Commerce 4PA3 - Ch 1-11 (2025-
2026) Test Exam with Correct,
Verified and Well Analyzed Answers
Graded A+
General Managers
someone who has responsibility for all functional facets of the
business
Challenges general managers face:
With a company's finite amount of
resources and limited organizational capabilities mixed in with an
ever changing external
environment it’s hard to keep up
Job of a general manager
Job is to create value for the enterprise
Three fundamental components of general manager's job
- Setting direction: vision, mission, & values
- Creating strategy
- Implementing change
- Must also assess both current and long-term performance
Assessment of organizational performance is based on:
1. Operating performance
2. Organizational health
Operating performance:
"harder" quantitative measure of financial and market performance
Typical measures of operating performance:
1. Profitability
2. Financial Position
3. Market Performance
Profitability:
Profit margins, key expense ratios, ROE, ROA, economic value
added
Financial position:
,leverage ratios (D/E, interest coverage), liquidity ratios,
activity ratios (asset and inventory turnover)
Market Performance:
(growth in sales, market share, new products as % of sales)
Organizational health:
"softer" qualitative measures
Typical measures of organizational health:
- Enthusiasm
- Boundaries
- Problem solving
- Learning
- Sustainability
Who made the "balance scorecard"
Robert Kaplan & David Norton
The Performance Matrix
This tool looks at organizational health:
Quadrant 2: Complacent Organization
Quadrant 1: Desired State
Quadrant 4: Crisis
Quadrant 5: Troubled Organization
what are the 3 reasons to develop a vision?
1. Resolve confusion over purpose of the business (why it exists)
2. Revitalize the business (new vision means it is time for change)
3. To enforce informal "sense of vision" for a company that is already
performing well
Setting Direction: Vision, Mission, Values
- All highly successful companies have set of core values & purpose
that remains fixed
even if business strategies evolve
- Apple redid theirs after a shift in business strategy (Apple
computers)
- Collins and Porras research
Values:
basic beliefs that govern individual and group behavior in an
organization
Core purpose:
defines the reason for being and may never be fully realized
Mission statement:
,- Clear and compelling goal that serves to unify an organization's
efforts
- Must stretch and challenge the organization yet still be achievable
Reasonable Expectations of a Vision Process
1. Settle some fundamental questions about the purpose of the
business
2. Prompt and reinforce the day-to-day actions consistent with their
meaning
3. Provide direction in formulation of more specific strategy of firm
Three questions to put to an emerging vision:
1. Does it showcase desirable and feasible destination?
2. Does it do so without jeopardizing management's flexibility to
maneuver as
circumstances change?
3. Does it stretch the organization?
Feasibility:
Whether you can reasonably expect to get to your visionary
destination
Flexibility:
Vision must be flexible because circumstances may change in
unanticipated
ways
Stretch:
Vision should go further than what is doable with today's resources
and
capabilities
Actual state now
(A) strategy developed
Strategic intent
(B)
Intended strategy
(A - B)
Unrealized strategy
(C)
- Strategy is successfully implemented
- C may still be better than A
Emergent strategy
(C - B) - try to get back to B
History of Strategy
, - Rooted in the military
- Originated in business with emergence of business schools
- First known as Business Policy
- Used as a capstone course to bring business functions together
- Had little growth
Questions 1 for Strategists: Why do firms continue to exist/evolve?
Transaction cost economics
Questions 2 for Strategists: How do we explain drift of performance
heterogeneity to homogeneity?
