MAN 4720 FINAL QUESTIONS AND
ANSWERS 100% ACCURATE
What are the results of strategy? - ANSWER-The development of competitive
advantage that can be refined, and sustained so that the company will achieve superior
performance over time. Superior performance refers to outcomes that exceed the
average for the industry in which the company competes; those firms whose
performance is average or below average are less attractive.
Opportunity Recognition - ANSWER-Identifying and exploiting where the market is
heading
Value Creation - ANSWER-Understanding and delivering new values appreciated by
both existing and new customers and other stakeholders
What are the steps of the strategic management process? - ANSWER-Analysis,
formulation, implementation, evaluation
Analysis - ANSWER-Careful "external analysis" of an industry and "internal analysis" of
a company's strengths, resources and ways of creating value
Formulation - ANSWER-Articulating vision, mission, goals, and a type of strategic
approach to adopt
Implementation - ANSWER-Putting strategy into effect by allocating resources,
structuring the organization, and motivating employees
Evaluation - ANSWER-Ensuring strategy-consistent actions across departments, and
establishing performance metrics to ensure that progress is being made toward long
term goals.
What are metrics and what are they used for? - ANSWER-Qualitative and quantitative
measures that allow the firm to measure the effectiveness of its business strategy
Frederick Taylor - ANSWER-Father of the "science of work" time and motion studies
that helped identify more efficient processes and ideas about structure and hierarchy.
Michael Porter - ANSWER-Leading proponent of the move from long-range planning to
strategy. His two early books on the subject, Competitive Strategy and Competitive
Advantage, described competitive strategy as "positioning a business to maximize the
value of the capabilities that distinguish it from its competitors."
,Long-Range Planning - ANSWER-A traditional approach to planning used before 1980
that often extrapolated into the future what the company had done well in the past.
What are the forms of value creation? - ANSWER-Economic, cultural, social,
knowledge-based
What is the critical outcome measure of strategy? - ANSWER-Performance (both
quantitative and qualitative) is the key outcome of interest for those studying and
managing strategy.
What should be reflected in performance measures related to an organization's
strategy? - ANSWER-1) Summary measures that reflect the impact of integrated efforts
across the entire company
2) Summary measures that can be compared to competitors
3) Measures that account for longer periods of time
Whose interests should be taken into account when assessing company performance? -
ANSWER-Stockholders and stakeholders
What are stakeholders? - ANSWER-Individuals or groups who have an interest in or an
influence on the business and operations of a company. Many corporations today
create value for other stakeholders, and thus embrace the idea of triple bottom line
performance measurement.
Internal Stakeholders - ANSWER-Employees, managers/officers, board of directors,
stockholders
External Stakeholders - ANSWER-Suppliers, governments, customers, unions,
communities
Normal Profit - ANSWER-The minimum return earned by a company that is necessary
to attract and secure the owner's inputs. Generally defined as the cost of equity capital
multiplied by the amount of shareholder equity.
Economic Profit - ANSWER-The residual income above and beyond normal profit that
accrues to owners, deriving from the prowess of management in planning, supervision,
and control.
What are the components of return on equity (ROE)? - ANSWER-Comprised of three
ratios:
1) Profitability
2) Asset productivity
3) Financial Leverage
What are common-sized financial statements? - ANSWER-A method of financial
analysis that facilitates comparisons between different size companies.
, What are the results of a strategically focused organization? - ANSWER-1) Provides
Direction and Purpose: Establishing a vision for a company provides every employee,
supplier, and customer with a view to the long term direction the company wishes to
take.
2) Defines Immediate Approach: Establishing a mission statement provides
fundamental guidance for how employees should act in the present toward more
immediate goals.
3) Complements Strategy: Strategy plans are often developed and usually endorsed by
senior management, far removed from employees at lower levels. Vision and mission
statements help overcome the coordination problem that exists in large, complex
organizations.
How are differences in performance among firms explained? - ANSWER-Internal
analysis can improve our understanding of why there are performance differences
between companies in an industry. By examining carefully what a company does, what
it fails to do, and how it operates, one can better identify the sources of
strengths/weaknesses that enable it to occupy a leading (or lagging) position in an
industry.
What is a SWOT analysis? - ANSWER-Tends to provide a perceptual snapshot of a
company at a point in time.
What is a Value Chain Analysis? - ANSWER-Is a more dynamic view because it
exposes behavioral causes and effects, and draws our attention to the critical concepts
of value creation and value capture. Concentrates on activities conducted within a
company.
What are the potential drawbacks of SWOT analysis? - ANSWER-Often results in a
long list of items, too many to effectively manage. Can over-simplify complex business
processes. Possible confusion between strengths/weaknesses. May prompt companies
to build on strengths that are less relevant to changing markets. Provides a static view
without insight into the sources of strengths/weaknesses.
What is a vision statement? - ANSWER-More compelling and overarching than the
mission statement, an image of the organization in the future that motivates employees
to focus their actions toward a common point.
What is a mission statement? - ANSWER-A brief statement that summarizes how and
where the firm will compete in the present.
