M EXAM 1 CH 1-4 &
S
LEADERSHIP 2026 | 100% Correct
Q&A | PES at UH | Strategic
Management | Pass Guaranteed -
A+ Graded
* *Q1:** What is the primary difference between a vision statement and a mission statement?
**[CORRECT]** A vision statement describes what an organization aspires to become in the
future, while a mission statement defines the organization's current purpose, primary business,
and target customers.
*Rationale: Standard distinction in Chapter 1 of Hitt, Ireland, and Hoskisson's Strategic
Management (2025 ed.).*
* *Q2:** What are the three primary levels of strategy in an organization?
**[CORRECT]** The three primary levels are corporate-level strategy (what businesses to
compete in), business-level strategy (how to compete in each business), and functional-level
strategy (how to support business-level strategy through specific functions).
*Rationale: Hitt et al. (2025) define these three hierarchical strategy levels in Chapter 1.*
* *Q3:** What does the acronym PESTEL stand for in external environmental analysis?
**[CORRECT]** PESTEL stands for Political, Economic, Social, Technological, Environmental
(ecological), and Legal factors.
*Rationale: Standard framework in Chapter 2 of strategic management texts for analyzing the
macro-environment.*
* *Q4:** According to Porter's Five Forces model, what are the five competitive forces that
determine industry profitability?
**[CORRECT]** The five forces are: (1) threat of new entrants, (2) bargaining power of
suppliers, (3) bargaining power of buyers, (4) threat of substitute products or services, and (5)
intensity of rivalry among existing competitors.
*Rationale: Porter's Five Forces framework is defined in Chapter 2 of Hitt et al. (2025) and Dess
et al. (2025).*
, * *Q5:** What is the difference between stakeholders and stockholders?
**[CORRECT]** Stockholders (shareholders) are individuals or entities that own shares in a
corporation, while stakeholders are any individuals or groups who can affect or are affected by
the achievement of an organization's objectives, including employees, customers, suppliers,
communities, and stockholders.
*Rationale: Chapter 1 of standard SM texts distinguishes stockholders as a subset of the
broader stakeholder group.*
* *Q6:** What is strategic management?
**[CORRECT]** Strategic management is the comprehensive set of commitments, decisions,
and actions required for a firm to achieve strategic competitiveness and earn above-average
returns.
*Rationale: Hitt et al. (2025) define strategic management in Chapter 1 as an integrative
management field.*
* *Q7:** What are the two fundamental questions that a mission statement should answer?
**[CORRECT]** A mission statement should answer: (1) What is our business? and (2) Who is
our customer?
*Rationale: Peter Drucker's classic formulation, adopted in Chapter 1 of Hitt et al. (2025).*
* *Q8:** What is the difference between an intended strategy and a realized strategy?
**[CORRECT]** An intended strategy is the strategy that an organization plans to pursue, while
a realized strategy is the strategy that the organization actually implements, which may differ
from the intended strategy due to emergent factors and unforeseen circumstances.
*Rationale: Henry Mintzberg's distinction, covered in Chapter 1 of Dess et al. (2025).*
* *Q9:** What are the three components of the industrial organization (I/O) model of
above-average returns?
**[CORRECT]** The three components are: (1) the external environment imposes pressures
and constraints that determine strategies leading to above-average returns, (2) most firms
competing within an industry are assumed to control similar strategically relevant resources, and
(3) resources used to implement strategies are highly mobile across firms.
*Rationale: Chapter 1 of Hitt et al. (2025) presents the I/O model as an alternative to the
resource-based view.*
* *Q10:** What is the primary purpose of environmental scanning?
**[CORRECT]** Environmental scanning is the process of monitoring, evaluating, and
disseminating information from the external environment to key people within the organization to
identify strategic opportunities and threats.
