MBA 705 - Exam 1 Final Test
Questions with Correct/Verified
Solutions 2026/2027 Elaborated.
Mission - Answer is a broadly defined but enduring statement of purpose that identifies the
scope of an organization's operations and its offerings to the various stakeholders
Strategy - Answer refers to top management's plans to develop and sustain competitive
advantage so that the organization's mission is fulfilled.
Competitive advantage - Answer is a state whereby a firm's successful strategies cannot be
easily duplicated by its competitors. Maintaining a sustained competitive advantage over time
can be challenging.
sustained competitive advantage - Answer A company's strategies enable it to maintain
above-average profitability for a number of years
Strategic Management - Answer is of the environment in which the organization operates
prior to formulating a strategy, as well as the plan for implementation and control of the
strategy.
The Strategic Management Process - Answer 1. External Analysis
2. Internal Analysis
3. Strategy Formulation
4. Strategy Implementation
5. Strategic Control
External Analysis - Answer Analyze the opportunities and threats, or constraints, that exist in
the organization's external environment, including industry and forces in the external
environment
Internal Anaylsis - Answer Analyze the organization's strengths and weaknesses in its internal
environment. Consider the context of managerial ethics and corporate social responsibility
strategy formulation - Answer Formulate strategies that build and sustain competitive
advantage by matching the organization's strengths and weaknesses with the environment's
opportunities and threats.
,Strategic Implementation (Execution) - Answer Implement the strategies that have been
developed.
Strategic Control - Answer Measure success and make corrections when the strategies are
not producing the desired outcomes.
Business model - Answer explains how the organization seeks to earn a profit by selling its
goods.
Progressive firms often devise innovative business models that extract revenue - and ultimately
profits - from sources not identified by competitors.
Five Characteristics of a Successful Strategy - Answer 1. Understand the competitive
environment.
2. Understand how resources translate into strengths and weaknesses.
3. The strategy is consistent with the mission and goals of the organization.
4. Plans for putting the strategy into action are designed before it is implemented.
5. Possible future changes (i.e., strategic control) are evaluated before the strategy is adopted.
Intended Strategy - Answer what management originally plans.
may be realized just as it was planned, in a modified form, or even in an entirely different form.
Realized Strategy - Answer what management actually implements.
Hence, the original strategy may be realized with desirable or undesirable results, or it may be
modified as changes in the firm or the environment become known.
Gap between Intended and Realized - Answer The gap between the intended and realized
strategies usually results from unforeseen environmental or organizational events, better
information that was not available when the strategy was formulated, or an improvement in top
management's ability to assess its environment. Although it is important for managers to
formulate responsible strategies based on a realistic and thorough assessment of the firm and
its environment, things invariably change along the way. Hence, it is common for such a gap to
exist, creating the need for constant strategic action if a firm is to stay on course. Instead of
resisting modest strategic changes when new information is discovered, managers should
search for new information and be willing to make such changes when necessary. This activity is
part of strategic control —the final step in the strategic management process.
, Strategy as an Art - Answer The lack of environmental predictability and the fast pace of
change render elaborate strategy planning as suspect at best.
Strategic managers should emphasize creativity and innovation.
Strategies should be developed like a potter molds clay.
Strategy as a Science - Answer The scientific approach is the most widely recognized view of
strategy.
Strategic managers are encouraged to systematically assess the firm's external environment and
evaluate the pros and cons of myriad alternatives before formulating strategy.
The scientific approach is more prominent in this text.
Influence on Strategic Management - Answer Industrial Organization: a branch of
microeconomics, emphasizes the influence of the industry environment on the firm.
Resource-based theory:views performance primarily as a function of a firm's ability to utilize its
resources and emphasize the development of a distinctive competence.
Contingency theory: represents a middle ground perspective that views organizational
performance as the joint outcome of environmental forces and the firm's strategic actions.
Corporate Governance - Answer refers to the board of directors, institutional investors (e.g.,
pension and retirement funds, mutual funds, banks, insurance companies, among other money
managers), and large shareholders known as blockholders who monitor firm strategies to
ensure effective management.
Strategic decisions are typically made by the owners in small privately held firms. It's much
more complicated in large corporations.
Board of Directors - Answer Boards consist of officials elected by shareholders who are
responsible for monitoring activities in the organization. Boards are responsible for:
1. Evaluating top management's strategic proposals.
2. Establishing broad direction for the firm
3. Selecting and determining the compensation for the chief executive
Questions with Correct/Verified
Solutions 2026/2027 Elaborated.
