MGMT3013 STRATEGIC MANAGEMENT
TEST QUESTIONS WITH COMPLETE
ANSWERS
Organizational Core Values - Answer-Ethical standards and norms that govern the
behavior of individuals within a firm or organization.
Planned Emergence - Answer-Strategy process in which organizational structure and
systems allow bottom-up strategic initiatives to emerge and be evaluated and
coordinated by top management.
Realized Strategy - Answer-Combination of intended and emergent strategy
Resource-allocation Process (RAP) - Answer-The way a firm allocates its resources
based on predetermined policies, which can be critical in shaping its realized strategy.
Scenario Planning - Answer-Strategy-planning activity in which top management
envisions different what-if scenarios to anticipate plausible futures in order to derive
strategic responses.
Key to a successful strategy - Answer-Combine activities for a unique strategic position
in an industry
Competitive Advantage has to come from: - Answer-Performing different activities or
performing the same activities differently than rivals.
I/O Model of Above Average Returns - Answer-Explains the external environment's
dominant influence on a firm's strategic actions considering the following assumptions:
1. The external environment imposes pressures and constraints
2. Firms competing within an industry control similar resources
3. Resources are assumed to be highly mobile across firms
4. Managers are rational and committed to profit-maximization
Determinants of Firm Performance - Answer-Industry effects; Firm effects; Other Effects
(Business Cycle Effects, Unexplained Variance)
Industry effects - Answer-describe the underlying economic structure of the industry.
About 20% of a firm's profitability depends on the industry it's in.
Firm Effects - Answer-firm performance is attributed to managerial actions.
A firm's strategy can explain up to 55% of its performance.
Rewards of Superior Value creation and capture - Answer-Profitability and market share
, Stakeholder Impact Analysis - Answer-A decision tool used by managers to recognize,
prioritize, and address stakeholder needs.
Helps the firm achieve a competitive advantage while acting as a good corporate citizen
Black Swan Events - Answer-Incidents that describe highly improbable but high-impact
events.
Autonomous actions - Answer-Strategic initiatives undertaken by lower-level employees
on their own volition and often in response to unexpected situations.
Core Values Statement - Answer-Statement of principles to guide an organization as it
works to achieve its vision and fulfill its mission, for both internal conduct and external
interactions; it often includes explicit ethical considerations.
Dominant Strategic Plan - Answer-The strategic option that top managers decide most
closely matches the current reality and which is then executed.
Emergent Strategy - Answer-Any unplanned strategic initiative bubbling up from the
bottom of the organization.
Illusion of Control - Answer-A tendency by people to overestimate their ability to control
events.
Intended Strategy - Answer-The outcome of a rational and structured top-down strategic
plan.
Level-5 Leadership Pyramid - Answer-A conceptual framework of leadership
progression with five distinct, sequential levels.
Mission - Answer-Description of what an organization actually does - the products and
services it plans to provide, and the markets in which it will compete.
Serendipity - Answer-Any random events, pleasant surprises, and accidental
happenstances that can have a profound impact on a firm's strategic initiatives.
Strategic Business Unit (SBU) - Answer-A standalone division of a larger conglomerate,
with its own profit-and-loss responsibility.
Strategic Commitments - Answer-Actions to achieve the mission that are costly, long-
term oriented, and difficult to reverse.
Strategic Initiative - Answer-Any activity a firm pursues to explore and develop new
products and processes, new markets, or new ventures.
TEST QUESTIONS WITH COMPLETE
ANSWERS
Organizational Core Values - Answer-Ethical standards and norms that govern the
behavior of individuals within a firm or organization.
Planned Emergence - Answer-Strategy process in which organizational structure and
systems allow bottom-up strategic initiatives to emerge and be evaluated and
coordinated by top management.
Realized Strategy - Answer-Combination of intended and emergent strategy
Resource-allocation Process (RAP) - Answer-The way a firm allocates its resources
based on predetermined policies, which can be critical in shaping its realized strategy.
Scenario Planning - Answer-Strategy-planning activity in which top management
envisions different what-if scenarios to anticipate plausible futures in order to derive
strategic responses.
Key to a successful strategy - Answer-Combine activities for a unique strategic position
in an industry
Competitive Advantage has to come from: - Answer-Performing different activities or
performing the same activities differently than rivals.
I/O Model of Above Average Returns - Answer-Explains the external environment's
dominant influence on a firm's strategic actions considering the following assumptions:
1. The external environment imposes pressures and constraints
2. Firms competing within an industry control similar resources
3. Resources are assumed to be highly mobile across firms
4. Managers are rational and committed to profit-maximization
Determinants of Firm Performance - Answer-Industry effects; Firm effects; Other Effects
(Business Cycle Effects, Unexplained Variance)
Industry effects - Answer-describe the underlying economic structure of the industry.
About 20% of a firm's profitability depends on the industry it's in.
Firm Effects - Answer-firm performance is attributed to managerial actions.
A firm's strategy can explain up to 55% of its performance.
Rewards of Superior Value creation and capture - Answer-Profitability and market share
, Stakeholder Impact Analysis - Answer-A decision tool used by managers to recognize,
prioritize, and address stakeholder needs.
Helps the firm achieve a competitive advantage while acting as a good corporate citizen
Black Swan Events - Answer-Incidents that describe highly improbable but high-impact
events.
Autonomous actions - Answer-Strategic initiatives undertaken by lower-level employees
on their own volition and often in response to unexpected situations.
Core Values Statement - Answer-Statement of principles to guide an organization as it
works to achieve its vision and fulfill its mission, for both internal conduct and external
interactions; it often includes explicit ethical considerations.
Dominant Strategic Plan - Answer-The strategic option that top managers decide most
closely matches the current reality and which is then executed.
Emergent Strategy - Answer-Any unplanned strategic initiative bubbling up from the
bottom of the organization.
Illusion of Control - Answer-A tendency by people to overestimate their ability to control
events.
Intended Strategy - Answer-The outcome of a rational and structured top-down strategic
plan.
Level-5 Leadership Pyramid - Answer-A conceptual framework of leadership
progression with five distinct, sequential levels.
Mission - Answer-Description of what an organization actually does - the products and
services it plans to provide, and the markets in which it will compete.
Serendipity - Answer-Any random events, pleasant surprises, and accidental
happenstances that can have a profound impact on a firm's strategic initiatives.
Strategic Business Unit (SBU) - Answer-A standalone division of a larger conglomerate,
with its own profit-and-loss responsibility.
Strategic Commitments - Answer-Actions to achieve the mission that are costly, long-
term oriented, and difficult to reverse.
Strategic Initiative - Answer-Any activity a firm pursues to explore and develop new
products and processes, new markets, or new ventures.
