Thinking in stereotypes, no thinking in
alternatives
Forced conformity
Obstruction of creativity
Fixation on success factors from the
past

Eventually Eventually
Image-building Negative image-effects

Management I 8