Management 478 - Joel Stevenson Exam #1 UPDATED ACTUAL Questions And
Correct Answers
Terms in this set (78)
Ch.1 Competitive Advantage Superior advantage relative to other competitors in the same industry or the
industry average.
Ch.1 Competitive Disadvantage Underperformance relative to other competitors in the same industry or the
industry average.
Ch.1 Corporate Social Responsibility (CSR) A framework that helps firms recognize and address the economic, legal, social,
and philanthropic expectations that society has of the business enterprise at a
given point in time.
Ch.1 Good Strategy Enables a firm to achieve superior performance and sustainable competitive
advantage relative to its competitors. It is the outcome of a strategic management
process that consists of three elements. 1. A diagnosis of the competitive
challenge; 2. A guiding policy to address the competitive advantage; and 3. A set
of coherent actions to implement a firm's guiding policy.
Ch.1 Red Queen Effect A situation in which everyone runs faster but there are no changes in relative
strategic positions.
Ch.1 Stakeholders Organizations, groups, and individuals that can affect or are affected by a firm's
actions .
Ch.1 Strategic Management An integrative management field that combines analysis, formulation, and
implementation in the quest for competitive advantage.
Ch.1 Strategy The set of goal-directed and integrated actions a firm takes to gain and sustain
superior performance relative to competitors.
Ch.1 Value Creation Occurs when companies with a good strategy are able to provide products or
services to consumers at a price point that they can afford while keeping their
costs in check, thus making a profit at the same time. Both parties benefit from this
trade as each captures a part of the value created.
Ch.1 Sustainable Competitive Advantage Outperforming competitors or the industry average over a prolonged period of
time.
Ch.1 Analysis, Formulation, Implementation, Strategy A model that links three interdependent strategic management tasks that
[(AFI) Strategy framework] together, help managers plan and implement a strategy that can improve
performance and result in a competitive advantage.
Ch.1 Competitive Parity Performance of two or more firms at the same level.
, Ch.2 Cognitive Limitations Constraints such as time or the brain's inability to process large amounts of data
that prevent us from appropriately processing and evaluating each piece of
information we encounter.
Ch.2 Groupthink A situation in which opinions coalesce around a leader without individuals
critically evaluating and challenging that leader's opinions and assumptions.
Ch.2 Intended Strategy The outcome of a rational and structured top-down strategic plan.
Ch.2 Mission Description of what an organization actually does. The products and services it
plans to provide, and the markets in which it will compete.
Ch.2 Realized Strategy Combination of intended and emergent strategy.
Ch.2 Serendipity Any random events, pleasant surprises, and accidental happenstances that can
have a profound impact on a firm's strategic initiatives.
Ch.2 Strategic Business Units (SBU's) Standalone divisions of a larger conglomerate, each with their own proft-and-loss
responsibility.
Ch.2 Strategic Management Process Method put in place by strategic leaders to formulate and implement a strategy,
which can lay the foundation for a sustainable competitive advantage.
Ch.2 Strategic Intent A stretch goal that pervades the entire organization with a sense of purpis.e
Ch.2 Vision A statement that captures an organization's purpose and aspiration. It spells out
what the organization ultimately wants to accomplish.
Ch.2 Strategy Formulation The part of the strategic management process that concerns the choice of
strategy in terms of where and how to compete.
Strategy Implementation The part of the strategic management process that concerns the organization,
coordination, and integration of how work gets done, or strategy execution.
Ch.3 Competitive Industry (Structure) Elements and features common to all industries, including the number and size of
competitors, the firms' degree of pricing power, the type of product or service
offered, and the height of entry barriers.
Ch.3 Entry Barriers Obstacles that discourage or prevent entry into an industry.
Ch.3 Exit Barriers The obstacles that interfere with a firm's ability to leave an industry.
Ch.3 Five Forces Model A framework that identifies five forces that determine the profit potential of an
industry and shape and firm's competitive strategy.
Ch.3 Industry Analysis A method to 1. Identify an industry's profit potential and 2. Derive implications for
a firm's strategic position within an industry.
