Walton Arts Center Strategic Planning Retreat Organizational Theory Paper

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Question Description

1200 words total. 3 APA cited references and reference list. NO PLAGIARISM PLEASE!!!

1. In a narrative format, discuss the key facts and critical issues presented in the case.

2. .Considering the challenges she is facing, what should Anita's plan be for the strategic planning retreat? How would you reformulate the Art Center's mission? Does the Center need a new strategy? Why or why not?

3. How do some organizations predict the short and long-term future? Explain in detail how a downturn in the economy affects not-for-profit organizations, as opposed to for-profit ones.

4. Identify and explain the factors that demonstrate the Walton Art Center's utilization of the business-level differentiation strategy. What changes could be enacted that would alter the Center's strategy to one of low-cost? Would this be advisable? Why?


For question five 250 words total. 2 APA cited references and reference list. NO PLAGIARISM PLEASE!!!

5. Explain the Environmental Scanning Process.Which element do you feel warrants attention?

e


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Managing the External Environment Chapter Outline: 3-1 The Organization’s Industry 3-2 The Organization’s Macroenvironment 3-3 Managing Environmental Uncertainty 3-4 Environmental Scanning 3-5 Forecasting the Environment 3-6 Crisis Management Summary Review Questions Endnotes Key Terms boundary-spanning buffering crisis crisis management culture Delphi technique environmental scanning V I C K E R S , T E A R D R A 1 1 9 1 T S gross domestic product (GDP) imitation industry life cycle judgmental forecasting macroenvironment multiple scenarios population ecology self-reference criterion time series analysis uncertainty 3 An organization cannot function effectively unless its managers understand the forces outside of the organization that influence its performance and survival. There are two components of the organization’s external environment: the industry—the collection of competitors that offer similar products or services—and the complex network of political-legal, economic, social, and technological forces known as the organization’s macroenvironment. This chapter addresses each of these components. 3-1 The Organization’s Industry Each business unit operates among a group of companiesVthat produce competing products or services known as an industry. Although Ithere are usually some differences among competitors, each industry has “rules of combat” governing C such issues as product quality, pricing, and distribution. This is especially true in K industries that contain a large number of firms offering standardized products and E States generally offer services. For example, most service stations in the United R at prices that do not regular unleaded, mid-grade, and premium unleaded gasoline differ substantially from those at nearby stations. If a rivalS attempts to sell different grades, it may experience difficulty securing reliable sources , of supply and may also confuse consumers by deviating from the standard. macroenvironment the general environment that affects all business firms in an industry, which includes political-legal, economic, social, and technological forces industry a group of competitors that produces similar products or services In a perfect world, each organization would operate in oneT clearly defined industry. In the real world, however, many organizations compete in multiple industries, and E it may be difficult to clearly identify the industry boundaries. As such, the concept A of primary and secondary industries may be useful in defining an industry. A R competitors, whereas primary industry may be conceptualized as a group of close D distinction between a secondary industry includes less direct competition. The primary and secondary industry may be based on objective R criteria such as price, similarity of products, or location, but is ultimately a subjective A call. 3-1a Porter’s Five Forces Model 1 Industry factors have been found to play a major role in the 1 performance of many 1 companies, with the exception of those that are its notable 9 leaders or failures. As such, one needs to understand these factors at the outset before delving into 1 the characteristics of a specific firm. Michael Porter proposed a systematic means T Porter’s “five forces” of analyzing an industry’s potential profitability known as S model. As aforementioned, this model is based on IO economics and suggests that industry structure is the primary determinant of firm performance. According to Porter, an industry’s overall profitability depends on five basic competitive forces, the relative weights of which vary by industry: 1. The intensity of rivalry among incumbent firms: Competition intensifies when a firm identifies the opportunity to improve its position or senses competitive pressure from other businesses in its industry, which can result Organizational Theory 3-2 in price wars, advertising battles, new product introductions or modifications, and even increased customer service or warranties.2 2. The threat of new competitors entering the industry: Unless the market is growing rapidly, new entrants intensify the fight for market share, lowering prices and, ultimately, industry profitability. 3. The threat of substitute products or services: Firms in one industry may be competing with firms in other industries that produce substitute products, offerings produced by firms in another industry that satisfy similar consumer needs but differ in specific characteristics. 4. The bargaining power of buyers: The buyers Vof an industry’s outputs can lower that industry’s profitability by bargaining for higher I quality or more services and playing one firm against another. C 5. The bargaining power of suppliers: Suppliers K can extract the profitability out of an industry whose competitors may be unable to recover cost increases by raising prices. E R S , T E A R D R A Figure 3.1 Porter’s Five Forces Model 1 Each of the five forces suggests that potential profits within 1 an industry may be high, moderate, or low. Analyzing the five forces for an organization’s9industry can help managers understand the potential for superior performance within that industry. It does not guarantee high or low 1 performance, as there are usually substantial performance differences among organizations T in the same industry. Porter’s five forces model, however, provides a useful framework for S thinking about the effects an industry has on an organization. There are other valid perspectives on organizations and industries besides Porter’s view. As Porter suggests, organizations functioning in a given industry generally possess a number of similarities that are not typically shared by those in other industries. Fast-food restaurants, for example, tend to be labor-intensive and cost-conscious, with established systems to provide fast, efficient service to customers. However, new organizations may “buck the trend” from to time by taking different approached designed to respond to changes in the environment more Organizational Theory 3-3 effectively. Whereas Porter’s five forces model emphasizes similarities among organizations within an industry, the population ecology perspective emphasizes organizational diversity and adaptation.3 According to this view, organizations can be better understood by examining when and how they are formed, why new organizations might vary from existing ones, and ultimately why some survive when others fail. Some insight into this view can be obtained by considering the life cycle through which an industry passes. 