MGMT 475 - Exam 1 Terms Study Guide
strategy - ANSWER a set of related actions that managers take to increase their
company's performance
strategic leadership - ANSWER creating competitive advantage through
effective management of the strategy-making process
strategy forumulation - ANSWER selecting strategies based on analysis of an
organization's external and internal environment
strategy implementation - ANSWER putting strategies into action
risk capital - ANSWER equity capital invested with no guarantee that
stockholders will recoup their cash or earn a decent return
shareholder value - ANSWER returns that shareholders earn from purchasing
shares in a company
profitability - ANSWER the return a company makes on the capital invested in
the enterpriese
profit growth - ANSWER the increase in net profit over time
competitive advantage - ANSWER the achieve advantage over rivals when a
company's profitability is greater than the average profitability of firms in its
industry
sustained competitive advantage - ANSWER a company's strategies enable it to
maintain above-average profitability for a number of years
business model - ANSWER the conception of how strategies should work
together as a whole to enable the company to achieve competitive advantage
general managers - ANSWER managers who bear responsibility for the overall
performance of the company or for one of its major self-contained subunits of
divisions
functional managers - ANSWER managers responsible for supervising a
particular function, that is, a task, activity, or operation, such as accounting,
marketing, research and development (R&D), information technology or
logistics
, multidivisional company - ANSWER a company that competes in several
different businesses and has created a separate, self-contained division to
manage each
business unit - ANSWER a self-contained division that provides a product or
service for a particular market
mission - ANSWER the purpose of the company, or a statement of what the
company strives to do
vision - ANSWER the articulation of a company's desired achievement of future
state
values - ANSWER a statement of how employees should conduct themselves and
their business to help achieve the company mission
characteristics of effective goals - ANSWER precise and measurable, address
crucial issues, challenging but realistic, specify a time period in which the goals
should be achieved
SWOT analysis - ANSWER the comparison of strengths, weaknesses,
opportunities, and threats
purpose of SWOT - ANSWER build on and protect strengths, eradicate
weaknesses, exploit external opportunities, counter threats
scenario planning - ANSWER formulating plans that are baed upon "what-if"
scenarios about the future
cognititve biases - ANSWER systematic errors in decision making that arise from
the way people process information
prior hypothesis bias - ANSWER a cognitive bias that occurs when decision
makers who have strong prior beliefs tend to make decisions on the basis of
these beliefs, even when presented with evidence that their beliefs are wrong
escalating commitment - ANSWER a cognitive bias that occurs when decision
makers, having already committed significant resources to a project, commit
even more resources after receiving feedback that the project is failing
reasoning by analogy - ANSWER use of simple analogies to make sense out of
complex problems
representativeness - ANSWER a bias rooted in the tendency to generalize from a
small sample or even a single, vivid anecdote
strategy - ANSWER a set of related actions that managers take to increase their
company's performance
strategic leadership - ANSWER creating competitive advantage through
effective management of the strategy-making process
strategy forumulation - ANSWER selecting strategies based on analysis of an
organization's external and internal environment
strategy implementation - ANSWER putting strategies into action
risk capital - ANSWER equity capital invested with no guarantee that
stockholders will recoup their cash or earn a decent return
shareholder value - ANSWER returns that shareholders earn from purchasing
shares in a company
profitability - ANSWER the return a company makes on the capital invested in
the enterpriese
profit growth - ANSWER the increase in net profit over time
competitive advantage - ANSWER the achieve advantage over rivals when a
company's profitability is greater than the average profitability of firms in its
industry
sustained competitive advantage - ANSWER a company's strategies enable it to
maintain above-average profitability for a number of years
business model - ANSWER the conception of how strategies should work
together as a whole to enable the company to achieve competitive advantage
general managers - ANSWER managers who bear responsibility for the overall
performance of the company or for one of its major self-contained subunits of
divisions
functional managers - ANSWER managers responsible for supervising a
particular function, that is, a task, activity, or operation, such as accounting,
marketing, research and development (R&D), information technology or
logistics
, multidivisional company - ANSWER a company that competes in several
different businesses and has created a separate, self-contained division to
manage each
business unit - ANSWER a self-contained division that provides a product or
service for a particular market
mission - ANSWER the purpose of the company, or a statement of what the
company strives to do
vision - ANSWER the articulation of a company's desired achievement of future
state
values - ANSWER a statement of how employees should conduct themselves and
their business to help achieve the company mission
characteristics of effective goals - ANSWER precise and measurable, address
crucial issues, challenging but realistic, specify a time period in which the goals
should be achieved
SWOT analysis - ANSWER the comparison of strengths, weaknesses,
opportunities, and threats
purpose of SWOT - ANSWER build on and protect strengths, eradicate
weaknesses, exploit external opportunities, counter threats
scenario planning - ANSWER formulating plans that are baed upon "what-if"
scenarios about the future
cognititve biases - ANSWER systematic errors in decision making that arise from
the way people process information
prior hypothesis bias - ANSWER a cognitive bias that occurs when decision
makers who have strong prior beliefs tend to make decisions on the basis of
these beliefs, even when presented with evidence that their beliefs are wrong
escalating commitment - ANSWER a cognitive bias that occurs when decision
makers, having already committed significant resources to a project, commit
even more resources after receiving feedback that the project is failing
reasoning by analogy - ANSWER use of simple analogies to make sense out of
complex problems
representativeness - ANSWER a bias rooted in the tendency to generalize from a
small sample or even a single, vivid anecdote