1. Organizational learning
2. Evolutionary theory
3. Agency theory
Organizational learning
change in behavior and cognition over time to reduce
delta between intent and realized
Evolutionary theory
- adaptation via organizational routines, efficiency, learning
curve o Institutional theory - similarity among competitors,
isomorphic, enact
environment
- Regulations changing an industry
Agency theory
principle / agent relationship, ownership vs. contractor,
commission
Why John Morris would want to raise stock price
- Reduced number of s/o which raised share price
- Company board of directors wanted to sell stock options
- Investors in the company are happy
- The board of directors were acting in the interests of themselves not
the company as a
whole
Deliberate vs. Emergent Strategies
Happy path: Strategy Developed-->Successful implementation--
>realized Strategic Intent
Implementation could be unsuccessful and need Emergent Strategy
to get back to
Realized Strategic Intent
The Essentials of the Strategy Model
2026) Test Exam with Correct,
Verified and Well Analyzed Answers
Graded A+
General Managers
someone who has responsibility for all functional facets of the
business
Challenges general managers face:
With a company's finite amount of
resources and limited organizational capabilities mixed in with an
ever changing external
environment it’s hard to keep up
Job of a general manager
Job is to create value for the enterprise
Three fundamental components of general manager's job
- Setting direction: vision, mission, & values
- Creating strategy
- Implementing change
- Must also assess both current and long-term performance
Assessment of organizational performance is based on:
1. Operating performance
2. Organizational health
Operating performance:
"harder" quantitative measure of financial and market performance
Typical measures of operating performance:
1. Profitability
2. Financial Position
3. Market Performance
Profitability:
Profit margins, key expense ratios, ROE, ROA, economic value
added
Financial position:
,leverage ratios (D/E, interest coverage), liquidity ratios,
activity ratios (asset and inventory turnover)
Market Performance:
(growth in sales, market share, new products as % of sales)
Organizational health:
"softer" qualitative measures
Typical measures of organizational health:
- Enthusiasm
- Boundaries
- Problem solving
- Learning
- Sustainability
Who made the "balance scorecard"
Robert Kaplan & David Norton
The Performance Matrix
This tool looks at organizational health:
Quadrant 2: Complacent Organization
Quadrant 1: Desired State
Quadrant 4: Crisis
Quadrant 5: Troubled Organization
what are the 3 reasons to develop a vision?
1. Resolve confusion over purpose of the business (why it exists)
2. Revitalize the business (new vision means it is time for change)
3. To enforce informal "sense of vision" for a company that is already
performing well
Setting Direction: Vision, Mission, Values
- All highly successful companies have set of core values & purpose
that remains fixed
even if business strategies evolve
- Apple redid theirs after a shift in business strategy (Apple
computers)
- Collins and Porras research
Values:
basic beliefs that govern individual and group behavior in an
organization
Core purpose:
defines the reason for being and may never be fully realized
Mission statement:
,- Clear and compelling goal that serves to unify an organization's
efforts
- Must stretch and challenge the organization yet still be achievable
Reasonable Expectations of a Vision Process
1. Settle some fundamental questions about the purpose of the
business
2. Prompt and reinforce the day-to-day actions consistent with their
meaning
3. Provide direction in formulation of more specific strategy of firm
Three questions to put to an emerging vision:
1. Does it showcase desirable and feasible destination?
2. Does it do so without jeopardizing management's flexibility to
maneuver as
circumstances change?
3. Does it stretch the organization?
Feasibility:
Whether you can reasonably expect to get to your visionary
destination
Flexibility:
Vision must be flexible because circumstances may change in
unanticipated
ways
Stretch:
Vision should go further than what is doable with today's resources
and
capabilities
Actual state now
(A) strategy developed
Strategic intent
(B)
Intended strategy
(A - B)
Unrealized strategy
(C)
- Strategy is successfully implemented
- C may still be better than A
Emergent strategy
(C - B) - try to get back to B
History of Strategy
, - Rooted in the military
- Originated in business with emergence of business schools
- First known as Business Policy
- Used as a capstone course to bring business functions together
- Had little growth
Questions 1 for Strategists: Why do firms continue to exist/evolve?
Transaction cost economics
Questions 2 for Strategists: How do we explain drift of performance
heterogeneity to homogeneity?
1. Organizational learning
2. Evolutionary theory
3. Agency theory
Organizational learning
change in behavior and cognition over time to reduce
delta between intent and realized
Evolutionary theory
- adaptation via organizational routines, efficiency, learning
curve o Institutional theory - similarity among competitors,
isomorphic, enact
environment
- Regulations changing an industry
Agency theory
principle / agent relationship, ownership vs. contractor,
commission
Why John Morris would want to raise stock price
- Reduced number of s/o which raised share price
- Company board of directors wanted to sell stock options
- Investors in the company are happy
- The board of directors were acting in the interests of themselves not
the company as a
whole
Deliberate vs. Emergent Strategies
Happy path: Strategy Developed-->Successful implementation--
>realized Strategic Intent
Implementation could be unsuccessful and need Emergent Strategy
to get back to
Realized Strategic Intent
The Essentials of the Strategy Model