3-1b Industry Life Cycle Like organizations, industries develop and evolve over time. Not only might the V constantly, but the group of competitors within an organization’s industry change nature and structure of the industry can also change as it Imatures and its markets become better defined. An industry’s developmental stage C influences the nature 4 In theory, each of competition and potential profitability among competitors. K industry passes through five distinct phases of an industry life cycle. E R S , Figure 3-2 population ecology a perspective on organizations that emphasizes the diversity among organizations that perform similar functions and utilize common resources industry life cycle the stages (introduction, growth, shakeout, maturity, and decline) through which industries are believed to pass A young industry that is beginning to form is considered to be in the introduction stage. Demand for the industry’s outputs is low becauseTproduct and/or service awareness is still developing. Most purchasers are first-time buyers, and tend E to be affluent, risk tolerant, and innovative. Technology A is a key concern in this stage because businesses often seek ways to improve production and distribution R efficiencies as they learn more about their markets. Organizations emerging in D this stage often attempt to capitalize on first-mover advantages, similar to the R prospector strategy discussed in a previous chapter. A Normally, after key technological issues are addressed and customer demand begins to rise, the industry enters the growth stage. Growth continues during this stage but tends to slow as the market demand approaches saturation.1Fewer first-time buyers 1 remain, and most purchases tend to be “upgrades” or replacements. Some of the industry’s weaker competitors may not survive. Those that9do establish distinctive competencies that can help distinguish them from their competitors. 1 Shakeout occurs when industry growth is no longer rapid T enough to support the increasing number of competitors in the industry. As a S result, an organization’s growth is contingent on its resources and competitive positioning instead of a high growth rate within the industry. Marginal competitors are forced out, and a small number of industry leaders may emerge. Maturity is reached when the market demand for the industry’s outputs is completely saturated. Virtually all purchases are upgrades or replacements, and industry growth may be low, nonexistent, or even negative. Industry standards for Organizational Theory 3-4 quality and service have been established, and customer expectations tend to be more consistent than in previous stages. The U.S. automobile industry is a classic example of a mature industry. Firms in mature industries often seek new uses for their products or services or pursue new markets, often through global expansion. Because the field has become crowded and customers have become more sophisticated, many successful organizations begin to emphasize efficiencies in order to offer greater value. The decline stage occurs when demand for an industry’s products and services decreases and often begins when consumers begin to turn to more convenient, safer, or higher quality offerings from organizations in substitute industries. Some firms may divest their business units in this stage, whereas others may seek to “reinvent themselves” and pursue a new wave of growth associated with a similar product or service. The life cycle model is a useful tool for evaluating an industry’s development and the types of organizations V that may be most likely to succeed. The key problem with the model, however, is that identifying an industry’s I follow these exact stages or at predictable intervals.5 precise position is often difficult, and not all industries For example, the U.S. railroad industry did not reachC maturity for many decades and extended over a hundred years before entering decline, whereas the personal computer industry began to show signs of maturity after K only seven years. E R S 3-2 The Organization’s Macroenvironment , The second component within an organization’s external environment is the macroenvironment and consists of political-legal, economic, social, and technological forces. Ultimately, the effects of these forces create T forces in the macroenvironment affect all competitors opportunities and threats for an organization. In general, within a given industry, although the nature of the effects E can differ among firms. For example, a sharp economic decline may threaten the livelihood of a luxury automobile manufacturer, while at the same time creating an A opportunity for a carmaker with substantially lower costs. R Most organizations have little, if any influence overD the macroenvironment. On occasion, a large, dominant firm such as Wal-Mart may be able to exert someRdegree of influence over one or more aspects of the macroenvironment. For example, the giant retailer’s political action committee contributed about $1 million A to candidates and parties in the United States in both 2003 and 2004, presumably in an effort to influence regulation that might affect the organization.6 However, most organizations must seek to join with others in 1 trade and other associations in an attempt to exert 1 some degree of influence on a particular factor in the 9 macroenvironment. 