MGMT 4900 EXAM 1 QUESTIONS & ANSWERS
What is the industrial organization (I/O) model? - Answer --Above average returns are
determined largely by EXTERNAL characteristics
What are the industrial organization models assumptions, focus, and arguments about
firms' earning above-average returns? - Answer --Focus on industry structure
-Assume that firms are homogenous
What is the resource-based model? - Answer --Above average returns are determined
largely by INTERNAL characteristics
What are the resource models assumptions, focus, and arguments about firms' earning
above-average returns? - Answer --Assume that firms are heterogeneous
-Focus on firm resources, capabilities, and competencies
What is an organizational vision? - Answer --picture of what the firm wants to be and
what it wants to ultimately achieve
--Stretches and challenges people
--Evokes emotions and dreams
-Internally focused
Example: "To be the leader in the global document market."----Xerox
What is an organizational mission? - Answer --Specifies the business or businesses in
which the firm intends to compete and the customers it intends to serve
-Establish a firm' individuality, inspiring and relevant to all stakeholders
-Externally focused
Example: "Connecting, informing and entertaining people
everywhere in innovative ways that will enrich their lives." ----Time Warner
What is the difference between organizational mission and vision? - Answer -
Organization mission is what a company wants to complete or who they serve and an
organization vision is who the firm wants to believe and achieve. A vision is internally
focused and mission is externally focused.
How do organizational missions and visions create value for the firm? - Answer -Both
can provide value for the firm by giving them goals to aim for, and value for
stakeholders so that they can target them
, Who are an organization's stakeholders? - Answer -Individuals and groups who can
affect, and are affected by, the strategic outcomes achieved and have enforceable
claims on a firm's performance
How do different groups of stakeholders hold different interests? - Answer -Capital
market stakeholders: Shareholders
Product market stakeholders:Customers, suppliers
Organizational Stakeholders: employees
Why is it important to study and understand the external environment of the firm? -
Answer -To identify opportunities and threats:
-Opportunity: A condition in the environment that if exploited, helps a company achieve
strategic competitiveness
-Threat: A condition in the environment that may hinder a company's efforts to achieve
strategic competitiveness
Identify and describe the six segments of the general environment of the firm. - Answer
-1. Demographic
---Population size, Age structure, Geographic distribution, Ethnic mix, Income
distribution
2. Economic
---Inflation rates, Interest rates, Trade deficits or surpluses, Budget deficits or surpluses,
Personal savings rate, Business savings rates, Gross domestic product
3. Socio-cultural
--- Women in the workplace, Workforce diversity, Attitudes about quality of work life,
Concerns about environment, Shifts in work and career preferences, Shifts in product
and service preferences
4. Global
--- Significant international events, Emerging and changing global markets, Global
outsourcing, Access to resources on a global basis
5. Technological
--- Produce innovations, application of knowledge, focus of private and gov supported
R&D expenditures, new communication technologies
6. Political/legal
--- Antitrust laws, taxation laws, deregulation philosophies, labor training laws,
educational philosophies and policies
What is the industrial organization (I/O) model? - Answer --Above average returns are
determined largely by EXTERNAL characteristics
What are the industrial organization models assumptions, focus, and arguments about
firms' earning above-average returns? - Answer --Focus on industry structure
-Assume that firms are homogenous
What is the resource-based model? - Answer --Above average returns are determined
largely by INTERNAL characteristics
What are the resource models assumptions, focus, and arguments about firms' earning
above-average returns? - Answer --Assume that firms are heterogeneous
-Focus on firm resources, capabilities, and competencies
What is an organizational vision? - Answer --picture of what the firm wants to be and
what it wants to ultimately achieve
--Stretches and challenges people
--Evokes emotions and dreams
-Internally focused
Example: "To be the leader in the global document market."----Xerox
What is an organizational mission? - Answer --Specifies the business or businesses in
which the firm intends to compete and the customers it intends to serve
-Establish a firm' individuality, inspiring and relevant to all stakeholders
-Externally focused
Example: "Connecting, informing and entertaining people
everywhere in innovative ways that will enrich their lives." ----Time Warner
What is the difference between organizational mission and vision? - Answer -
Organization mission is what a company wants to complete or who they serve and an
organization vision is who the firm wants to believe and achieve. A vision is internally
focused and mission is externally focused.
How do organizational missions and visions create value for the firm? - Answer -Both
can provide value for the firm by giving them goals to aim for, and value for
stakeholders so that they can target them
, Who are an organization's stakeholders? - Answer -Individuals and groups who can
affect, and are affected by, the strategic outcomes achieved and have enforceable
claims on a firm's performance
How do different groups of stakeholders hold different interests? - Answer -Capital
market stakeholders: Shareholders
Product market stakeholders:Customers, suppliers
Organizational Stakeholders: employees
Why is it important to study and understand the external environment of the firm? -
Answer -To identify opportunities and threats:
-Opportunity: A condition in the environment that if exploited, helps a company achieve
strategic competitiveness
-Threat: A condition in the environment that may hinder a company's efforts to achieve
strategic competitiveness
Identify and describe the six segments of the general environment of the firm. - Answer
-1. Demographic
---Population size, Age structure, Geographic distribution, Ethnic mix, Income
distribution
2. Economic
---Inflation rates, Interest rates, Trade deficits or surpluses, Budget deficits or surpluses,
Personal savings rate, Business savings rates, Gross domestic product
3. Socio-cultural
--- Women in the workplace, Workforce diversity, Attitudes about quality of work life,
Concerns about environment, Shifts in work and career preferences, Shifts in product
and service preferences
4. Global
--- Significant international events, Emerging and changing global markets, Global
outsourcing, Access to resources on a global basis
5. Technological
--- Produce innovations, application of knowledge, focus of private and gov supported
R&D expenditures, new communication technologies
6. Political/legal
--- Antitrust laws, taxation laws, deregulation philosophies, labor training laws,
educational philosophies and policies