What are methods for sharing vision and mission statements with the employees of an
organization? - ANSWER-1) Creating Narratives: Telling stories makes it memorable
ANSWERS 100% ACCURATE
What are the results of strategy? - ANSWER-The development of competitive
advantage that can be refined, and sustained so that the company will achieve superior
performance over time. Superior performance refers to outcomes that exceed the
average for the industry in which the company competes; those firms whose
performance is average or below average are less attractive.
Opportunity Recognition - ANSWER-Identifying and exploiting where the market is
heading
Value Creation - ANSWER-Understanding and delivering new values appreciated by
both existing and new customers and other stakeholders
What are the steps of the strategic management process? - ANSWER-Analysis,
formulation, implementation, evaluation
Analysis - ANSWER-Careful "external analysis" of an industry and "internal analysis" of
a company's strengths, resources and ways of creating value
Formulation - ANSWER-Articulating vision, mission, goals, and a type of strategic
approach to adopt
Implementation - ANSWER-Putting strategy into effect by allocating resources,
structuring the organization, and motivating employees
Evaluation - ANSWER-Ensuring strategy-consistent actions across departments, and
establishing performance metrics to ensure that progress is being made toward long
term goals.
What are metrics and what are they used for? - ANSWER-Qualitative and quantitative
measures that allow the firm to measure the effectiveness of its business strategy
Frederick Taylor - ANSWER-Father of the "science of work" time and motion studies
that helped identify more efficient processes and ideas about structure and hierarchy.
Michael Porter - ANSWER-Leading proponent of the move from long-range planning to
strategy. His two early books on the subject, Competitive Strategy and Competitive
Advantage, described competitive strategy as "positioning a business to maximize the
value of the capabilities that distinguish it from its competitors."
,Long-Range Planning - ANSWER-A traditional approach to planning used before 1980
that often extrapolated into the future what the company had done well in the past.
What are the forms of value creation? - ANSWER-Economic, cultural, social,
knowledge-based
What is the critical outcome measure of strategy? - ANSWER-Performance (both
quantitative and qualitative) is the key outcome of interest for those studying and
managing strategy.
What should be reflected in performance measures related to an organization's
strategy? - ANSWER-1) Summary measures that reflect the impact of integrated efforts
across the entire company
2) Summary measures that can be compared to competitors
3) Measures that account for longer periods of time
Whose interests should be taken into account when assessing company performance? -
ANSWER-Stockholders and stakeholders
What are stakeholders? - ANSWER-Individuals or groups who have an interest in or an
influence on the business and operations of a company. Many corporations today
create value for other stakeholders, and thus embrace the idea of triple bottom line
performance measurement.
Internal Stakeholders - ANSWER-Employees, managers/officers, board of directors,
stockholders
External Stakeholders - ANSWER-Suppliers, governments, customers, unions,
communities
Normal Profit - ANSWER-The minimum return earned by a company that is necessary
to attract and secure the owner's inputs. Generally defined as the cost of equity capital
multiplied by the amount of shareholder equity.
Economic Profit - ANSWER-The residual income above and beyond normal profit that
accrues to owners, deriving from the prowess of management in planning, supervision,
and control.
What are the components of return on equity (ROE)? - ANSWER-Comprised of three
ratios:
1) Profitability
2) Asset productivity
3) Financial Leverage
What are common-sized financial statements? - ANSWER-A method of financial
analysis that facilitates comparisons between different size companies.
, What are the results of a strategically focused organization? - ANSWER-1) Provides
Direction and Purpose: Establishing a vision for a company provides every employee,
supplier, and customer with a view to the long term direction the company wishes to
take.
2) Defines Immediate Approach: Establishing a mission statement provides
fundamental guidance for how employees should act in the present toward more
immediate goals.
3) Complements Strategy: Strategy plans are often developed and usually endorsed by
senior management, far removed from employees at lower levels. Vision and mission
statements help overcome the coordination problem that exists in large, complex
organizations.
How are differences in performance among firms explained? - ANSWER-Internal
analysis can improve our understanding of why there are performance differences
between companies in an industry. By examining carefully what a company does, what
it fails to do, and how it operates, one can better identify the sources of
strengths/weaknesses that enable it to occupy a leading (or lagging) position in an
industry.
What is a SWOT analysis? - ANSWER-Tends to provide a perceptual snapshot of a
company at a point in time.
What is a Value Chain Analysis? - ANSWER-Is a more dynamic view because it
exposes behavioral causes and effects, and draws our attention to the critical concepts
of value creation and value capture. Concentrates on activities conducted within a
company.
What are the potential drawbacks of SWOT analysis? - ANSWER-Often results in a
long list of items, too many to effectively manage. Can over-simplify complex business
processes. Possible confusion between strengths/weaknesses. May prompt companies
to build on strengths that are less relevant to changing markets. Provides a static view
without insight into the sources of strengths/weaknesses.
What is a vision statement? - ANSWER-More compelling and overarching than the
mission statement, an image of the organization in the future that motivates employees
to focus their actions toward a common point.
What is a mission statement? - ANSWER-A brief statement that summarizes how and
where the firm will compete in the present.
What are methods for sharing vision and mission statements with the employees of an
organization? - ANSWER-1) Creating Narratives: Telling stories makes it memorable