1 T S Figure 3-3 Some factors may be placed neatly into one of these interrelated categories, whereas others may straddle two or more classes. For example, automobile safety has political-legal (e.g., legislation requiring that safety standards be met), social (e.g., consumer demands for safe vehicles), and technological (e.g., innovations that may improve safety) dimensions. For clarity concerns, however, each category of macroenvironmental forces is discussed separately. Organizational Theory 3-5 3-2a Political-Legal Forces Political-legal forces include such factors as the outcomes of elections, legislation, and judicial court decisions, as well as the decisions rendered by various commissions and agencies at every level of government. Military conflicts are also included in this arena and can also influence how a number of industries operate, especially those with tight global ties. In 2003, for example, during the beginning of the war in Iraq, many American firms modified their promotional strategies, fearing that their television advertisements might be considered insensitive if aired alongside breaking coverage of the war. At the same time, others began to plan for meeting the anticipated future needs in Iraq for such products as cell phones, refrigerators, and automobiles. In late 2003, American firms began toV compete vigorously for lucrative reconstruction contracts, while others preparedI for increased business activity there in the coming years.7 C K events specific to Industries are often affected by legislation and other political their line of business. For example, the Highway Traffic Safety E Administration in the United States constantly tests cars and trucks sold in R the U.S. and works with 8 carmakers to improve safety performance. Following the sharp declines in air S travel in the United States in 2001, airlines on the verge of bankruptcy campaigned , and an additional $2.9 for and received $15 billion in government support in 2002 billion in 2003.9 All societies have laws and regulations that restrict or control T nations such as the business operations. Relatively speaking, free market oriented United States have fewer restrictions, but the level of regulation can be extensive E in some areas. Many socialist nations have rigid guidelines A for hiring and firing employees or establishing operations, and some require that a portion of what is R produced in that country be exported to earn foreign exchange. These regulations D to firms interested are specific to each nation and create opportunities or pose threats R in operating across national boundaries. A 3-2b Economic Forces Every organization is affected by changes in the local,1national, and/or global economies. The first economic consideration is that of the 1 gross domestic product (GDP), the value of a nation’s annual total production of goods 9 and services. GDP growth among nations is often interrelated, but all nations 1 do not experience the same rate of growth. For example, while GDP levels in the West were stagnant T during the late 1990s and early 2000s, China’s GDP grew at a staggering pace.10 gross domestic product the value of a nation’s annual total production of goods and services S Consistent GDP growth generally produces a healthy economy fueled by increases in consumer spending, whereas a decline signals lower consumer spending and decreased demand for goods and services. When GDP declines for two consecutive quarters, a nation’s economy is generally considered to be in a recession. A recession is not detrimental for all organizations. For example, college and university enrollments often increase as undergraduate and graduate students Organizational Theory 3-6 seek to gain an advantage in a tight job market.11 Unfortunately, it is difficult to forecast a recession in advance, and many recessions are identified only after they have occurred. High inflation negatively affects most, but not all businesses. High rates raise many of the costs of doing business, and continued inflation can constrict the expansion plans of businesses and trigger governmental action, such as is the case when the U.S. Federal Reserve Board raises its discount rate during inflationary periods to slow economic growth. However, oil companies may benefit during inflationary times if the prices of oil and gas rise faster than the costs of exploration, refinement, and transportation. Sharp increases in the price of heating oil sparked a resurgence in the market for coal stoves in the winter of 2000–2001.12 Interest rates affect the demand for many products and services, V especially “high ticket” items I whose costs are financed over C an extended period of time, such as homes, automobiles, K and appliances. At the consumer E level, low short-term interest R rates benefit retailers such as S Wal-Mart and J.C. Penney , because they also tend to lower rates on credit cards, thereby encouraging consumer T spending. At the organizational E level, high interest rates can A Recessions can be devastating for firms in many industries, but they are difficult to predict. hinder expansion efforts. R Organizations that transact a significant amount of business with entities outside of its borders are especially D vulnerable to changes in rates of exchange between the home and other currencies. When the value of the dollar R increases relative to other currencies, for example, American organizations are at a competitive disadvantage A rise in foreign markets. In addition, American internationally, as the prices of American-made goods manufacturers tend to locate more of their plants abroad and make purchases from foreign sources. During this time, American consumers are more likely to purchase1products produced abroad, which are less expensive than goods produced at home. 1 9 3-2c Social Forces 1 Social forces include such factors as societal values, T trends, traditions, and religious practices and can substantially influence organizational performance. Social S forces can vary widely among nations, especially as they are related to other factors. For example, smaller cars have been the vehicle of choice in European countries since the 1990s. In Europe, roads are more narrow, gasoline is more heavily taxed, and fuel economy is a greater concern. In the United States, roads are wider, gasoline is less expensive, and fuel consumption does not play as strong a role in the purchase decision. As a result, American consumers tend to demand relatively larger vehicles.13 Fashion in China also offers another example, where styles reflect a mix of Asian, American, and European tastes.14 Organizational Theory 3-7 Social forces often reflect societal practices that have lasted for decades or even centuries. For example, the celebration of Christmas in the Western Hemisphere provides significant financial opportunities for card companies, toy retailers, confectioners, tree growers, and gift shops. Some retailers are happy just to break even during the year and generate their profits during the Christmas shopping season. Societal trends also include demographic changes that can affect how organizations must function in order to succeed. Consider the United States as an example. The baby boom, which lasted from 1945 through the mid1960s, initially created opportunities for baby apparel and diaper manufacturers, private schools, and even candy and snack makers. Later, as this crop of baby boomers departed high school, universities grew at an astounding rate and organizations had large applicant pools from which to select their employees. More recently, these baby boomers have begun shopping at home more and are spending heavily on health-care needs, leisure activities, V and vacations.15 I Today, the average American is older, busier, better educated, more technologically astute, and less likely to be ...
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Nelnomap
School: Purdue University

