BADM 449 Exam 1 Questions and
Answers
"Razor-blade model" - ANSWER-Give away or sell for a small fee the product and
make money on the replacement part needed (ex: laser printers with cheap printers
and expensive ink)
Multi-point Competition - ANSWER-Google and Microsoft compete with one another
for market share in several different product categories through quite different
business models.
- Google: benefits from network effects (increase of product value when more people
use it); give away products b/c business ads
- Microsoft: application software dominance; Bing provides countervailing power
Acceleration of technological change - ANSWER-- Initial innovations like the car,
plane, phone, and electricity now provide the necessary infrastructure for newer
innovations to diffuse more rapidly
- Emergence of new business models that make innovations more accessible
- Internet, social networking sites, viral messaging
Stakeholders - ANSWER-Individuals or groups who can affect or are affected by the
actions of the firm; they have a claim or interest in the performance and continued
survival of the firm
- Internal Stakeholders: stockholders, all employees, board members
- External Stakeholders: customers, suppliers, alliance partners, creditors, unions,
communities, and governments at various levels
Customer-Oriented Mission - ANSWER-define the terms of solutions for customers
- Disney: "Make People Happy"
- Enhanced strategic flexibility
- Not the same as listening to customers
Product-Oriented Mission - ANSWER-define the terms of products or services
- U.S. Railrods: "Safest..Northern American Railroad"
Fall of the U.S. Railroads - ANSWER-- Lost customers b/c they assumed themselves
to be in the railroad business rather than the transportation business
- With the wide range of choices (trucks and planes), they missed the opportunity to
move into delivery like FedEx or UPS
Mission Statements - ANSWER-- The results are mixed, (inconclusive) on if they
help gain and sustain competitive advantage; need strategic commitments to
succeed (Boeing Dreamliner)
- Positive associations: visionary firms, like Merk
, - Negative associations: Better World Books
- No associations: Intel
Strategic Planning - ANSWER-a top-down, rational process management programs
future successes; concentrates strategic intelligence and decision-making
responsibilities from the CEO
- Define mission, vision, and goal (strategic intent)
- SWOT Analysis
- Formulate and implement appropriate strategy
- Modify performance and modify if necessary
Scenario Planning - ANSWER-- Envision different what-if plans
- generates a dominant plans, implements the most probable option
- Keep other scenarios in the event of changes
- AFI framework (Analyze, Formulate, Implement)
Planned Emergence - ANSWER-- Strategy can come from the top or bottom: some
intended strategies drop off in the process, allows for new emerging ideas to become
realized, resource allocation process, serendipity can have dramatic effects
- Mintzberg Planning Framework
Rational Decision Making - ANSWER-- An optimal decision if possible
- All relevant information is available
- All relevant information is understandable
- All alternatives are known
- All possible outcomes known
- Assumption:managers as decision makers
"Satisficing" Decision Making - ANSWER-- Time Constraints
- Limited ability to understand all factors
- Inadequate base of information
- Limited memory of decision-makers
- Poor perception of factors to be considered in decision process
Symptoms of Groupthink - ANSWER-- Illusion of invulnerability
- Belief in the inherent morality of the group
- Stereotyped views of members of the opposing groups
- Application of pressure to members who express doubts about the group's shared
allusions or question the validity of arguments proposed
- Practice of self-censorship
- Appointments of mindguards
Groupthink Solutions - ANSWER-Conflict-Inducing Decision-Making Processes to
prevent groupthink and lead to better decisions
- Devil's Advocacy
- Dialectical Inquiry
- Structural Debate
Answers
"Razor-blade model" - ANSWER-Give away or sell for a small fee the product and
make money on the replacement part needed (ex: laser printers with cheap printers
and expensive ink)
Multi-point Competition - ANSWER-Google and Microsoft compete with one another
for market share in several different product categories through quite different
business models.
- Google: benefits from network effects (increase of product value when more people
use it); give away products b/c business ads
- Microsoft: application software dominance; Bing provides countervailing power
Acceleration of technological change - ANSWER-- Initial innovations like the car,
plane, phone, and electricity now provide the necessary infrastructure for newer
innovations to diffuse more rapidly
- Emergence of new business models that make innovations more accessible
- Internet, social networking sites, viral messaging
Stakeholders - ANSWER-Individuals or groups who can affect or are affected by the
actions of the firm; they have a claim or interest in the performance and continued
survival of the firm
- Internal Stakeholders: stockholders, all employees, board members
- External Stakeholders: customers, suppliers, alliance partners, creditors, unions,
communities, and governments at various levels
Customer-Oriented Mission - ANSWER-define the terms of solutions for customers
- Disney: "Make People Happy"
- Enhanced strategic flexibility
- Not the same as listening to customers
Product-Oriented Mission - ANSWER-define the terms of products or services
- U.S. Railrods: "Safest..Northern American Railroad"
Fall of the U.S. Railroads - ANSWER-- Lost customers b/c they assumed themselves
to be in the railroad business rather than the transportation business
- With the wide range of choices (trucks and planes), they missed the opportunity to
move into delivery like FedEx or UPS
Mission Statements - ANSWER-- The results are mixed, (inconclusive) on if they
help gain and sustain competitive advantage; need strategic commitments to
succeed (Boeing Dreamliner)
- Positive associations: visionary firms, like Merk
, - Negative associations: Better World Books
- No associations: Intel
Strategic Planning - ANSWER-a top-down, rational process management programs
future successes; concentrates strategic intelligence and decision-making
responsibilities from the CEO
- Define mission, vision, and goal (strategic intent)
- SWOT Analysis
- Formulate and implement appropriate strategy
- Modify performance and modify if necessary
Scenario Planning - ANSWER-- Envision different what-if plans
- generates a dominant plans, implements the most probable option
- Keep other scenarios in the event of changes
- AFI framework (Analyze, Formulate, Implement)
Planned Emergence - ANSWER-- Strategy can come from the top or bottom: some
intended strategies drop off in the process, allows for new emerging ideas to become
realized, resource allocation process, serendipity can have dramatic effects
- Mintzberg Planning Framework
Rational Decision Making - ANSWER-- An optimal decision if possible
- All relevant information is available
- All relevant information is understandable
- All alternatives are known
- All possible outcomes known
- Assumption:managers as decision makers
"Satisficing" Decision Making - ANSWER-- Time Constraints
- Limited ability to understand all factors
- Inadequate base of information
- Limited memory of decision-makers
- Poor perception of factors to be considered in decision process
Symptoms of Groupthink - ANSWER-- Illusion of invulnerability
- Belief in the inherent morality of the group
- Stereotyped views of members of the opposing groups
- Application of pressure to members who express doubts about the group's shared
allusions or question the validity of arguments proposed
- Practice of self-censorship
- Appointments of mindguards
Groupthink Solutions - ANSWER-Conflict-Inducing Decision-Making Processes to
prevent groupthink and lead to better decisions
- Devil's Advocacy
- Dialectical Inquiry
- Structural Debate