*Rationale: Chapter 2 of standard SM texts defines environmental scanning as a critical
strategic input activity.*
**Q11:** What is the difference between a merger and an acquisition?
S
LEADERSHIP 2026 | 100% Correct
Q&A | PES at UH | Strategic
Management | Pass Guaranteed -
A+ Graded
* *Q1:** What is the primary difference between a vision statement and a mission statement?
**[CORRECT]** A vision statement describes what an organization aspires to become in the
future, while a mission statement defines the organization's current purpose, primary business,
and target customers.
*Rationale: Standard distinction in Chapter 1 of Hitt, Ireland, and Hoskisson's Strategic
Management (2025 ed.).*
* *Q2:** What are the three primary levels of strategy in an organization?
**[CORRECT]** The three primary levels are corporate-level strategy (what businesses to
compete in), business-level strategy (how to compete in each business), and functional-level
strategy (how to support business-level strategy through specific functions).
*Rationale: Hitt et al. (2025) define these three hierarchical strategy levels in Chapter 1.*
* *Q3:** What does the acronym PESTEL stand for in external environmental analysis?
**[CORRECT]** PESTEL stands for Political, Economic, Social, Technological, Environmental
(ecological), and Legal factors.
*Rationale: Standard framework in Chapter 2 of strategic management texts for analyzing the
macro-environment.*
* *Q4:** According to Porter's Five Forces model, what are the five competitive forces that
determine industry profitability?
**[CORRECT]** The five forces are: (1) threat of new entrants, (2) bargaining power of
suppliers, (3) bargaining power of buyers, (4) threat of substitute products or services, and (5)
intensity of rivalry among existing competitors.
*Rationale: Porter's Five Forces framework is defined in Chapter 2 of Hitt et al. (2025) and Dess
et al. (2025).*
, * *Q5:** What is the difference between stakeholders and stockholders?
**[CORRECT]** Stockholders (shareholders) are individuals or entities that own shares in a
corporation, while stakeholders are any individuals or groups who can affect or are affected by
the achievement of an organization's objectives, including employees, customers, suppliers,
communities, and stockholders.
*Rationale: Chapter 1 of standard SM texts distinguishes stockholders as a subset of the
broader stakeholder group.*
* *Q6:** What is strategic management?
**[CORRECT]** Strategic management is the comprehensive set of commitments, decisions,
and actions required for a firm to achieve strategic competitiveness and earn above-average
returns.
*Rationale: Hitt et al. (2025) define strategic management in Chapter 1 as an integrative
management field.*
* *Q7:** What are the two fundamental questions that a mission statement should answer?
**[CORRECT]** A mission statement should answer: (1) What is our business? and (2) Who is
our customer?
*Rationale: Peter Drucker's classic formulation, adopted in Chapter 1 of Hitt et al. (2025).*
* *Q8:** What is the difference between an intended strategy and a realized strategy?
**[CORRECT]** An intended strategy is the strategy that an organization plans to pursue, while
a realized strategy is the strategy that the organization actually implements, which may differ
from the intended strategy due to emergent factors and unforeseen circumstances.
*Rationale: Henry Mintzberg's distinction, covered in Chapter 1 of Dess et al. (2025).*
* *Q9:** What are the three components of the industrial organization (I/O) model of
above-average returns?
**[CORRECT]** The three components are: (1) the external environment imposes pressures
and constraints that determine strategies leading to above-average returns, (2) most firms
competing within an industry are assumed to control similar strategically relevant resources, and
(3) resources used to implement strategies are highly mobile across firms.
*Rationale: Chapter 1 of Hitt et al. (2025) presents the I/O model as an alternative to the
resource-based view.*
* *Q10:** What is the primary purpose of environmental scanning?
**[CORRECT]** Environmental scanning is the process of monitoring, evaluating, and
disseminating information from the external environment to key people within the organization to
identify strategic opportunities and threats.
*Rationale: Chapter 2 of standard SM texts defines environmental scanning as a critical
strategic input activity.*
**Q11:** What is the difference between a merger and an acquisition?