here is the final revised paper

Running head: WALTON ARTS CENTER

1

Arts Center (Anita- President)
Name
Institution Affiliation
Date

WALTON ARTS CENTER

2
Walton Arts Center (Anita- President)

Walton arts center is a performing facility that was opened in 1992 in Fayetteville city
that has a population of 5300 individuals. At this time, Fayette was the largest and fast growing
city including the nearby countries like Belton and Washington. Mitchell is recognized
internationally and locally because of her effective and inspirational leadership to the
community. Surprisingly, other arts companies emulated Mitchells opening because he had vast
experience and his performances were well known Mitchell’s family required changes because
all children became adults and left their home place (Cascio, 2002). The situation brought
serious considerations due to the attractive challenge that was required to build another center.
The center of arts in Virginia suggested that Mitchell retirement would create challenges that are
related to CEO position and increase of remuneration. There was no way out because it was his
time to retire and decided due to the family’s situation it is recommendable to appoint Anita who
was the senior vice president. In my view, Mitchell decision was significant because Anita had a
good education background and various positions from various companies where she worked
before joining the Art organization in 1991. Also, Anita was loved even by the community and
people who knew her because she was quiet, personable, considerable, intelligent and
reasonable. From the case study, we can see that Anita credited Mitchell and liked working with
him. She had also gained some skills in art administration and performance.
The art center had experienced rapid growth from celebrating imagination that was
facilitated by Mitchell who was the director of Arts organization. Despite the growth, the
company has experienced limited organization evolution systems including revenue challenges.
The board of directors has decided to increase salaries from $ 75, 000 to $ 90, and 000 every
year. Therefore, the best way to counter the strategic planning retreat can be changing the

WALTON ARTS CENTER

3

management team. For instance, she can...

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