BUSA 4980 Midterm 2 Questions and
All Complete Verified Solutions 2026
Updated.
How the O" in the VRIO Framework relates to firm performance - Answer All the resources,
capabilities, and great strategic plans in the world are useless unless the company is "o"rganized
to take advantage of it; Companies must have an effective organizational, culture, structure and
coordinating systems.
Essential elements of an effective organized firm:
* Strong leadership with a clear mission and vision (what)
* Well resourced & skilled (who)
* Strong distinct capabilities (how)
* Team Chemistry (culture)
* An alignment of Mission, Culture, and Strategy
Key Leadership Actions that Contribute to Effective Strategic Leadership - Answer 1.
Managing an entire organization rather than a functional subunit
2. Lead the company's strategy (Arenas, Vehicles and Differentiators)
3. Communicating the vision in an inspiring and compelling manners
4. Building and sustaining an effective organizational culture and value systems
5. Address and balance the needs of diverse set of stakeholders
6. Attract and manage human capital and resources
7. Practices ethical behavior and actions
8. Manage the massive information flow
Financial Capital - Answer * Capital Structure, Equity & Debt
* Asset Investment Decisions
Examples of Asset Investment Decisions:
- Dividends
- Stock buybacks
,* Resource to maximize — not as a cost to minimize
Organizational Capital - Answer * Culture, Values, Norms
* Routines, business practices, and tacit knowledge
* Capabilities
* Reputation
Social Capital - Answer * Relationships & networks inside and outside the firm
* Internal SC promotes cooperation and coordination within the firm's units
* External SC promotes developing relationships with external stakeholders (i.e., suppliers,
customers, communities)
Levers of influence to impact firm effectiveness - Answer Culture & Controls
Culture - Answer Shared traditions, expectations, values, and norms that influence how
people work together
* Culture should support the firm's strategy
Controls - Answer Mechanisms put in place to create structure, motivate employees
Leader's influence control over strategy implementation through the following:
* Org structure (hierarchy and information flow)
* Policies (approvals, limits, decision making rules)
* Training / Compliance
* Incentives (pay and recognition)
* Performance measurement systems
Upper Echelon's Theory - Answer The top management team's characteristics, a firm's
strategies, and the firm's performance are interrelated
Leadership Traits, Values & Experiences influence => Leadership Decisions and Actions =>
Organizational outcomes
, Personality traits
International experiences
Career experiences
* Leadership team heterogeneity (i.e. diversity) has been found to be positively correlated to
organizational success.
Sources of Managerial Succession - Answer Internal labor markets and external labor
markets
Internal Labor Markets - Answer Firm's opportunities for managerial positions and the
qualified employees within.
Internal Hiring Advantages - Answer * Continued commitment to the existing vision, culture,
and strategies
* Shorter learning curve - familiar with products, markets, tech
* Morale of workforce
Internal Hiring Disadvantages - Answer * Lack of new perspectives / Innovation
* Internal candidates not chosen may feel slighted
External Labor Markets - Answer Selecting qualified people external to the organization for
managerial opportunities
External Hiring Advantages - Answer * More innovation, Company needs to enhance its
ability to innovate
* Company needs to reverse its recent poor performance
Industry in which the firm competes is experiencing rapid growth
External Hiring Disadvantages - Answer * Learning curve increases
* Morale could be lower
* Workforce resistance to change
All Complete Verified Solutions 2026
Updated.
How the O" in the VRIO Framework relates to firm performance - Answer All the resources,
capabilities, and great strategic plans in the world are useless unless the company is "o"rganized
to take advantage of it; Companies must have an effective organizational, culture, structure and
coordinating systems.
Essential elements of an effective organized firm:
* Strong leadership with a clear mission and vision (what)
* Well resourced & skilled (who)
* Strong distinct capabilities (how)
* Team Chemistry (culture)
* An alignment of Mission, Culture, and Strategy
Key Leadership Actions that Contribute to Effective Strategic Leadership - Answer 1.
Managing an entire organization rather than a functional subunit
2. Lead the company's strategy (Arenas, Vehicles and Differentiators)
3. Communicating the vision in an inspiring and compelling manners
4. Building and sustaining an effective organizational culture and value systems
5. Address and balance the needs of diverse set of stakeholders
6. Attract and manage human capital and resources
7. Practices ethical behavior and actions
8. Manage the massive information flow
Financial Capital - Answer * Capital Structure, Equity & Debt
* Asset Investment Decisions
Examples of Asset Investment Decisions:
- Dividends
- Stock buybacks
,* Resource to maximize — not as a cost to minimize
Organizational Capital - Answer * Culture, Values, Norms
* Routines, business practices, and tacit knowledge
* Capabilities
* Reputation
Social Capital - Answer * Relationships & networks inside and outside the firm
* Internal SC promotes cooperation and coordination within the firm's units
* External SC promotes developing relationships with external stakeholders (i.e., suppliers,
customers, communities)
Levers of influence to impact firm effectiveness - Answer Culture & Controls
Culture - Answer Shared traditions, expectations, values, and norms that influence how
people work together
* Culture should support the firm's strategy
Controls - Answer Mechanisms put in place to create structure, motivate employees
Leader's influence control over strategy implementation through the following:
* Org structure (hierarchy and information flow)
* Policies (approvals, limits, decision making rules)
* Training / Compliance
* Incentives (pay and recognition)
* Performance measurement systems
Upper Echelon's Theory - Answer The top management team's characteristics, a firm's
strategies, and the firm's performance are interrelated
Leadership Traits, Values & Experiences influence => Leadership Decisions and Actions =>
Organizational outcomes
, Personality traits
International experiences
Career experiences
* Leadership team heterogeneity (i.e. diversity) has been found to be positively correlated to
organizational success.
Sources of Managerial Succession - Answer Internal labor markets and external labor
markets
Internal Labor Markets - Answer Firm's opportunities for managerial positions and the
qualified employees within.
Internal Hiring Advantages - Answer * Continued commitment to the existing vision, culture,
and strategies
* Shorter learning curve - familiar with products, markets, tech
* Morale of workforce
Internal Hiring Disadvantages - Answer * Lack of new perspectives / Innovation
* Internal candidates not chosen may feel slighted
External Labor Markets - Answer Selecting qualified people external to the organization for
managerial opportunities
External Hiring Advantages - Answer * More innovation, Company needs to enhance its
ability to innovate
* Company needs to reverse its recent poor performance
Industry in which the firm competes is experiencing rapid growth
External Hiring Disadvantages - Answer * Learning curve increases
* Morale could be lower
* Workforce resistance to change