Mission - Answer is a broadly defined but enduring statement of purpose that identifies the
scope of an organization's operations and its offerings to the various stakeholders
Strategy - Answer refers to top management's plans to develop and sustain competitive
advantage so that the organization's mission is fulfilled.
Competitive advantage - Answer is a state whereby a firm's successful strategies cannot be
easily duplicated by its competitors. Maintaining a sustained competitive advantage over time
can be challenging.
sustained competitive advantage - Answer A company's strategies enable it to maintain
above-average profitability for a number of years
Strategic Management - Answer is of the environment in which the organization operates
prior to formulating a strategy, as well as the plan for implementation and control of the
strategy.
The Strategic Management Process - Answer 1. External Analysis
2. Internal Analysis
3. Strategy Formulation
4. Strategy Implementation
5. Strategic Control
External Analysis - Answer Analyze the opportunities and threats, or constraints, that exist in
the organization's external environment, including industry and forces in the external
environment
Internal Anaylsis - Answer Analyze the organization's strengths and weaknesses in its internal
environment. Consider the context of managerial ethics and corporate social responsibility
strategy formulation - Answer Formulate strategies that build and sustain competitive
advantage by matching the organization's strengths and weaknesses with the environment's
opportunities and threats.
,Strategic Implementation (Execution) - Answer Implement the strategies that have been
developed.
Strategic Control - Answer Measure success and make corrections when the strategies are
not producing the desired outcomes.
Business model - Answer explains how the organization seeks to earn a profit by selling its
goods.
Progressive firms often devise innovative business models that extract revenue - and ultimately
profits - from sources not identified by competitors.
Five Characteristics of a Successful Strategy - Answer 1. Understand the competitive
environment.
2. Understand how resources translate into strengths and weaknesses.
3. The strategy is consistent with the mission and goals of the organization.
4. Plans for putting the strategy into action are designed before it is implemented.
5. Possible future changes (i.e., strategic control) are evaluated before the strategy is adopted.
Intended Strategy - Answer what management originally plans.
may be realized just as it was planned, in a modified form, or even in an entirely different form.
Realized Strategy - Answer what management actually implements.
Hence, the original strategy may be realized with desirable or undesirable results, or it may be
modified as changes in the firm or the environment become known.
Gap between Intended and Realized - Answer The gap between the intended and realized
strategies usually results from unforeseen environmental or organizational events, better
information that was not available when the strategy was formulated, or an improvement in top
management's ability to assess its environment. Although it is important for managers to
formulate responsible strategies based on a realistic and thorough assessment of the firm and
its environment, things invariably change along the way. Hence, it is common for such a gap to
exist, creating the need for constant strategic action if a firm is to stay on course. Instead of
resisting modest strategic changes when new information is discovered, managers should
search for new information and be willing to make such changes when necessary. This activity is
part of strategic control —the final step in the strategic management process.
, Strategy as an Art - Answer The lack of environmental predictability and the fast pace of
change render elaborate strategy planning as suspect at best.
Strategic managers should emphasize creativity and innovation.
Strategies should be developed like a potter molds clay.
Strategy as a Science - Answer The scientific approach is the most widely recognized view of
strategy.
Strategic managers are encouraged to systematically assess the firm's external environment and
evaluate the pros and cons of myriad alternatives before formulating strategy.
The scientific approach is more prominent in this text.
Influence on Strategic Management - Answer Industrial Organization: a branch of
microeconomics, emphasizes the influence of the industry environment on the firm.
Resource-based theory:views performance primarily as a function of a firm's ability to utilize its
resources and emphasize the development of a distinctive competence.
Contingency theory: represents a middle ground perspective that views organizational
performance as the joint outcome of environmental forces and the firm's strategic actions.
Corporate Governance - Answer refers to the board of directors, institutional investors (e.g.,
pension and retirement funds, mutual funds, banks, insurance companies, among other money
managers), and large shareholders known as blockholders who monitor firm strategies to
ensure effective management.
Strategic decisions are typically made by the owners in small privately held firms. It's much
more complicated in large corporations.
Board of Directors - Answer Boards consist of officials elected by shareholders who are
responsible for monitoring activities in the organization. Boards are responsible for:
1. Evaluating top management's strategic proposals.
2. Establishing broad direction for the firm
3. Selecting and determining the compensation for the chief executive
