MGMT 5560 TEST 1 UGA QUESTIONS WITH CORRECT ANSWERS LATEST UPDATE 2026

MGMT 5560 TEST 1 UGA QUESTIONS WITH CORRECT ANSWERS LATEST UPDATE 2026 strategy - Answers the set of goal-directed actions a firm takes to gain and sustain superior performance relative to competitors Strategic Management - Answers the initiatives (strategies) taken by executives on behalf of owners involving utilization of resources to enhance performance of firms in their external environment Multinational Enterprise (MNE) - Answers a (for profit) firm that deploys resources and capabilities in the procurement, production, and distribution of goods and services in at least two countries (sustainable) competitive advantage - Answers when a firm is able to outperform its competitors or the industry average over a prolonged period stakeholders - Answers the organizations, groups, and individuals that can affect or are affected by a firm's actions. Effective stakeholder management can benefit firm performance 1. Analysis - Answers diagnosing the competitive challenge. strategic leadership: managing the strategy process, external analysis, internal analysis, competitive advantage 2. formulation - Answers formulating the processes to address the competitive advantage. Business strategy: differentiation, cost leadership, innovation, entrepreneurship. corporate strategy: vertical integration and diversification. Global strategy: competing around the world 3. Implementation - Answers Executing actions that implement the formulated processes. Organizational design: structure, culture, control. Corporate Governance and business ethics Why is strategic management important? - Answers stakeholder management increases firm performance strategic leadership - Answers executives' use of power and influence to direct the activities of others when pursuing organizational goals vision - Answers a statement about what an organization ultimately wants to accomplish; it captures the company's aspiration mission - Answers a description of what an organization actually does- the products and services it plans to provide, and the markets in which it will compete. Describes how it will accomplish the vision values - Answers a statement of principles to guide an organization as it works to achieve its vision and fulfill its mission; often includes explicit ethical considerations. An organization's _________ states the standards by which it will operate. CEO - Answers responsible for direction and entire operations of the company. They account for about 22% of variance in firm performance. Often referred as "CEO in-context effect." upper-echelons theory - Answers CEO's characteristics and traits influence firm performance bounded rationality - Answers CEO's rationality is confined by cognitive limitations and the time available to make these decisions leadership structures - Answers Corporate: Headquarters, "global CEO and where to compete"; Business unit: SBU 1-3, "local CEO and how to compete"; functional unit: Business function 1-4, "local functional heads and How to implement business strategy" Illusion of control - Answers a person's cognition has a tendency to overestimate their ability to control events. Attribution theory: suggests that CEOs/executives tend to attribute their success to their own abilities, and attribute negative events or poor performance to external stimuli escalating commitment - Answers when an individual or group faces increasingly negative feedback regarding the likely outcome from a decision, but nevertheless continues to invest resources and time in that decision often exceeding the earlier commitments. "just one more effect" "gambling" confirmation bias - Answers people tend to search for and interpret information in a way that supports their prior beliefs reason by analogy - Answers when people use simple analogies to make sense out of complex problems representativeness - Answers people make conclusions based on small samples, or even from one memorable case or anecdote groupthink - Answers when opinions coalesce around a leader without individuals critically evaluating and challenging that leader's opinions and assumptions How do you work around biases? - Answers devils advocacy(team 2 finds holes in team 1 plans) and dialectic inquiry(2 teams concurrently form plans) strategic management process - Answers method put in place by strategic leaders to formulate and implement a strategy, which can lay the foundation for a sustainable competitive advantage Strategic Planning - Answers A formal, top-down planning approach. all strategic intelligence and decision making responsibilities concentrate on the CEO and top management. Very linear plan scenario planning - Answers A formal, top-down planning approach. Adds a layer to strategic planning by creating several contingencies that anticipate potential futures Strategy as Planned Emergence - Answers an informal, plan- driven approach. There is intended strategy, but it may be influenced by unpredictable events, it relies on experience and insights. Managers develop an emergent strategy to respond to the situation. A firm's realized strategy (what we as observers see) is a function of intended strategy pros of strategic planning - Answers Clear process and lines of communication, creates opportunities for coordination and control of various business units/ advantage, propels stable firms cons of strategic planning - Answers rigid and inflexible, little input from lower level employees, TMT role (analysis and formulation) is removed from line employees' role(implementation) pros of scenario planning - Answers clear process and lines of communication, creates opportunities for coordination and control of various business units/activities, easily understood, and provides some flexibility cons of scenario planning - Answers cannot possibly create responses to all events, little input from lower employees, TMT role is removed from line employees' role, and leaders are less likely to plan for negative events Pros of Strategy as Planned Emergence - Answers holistically integrates components of the AFI framework, acknowledges unrealized strategies, includes input from both TMT and line employees, significant flexibility Cons of Strategy as Planned Emergence - Answers unclear, nonlinear process that can lead to miscommunication or lack or focus, not all ideas are good, leaders are leaders for a reason, and unclear evaluation criteria for strategies that emerge industry - Answers a group of incumbent companies that 1. maintain relatively the same set of suppliers and buyers and 2. tend to offer similar products and services strategic group - Answers a set of companies that pursue a similar strategy within a specific industry components of PESTEL - Answers political: the process and actions of government bodies that can influence the decisions and behavior of firm; economic: macro economic factors affecting firms; sociocultural: societies' cultures, norms, and values; technological: new applications that can influence extant processes and products; ecological: relating to natural environment ; legal: the official outcomes of political processes (new regulation) Porter's Five Forces - Answers threat of entry, threat of substitute, supplier power, buyer power, and competitive rivalry