MGT 8803 Final Exam Questions With Answers WITH UPDATED SOLUTIONS

3 factors that effect planning of organization - CORRECT ANSWER- 1) organization level (more heirarchy better with more stability) 2) degree of uncertainty (more uncertain, shorter planning horizon) 3) length of future commitments (planning horizon should be as long as length of longest commitment by management 4 functions of management - CORRECT ANSWER- 1) planning: business goals 2) organizing: allocating resources 3) leading: coordinating and directing 4) controlling: observe and analyze metrics to ensure completion of task 4 types of plans - CORRECT ANSWER- 1) strategic: broad plans with missions and goals 2) functional: related to areas of biz that support strategic plans 3) operational/tactical: narrow focus of specific activities 4) contingency: handles risks and what-ifs business strategy - CORRECT ANSWER- Goal directed actions to achieve superior performance and develop competitive advantage creating competitive advantage - CORRECT ANSWER- 1) cost leadership: underprice competition but retain higher profit margin 2) differentiation: charge higher premium than competitors for better value 3) focus (segmentation): market niches -- goes well with differentiation competitive parity - CORRECT ANSWER- When 2 or more firms in the same industry perform at the same level firm's business model - CORRECT ANSWER- Results of prior choices processes and relationships that are unique to the firm that help explain performance along with strategy components of a business model - CORRECT ANSWER- 1) markets service served: selection of markets firm chooses to compete in 2) firm infrastructure: development of core competencies to create competitive advantage 3) economic model and how revenues are generated and sources of cost core competencies - CORRECT ANSWER- Unique capabilities and resources that enable the firm to deliver and support a value proposition to its customer activity map - CORRECT ANSWER- Diagnostic tool that can be used to understand how an organization connects its value prop to the activities that enable the organization to create a competitive advantage - Darker circles represent foundations of the business model - Lighter circler show how strategy is implemented through clusters of tightly linked activities - Useful for strengthening strategic fit and assessing source and strength of competitive advantage levels of strategy - CORRECT ANSWER- 1) corporate level strategy: what businesses company will vest in and what they will do + sets grand strategies 2) business unit level strategy: competitive strategy is developed (small firm -- biz and corp function as one // large firm -- each of biz units develop their own buisness unit level strategy) 3) functional level strategy: activities of different functional areas to help achieve overall biz strategy grand strategies (business strategies) - CORRECT ANSWER- 1) growth strategy: organization attempts to increase level of its operations to increase revenue and profitability 2) stability strategy: absence of significant change -- maintaining market share (small firm -- reduces risk and defends position // large firm -- use in comb of other strategies while pursuing expansion for others) 3) renewal strategy: defensive strategy -- reducing in size or seeking stability (retrenchment: short run strategy for minor performance problems // turnaround: for more serious issues like bankruptcy) 4 ways firms grow - CORRECT ANSWER- 1) concentration: focusing on core business and increasing volume of products offered or number of markets served 2) diversification: growth via different industry -- determined at corp level 3) vertical integration: growing by gaining control of either firm inputs or outputs 4) horizontal integration: growing by combining with a competitor AFI framework - CORRECT ANSWER- 1) analysis: vision, mission, values, external and interal analysis 2) formulation: corporate, business, and functional strategy 3) implementation: structure, culture, processes, capabilities, tech, governance, and business ethics strategic management process - CORRECT ANSWER- 1) identify organization's mission, obj, and strategies 2) analyze external environment 3) evaluated internal resources ^^ SWOT analysis 4) managers formulate strategies 5) implementation of strategies 6) managers evaluate results vision statement - CORRECT ANSWER- Expression about what the organization ultimately wants to accomplish strategic intent - CORRECT ANSWER- Staking out of a desired leadership position in the industry -- focus on future and attainment of ambitious, challenging goals strategic planning process - CORRECT ANSWER- - confirm mission, vision, core values - deviated from purpose and vision? - is vision aspirational? - our strategic intent clear and effectively communicated to employees and stakeholders? mission statement - CORRECT ANSWER- How organization intends to achieve its vision and responsibilities towards the organization's key stake holders Companies with mission statements that clearly capture aspirations financially outperform their peers by a wide margin Customer oriented: provide flexibility for managers in terms of how to satisfy needs or reacting to a changing environment strategic goals - CORRECT ANSWER- Goals specific to each of the disciplinary areas of the business -- marketing, product development, financial, and HR, research, sustainability -- achieving these goals will also help achieve financial goals industry life cycle - CORRECT ANSWER- 1) development 2) introduction 3) growth 4) maturity 5) decline 4 levels of residual uncertainty - CORRECT ANSWER- 1) clear enough future: when current env trends and comp behavior are clear enough and outcomes are likely 2) alternative futures: one of a few or 2 discrete scenarios -- can't identify which will come to pass but have prob around each 3) range of futures: range of plausible futures identified -- actual outcomes may lie anywhere within a range 4) true ambiguity: number of dimensions of uncertainty will interact occasionally to create env that is impossible to predict scenario planning - CORRECT ANSWER- 1) identify multiple future scenarios 2) develop strategic plans to address scenarios 3) create strategic options (through implementation or alternative plans) 4) execute a dominate strategic plan