MGMT 101 Midterm Exam with
Accurate Solutions
3 inputs in strategy (congruence model) - ANS-Environment, resources, history
3 outputs in strategy (congruence model) - ANS-Organization, group, individual
4 parts of the transformation process (congruence model) - ANS-People, work, structure
(formal), culture (informal)
Congruence - ANS-Degree to which the needs, demands, goals, objectives, and/or
structures of one component are consistent with those of another
Congruence hypothesis (Nadler & Tushman) -- process of management - ANS-The
greater the congruence (fit) between components, the more effective the organization
will be.
Input -> Strategy Formulation -> Strategy Implementation -> Output
Fit or misfit in a firm's strategy can exist between... - ANS-Between the organization's
strategy and its environment ("external fit")
Between the organization's strategy and the elements of its transformation process
("internal fit")
e.g. Southwest Airlines' competitive advantage comes from the way its activities fit and
reinforce one another
Management - ANS-Management is the practice of formulating strategies and guiding
the implementation of those strategies in an organization
Weber's 6 definitions of an ideal bureaucracy - ANS-• Hierarchy of authority
• Specialized division of labor
• Written rules of conduct
• Promotion based on achievement
• Impersonality
• Efficiency
*describes a closed system
System - ANS-Set of interrelated elements (a change in one element affects the others)
, 3 characteristics of an open system - ANS-- Interacts with its environment
- Draws inputs from external sources
- Transforms inputs into some form of outputs
Strategy (management) - ANS-Decisions about how the org will allocate its resources
against the demands, constraints, and opportunities of its environment within the
context of its history
*Strategy is the linchpin between environment and the organization (strategy must fit
environment - external and organization must fit strategy - internal)
SWOT - ANS-SW: resources, history (internal)
OT: environment (external)
7 factors of the general environment - ANS-- Physical, demographic, sociocultural,
political/legal, technological, economic, global
- Firms have very little control over this (hard to predict)
- Factors can shape and alter industry forces
Scenario planning - ANS-Development of flexible strategies to deal with different
changes in the env't (e.g. Shell Energy Scenarios to 2050)
Rank the variation in performance across industries (pharma, computers, airlines) -
ANS-Highest to lowest equity
- Pharma, computers, airlines (airlines are much more volatile)
How much variance in firm performance is explained by the industry? - ANS-15-20%
Industry - ANS-a group of firms that produce similar products or provide similar
services, sell to similar customers, and use similar methods of production
2 uses for Porter's 5 Forces - ANS-Evaluate the competitive pressures of an industry
and assess its overall attractiveness
Unrelated diversification - ANS-Synergies arise from sharing secondary support
activities (e.g. information systems, human resource practices) -- GE and its HRM,
Berkshire Hathaway
Diversification discount - ANS-Share price goes down for unrelated diversification
2 types of related diversification - ANS-Horizontal
Accurate Solutions
3 inputs in strategy (congruence model) - ANS-Environment, resources, history
3 outputs in strategy (congruence model) - ANS-Organization, group, individual
4 parts of the transformation process (congruence model) - ANS-People, work, structure
(formal), culture (informal)
Congruence - ANS-Degree to which the needs, demands, goals, objectives, and/or
structures of one component are consistent with those of another
Congruence hypothesis (Nadler & Tushman) -- process of management - ANS-The
greater the congruence (fit) between components, the more effective the organization
will be.
Input -> Strategy Formulation -> Strategy Implementation -> Output
Fit or misfit in a firm's strategy can exist between... - ANS-Between the organization's
strategy and its environment ("external fit")
Between the organization's strategy and the elements of its transformation process
("internal fit")
e.g. Southwest Airlines' competitive advantage comes from the way its activities fit and
reinforce one another
Management - ANS-Management is the practice of formulating strategies and guiding
the implementation of those strategies in an organization
Weber's 6 definitions of an ideal bureaucracy - ANS-• Hierarchy of authority
• Specialized division of labor
• Written rules of conduct
• Promotion based on achievement
• Impersonality
• Efficiency
*describes a closed system
System - ANS-Set of interrelated elements (a change in one element affects the others)
, 3 characteristics of an open system - ANS-- Interacts with its environment
- Draws inputs from external sources
- Transforms inputs into some form of outputs
Strategy (management) - ANS-Decisions about how the org will allocate its resources
against the demands, constraints, and opportunities of its environment within the
context of its history
*Strategy is the linchpin between environment and the organization (strategy must fit
environment - external and organization must fit strategy - internal)
SWOT - ANS-SW: resources, history (internal)
OT: environment (external)
7 factors of the general environment - ANS-- Physical, demographic, sociocultural,
political/legal, technological, economic, global
- Firms have very little control over this (hard to predict)
- Factors can shape and alter industry forces
Scenario planning - ANS-Development of flexible strategies to deal with different
changes in the env't (e.g. Shell Energy Scenarios to 2050)
Rank the variation in performance across industries (pharma, computers, airlines) -
ANS-Highest to lowest equity
- Pharma, computers, airlines (airlines are much more volatile)
How much variance in firm performance is explained by the industry? - ANS-15-20%
Industry - ANS-a group of firms that produce similar products or provide similar
services, sell to similar customers, and use similar methods of production
2 uses for Porter's 5 Forces - ANS-Evaluate the competitive pressures of an industry
and assess its overall attractiveness
Unrelated diversification - ANS-Synergies arise from sharing secondary support
activities (e.g. information systems, human resource practices) -- GE and its HRM,
Berkshire Hathaway
Diversification discount - ANS-Share price goes down for unrelated diversification
2 types of related diversification - ANS-Horizontal