Ch.3 Mobility Barriers Industry-specific factors that separate one strategic group from another.
Correct Answers
Terms in this set (78)
Ch.1 Competitive Advantage Superior advantage relative to other competitors in the same industry or the
industry average.
Ch.1 Competitive Disadvantage Underperformance relative to other competitors in the same industry or the
industry average.
Ch.1 Corporate Social Responsibility (CSR) A framework that helps firms recognize and address the economic, legal, social,
and philanthropic expectations that society has of the business enterprise at a
given point in time.
Ch.1 Good Strategy Enables a firm to achieve superior performance and sustainable competitive
advantage relative to its competitors. It is the outcome of a strategic management
process that consists of three elements. 1. A diagnosis of the competitive
challenge; 2. A guiding policy to address the competitive advantage; and 3. A set
of coherent actions to implement a firm's guiding policy.
Ch.1 Red Queen Effect A situation in which everyone runs faster but there are no changes in relative
strategic positions.
Ch.1 Stakeholders Organizations, groups, and individuals that can affect or are affected by a firm's
actions .
Ch.1 Strategic Management An integrative management field that combines analysis, formulation, and
implementation in the quest for competitive advantage.
Ch.1 Strategy The set of goal-directed and integrated actions a firm takes to gain and sustain
superior performance relative to competitors.
Ch.1 Value Creation Occurs when companies with a good strategy are able to provide products or
services to consumers at a price point that they can afford while keeping their
costs in check, thus making a profit at the same time. Both parties benefit from this
trade as each captures a part of the value created.
Ch.1 Sustainable Competitive Advantage Outperforming competitors or the industry average over a prolonged period of
time.
Ch.1 Analysis, Formulation, Implementation, Strategy A model that links three interdependent strategic management tasks that
[(AFI) Strategy framework] together, help managers plan and implement a strategy that can improve
performance and result in a competitive advantage.
Ch.1 Competitive Parity Performance of two or more firms at the same level.
, Ch.2 Cognitive Limitations Constraints such as time or the brain's inability to process large amounts of data
that prevent us from appropriately processing and evaluating each piece of
information we encounter.
Ch.2 Groupthink A situation in which opinions coalesce around a leader without individuals
critically evaluating and challenging that leader's opinions and assumptions.
Ch.2 Intended Strategy The outcome of a rational and structured top-down strategic plan.
Ch.2 Mission Description of what an organization actually does. The products and services it
plans to provide, and the markets in which it will compete.
Ch.2 Realized Strategy Combination of intended and emergent strategy.
Ch.2 Serendipity Any random events, pleasant surprises, and accidental happenstances that can
have a profound impact on a firm's strategic initiatives.
Ch.2 Strategic Business Units (SBU's) Standalone divisions of a larger conglomerate, each with their own proft-and-loss
responsibility.
Ch.2 Strategic Management Process Method put in place by strategic leaders to formulate and implement a strategy,
which can lay the foundation for a sustainable competitive advantage.
Ch.2 Strategic Intent A stretch goal that pervades the entire organization with a sense of purpis.e
Ch.2 Vision A statement that captures an organization's purpose and aspiration. It spells out
what the organization ultimately wants to accomplish.
Ch.2 Strategy Formulation The part of the strategic management process that concerns the choice of
strategy in terms of where and how to compete.
Strategy Implementation The part of the strategic management process that concerns the organization,
coordination, and integration of how work gets done, or strategy execution.
Ch.3 Competitive Industry (Structure) Elements and features common to all industries, including the number and size of
competitors, the firms' degree of pricing power, the type of product or service
offered, and the height of entry barriers.
Ch.3 Entry Barriers Obstacles that discourage or prevent entry into an industry.
Ch.3 Exit Barriers The obstacles that interfere with a firm's ability to leave an industry.
Ch.3 Five Forces Model A framework that identifies five forces that determine the profit potential of an
industry and shape and firm's competitive strategy.
Ch.3 Industry Analysis A method to 1. Identify an industry's profit potential and 2. Derive implications for
a firm's strategic position within an industry.
Ch.3 Mobility Barriers Industry-specific factors that separate one strategic group from another.
