MBA 705 Exam 2 - Minsun Kim
questions and answers
Arguments against a CSR ✔✔emphasizes that firms should be active socially only
when doing so enhances profits. Managers don't know what's in the best interest
of society and they shouldn't spend shareholder resources on such endeavors.
Firms don't need to "give back" because they already serve society by providing
needed products, jobs, and tax revenues
Moral hazard ✔✔when parties in an arrangement- such as owners and managers -
do not share the risks and benefit equally
-example: mechanic knows more than a car buyer, uses asymmetric information
and could use their knowledge to exploit
- a taxi driver could take a longer route to earn more money
- the agent, in this case, the mechanic or taxi driver, knows more than the buyer
or passengerInternal Analaysis ✔✔Looking inside the firm to analyze its resources,
capabilities, and core competencies allows us to understand its strengths and
weaknesses
-Linking a firm's internal analysis to it's external analysis leverages its internal
strengths to exploit external opportunities and mitigate internal weaknesses and
threats
Two Methods of Internal Evaluation ✔✔1. Resource Based View (RBV) and VRIO
Framework
2. Value Chain Analysis
,Core Competencies ✔✔unique strengths embedded deep within a firm
Examples:
Google - superior in creating proprietary algorithms based on large amounts of
online data, superior AI capability
Netflix- superior in creating proprietary algorithms based on individual customer
preferences
Exxon - superior at discovering and exploring fossil-fuel-based energy sources
globally
Two types of resources ✔✔Tangible and intangible
Tangible resources ✔✔resources that can be readily seen, touched and quantified.
Examples: cash, physical assets such as a firm's property, plant, and equipment
Intangible resources ✔✔resources that are difficult to see, touch, or quantify
-Competitive advantage is more likely from this type of resource, developing them
will allow the firm to achieve long-term competitive advantages
Examples:
-knowledge and skills of employees
a firm's reputation
-brand name
-exlcusive rights to intellectual property
-Leadership traits of executives
, a Firm's culture
Capabilities ✔✔the firm's ability to bundle, manage, or otherwise exploit
resources in a manner that provides added value and advantage over competitors
-organizational and managerial skills necessary to orchestrate a diverse set of
resources and to deploy them strategically
-by nature are intangible
Resource Based View (RBV) ✔✔-model sees resources as key to superior firm
performance
-examines any resources and capabilities of the firm that may provide a
competitive advantage
- in this view, a firm is assumed to be a unique bundle of resources, capabilities
and competencies
Two Assumptions critical to the RBV ✔✔1. Resource Heterogeneity
2. Resource Immobility
Resource Heterogeneity ✔✔- bundles of resources, capabilities, and
competencies differ across firms
- Southwest Airlines and Alaska Airlines have different resource bundles
- SWA: Higher employee productivity
- informal organization, pilots help load luggage, flight attendants clean airplanes
questions and answers
Arguments against a CSR ✔✔emphasizes that firms should be active socially only
when doing so enhances profits. Managers don't know what's in the best interest
of society and they shouldn't spend shareholder resources on such endeavors.
Firms don't need to "give back" because they already serve society by providing
needed products, jobs, and tax revenues
Moral hazard ✔✔when parties in an arrangement- such as owners and managers -
do not share the risks and benefit equally
-example: mechanic knows more than a car buyer, uses asymmetric information
and could use their knowledge to exploit
- a taxi driver could take a longer route to earn more money
- the agent, in this case, the mechanic or taxi driver, knows more than the buyer
or passengerInternal Analaysis ✔✔Looking inside the firm to analyze its resources,
capabilities, and core competencies allows us to understand its strengths and
weaknesses
-Linking a firm's internal analysis to it's external analysis leverages its internal
strengths to exploit external opportunities and mitigate internal weaknesses and
threats
Two Methods of Internal Evaluation ✔✔1. Resource Based View (RBV) and VRIO
Framework
2. Value Chain Analysis
,Core Competencies ✔✔unique strengths embedded deep within a firm
Examples:
Google - superior in creating proprietary algorithms based on large amounts of
online data, superior AI capability
Netflix- superior in creating proprietary algorithms based on individual customer
preferences
Exxon - superior at discovering and exploring fossil-fuel-based energy sources
globally
Two types of resources ✔✔Tangible and intangible
Tangible resources ✔✔resources that can be readily seen, touched and quantified.
Examples: cash, physical assets such as a firm's property, plant, and equipment
Intangible resources ✔✔resources that are difficult to see, touch, or quantify
-Competitive advantage is more likely from this type of resource, developing them
will allow the firm to achieve long-term competitive advantages
Examples:
-knowledge and skills of employees
a firm's reputation
-brand name
-exlcusive rights to intellectual property
-Leadership traits of executives
, a Firm's culture
Capabilities ✔✔the firm's ability to bundle, manage, or otherwise exploit
resources in a manner that provides added value and advantage over competitors
-organizational and managerial skills necessary to orchestrate a diverse set of
resources and to deploy them strategically
-by nature are intangible
Resource Based View (RBV) ✔✔-model sees resources as key to superior firm
performance
-examines any resources and capabilities of the firm that may provide a
competitive advantage
- in this view, a firm is assumed to be a unique bundle of resources, capabilities
and competencies
Two Assumptions critical to the RBV ✔✔1. Resource Heterogeneity
2. Resource Immobility
Resource Heterogeneity ✔✔- bundles of resources, capabilities, and
competencies differ across firms
- Southwest Airlines and Alaska Airlines have different resource bundles
- SWA: Higher employee productivity
- informal organization, pilots help load luggage, flight attendants clean airplanes
