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Strategic-Management-Performance-Task-Week-5 (1)

The document outlines key concepts from Chapter 3 of a Strategic Management course, focusing on the importance of understanding a firm's internal organization. It discusses value creation, the distinction between tangible and intangible resources, capabilities, core competencies, value chain analysis, outsourcing, and the identification of internal strengths and weaknesses. Additionally, it highlights the potential risks of core rigidities if competencies are not continuously developed.

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Rio Ramil
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75 views

Strategic-Management-Performance-Task-Week-5 (1)

The document outlines key concepts from Chapter 3 of a Strategic Management course, focusing on the importance of understanding a firm's internal organization. It discusses value creation, the distinction between tangible and intangible resources, capabilities, core competencies, value chain analysis, outsourcing, and the identification of internal strengths and weaknesses. Additionally, it highlights the potential risks of core rigidities if competencies are not continuously developed.

Uploaded by

Rio Ramil
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Name: Score:

Course/Year: Date:

Strategic Management
Performance Task (Week 5)
Chapter 3 – The Internal Organization

I. Read and Study “Chapter 3 – The Internal Organization” in our PDF textbook.
II. Review Questions
1. Why is it important for a firm to study and understand its internal organization?
- Understanding internal organization improves efficiency, communication, and decision-
making within firms.
2. What is value? Why is it critical for the firm to create value? How does it do so?
- Value is the worth of a something.Its important for the firm to create value is to attract
the investors to invest in your company and by increasing the firm's market share
3. What are the differences between tangible and intangible resources? Why is it important for
decision makers to understand these differences? Are tangible resources linked more closely
to the creation of competitive advantages than are intangible resources, or is the reverse
true? Why?
- Tangible resources are physical assets, while intangible resources are non-physical assets
like intellectual property. Decision makers need to understand these differences to allocate
resources effectively. Both types can contribute to competitive advantage, but the value of
each depends on the firm's strategy and industry context.
4. What are capabilities? How do firms create capabilities?
- Capabilities are a firm's abilities to perform tasks effectively. Firms create capabilities
through investments in resources, processes, knowledge, and skills.
5. What are the four criteria used to determine which of a firm’s capabilities are core
competencies? Why is it important for firms to use these criteria in developing capabilities?
- The four criteria for core competencies are being valuable, rare, costly to imitate, and
non substitutable. It's crucial for firms to use these criteria to focus their efforts
on unique strengths that offer sustainable competitive advantages, ensuring .
strategic differentiation and long-term success.

6. What is value chain analysis? What does the firm gain when it successfully uses this tool?
-Value chain analysis assesses a firm's activities to identify sources of competitive advantage.
Successful use enhances efficiency, identifies cost-saving opportunities, enhances product differentiation,
and aids in strategic decision-making for optimal resource allocation.
7. What is outsourcing? Why do firms outsource? Will outsourcing’s importance grow as
we progress in the twenty-first century? If so, why?
- Outsourcing is delegating tasks to external providers. Firms outsource to reduce costs,
access expertise, and focus on core activities. Its importance may grow due to
globalization, technological advancements, and specialized service providers.
8. How do firms identify internal strengths and weaknesses? Why is it vital that managers
have a clear understanding of their firm’s strengths and weaknesses?
- Firms identify strengths and weaknesses through internal audits, benchmarking, and
SWOT analysis. Managers need a clear understanding to leverage strengths, address
weaknesses, and formulate effective strategies for competitive advantage, ensuring optimal
resource allocation and sustained performance.
9. What are core rigidities? What does it mean to say that each core competence could
become a core rigidity?
- Core rigidities are former core competencies that hinder adaptation. Each core
competence could become a rigidity if not continuously developed and aligned with market
demands, impeding innovation and responsiveness to changing environments.

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