MGMT 478 Exam 1 - Joel Stevenson UPDATED ACTUAL Questions And Correct
Answers
Terms in this set (98)
Strategic Management The set of decisions and actions that result in the formulation and implementation
of plans designed to achieve a company's objectives.
Strategy Large-scale, future-oriented plans for interacting with the competitive
environment to achieve company objectives.
Formality The degree to which participation, responsibility, authority, and discretion in
decision making are specified in strategic management.
Entrepreneurial mode The informal, intuitive, and limited approach to strategic management associated
with owner-managers of smaller firms.
Planning mode The strategic formality associated with large firms that operate under a
comprehensive, formal planning system.
Adaptive mode The strategic formality associated with medium-sized firms that emphasize the
incremental modification of existing competitive approaches.
Company mission The unique purpose that sets a company apart from others of its type and
identifies the scope of its operations.
Long-term objectives The results that an organization seeks to achieve over a multiyear period.
Generic strategies Fundamental philosophical options for the design of strategies.
Grand strategies The means by which objectives are achieved.
Short-term objectives Desired results that provide specific guidance for action during a period of one
year or less.
Functional tactics Short-term, narrow scoped plans that detail the "means" or activities that a
company will use to achieve short-term objectives.
Policies Predetermined decisions that substitute for managerial discretion in repetitive
decision making.
Strategic control Tracking a strategy as it is being implemented, detecting problems or changes in
its underlying premises, and making necessary adjustments.
Continuous improvement A form of strategic control in which managers are encouraged to be proactive in
improving all operations of the firm.
, Process The flow of information through interrelated stages of analysis toward the
achievement of an aim.
Stakeholders Influential people who are vitally interested in the actions of the business.
Feedback The analysis of post-implementation results that can be used to enhance future
decision making.
Dynamic The term that characterizes the constantly changing conditions that affect
interrelated and interdependent strategic activities.
Company mission The unique purpose that sets a company apart from others of its type and
identifies the scope of its operations in product, market and technology terms.
Company creed A company's statement of its philosophy.
Vision statement A statement that presents a firm's strategic intent designed to focus the energies
and resources of the company on achieving a desirable future.
Board of directors The group of stockholder representatives and strategic managers responsible for
overseeing the creation and accomplishment of the company mission.
Agency theory A set of ideas on organizational control based on the belief that the separation of
the ownership from management creates the potential for the wishes of owners to
be ignored.
Agency costs The cost of agency problems and the cost of actions taken to minimize them.
Moral hazard problem An agency problem that occurs because owners have limited access to company
information, making executives free to pursue their own interests.
Adverse selection An agency problem caused by the limited ability of stockholders to precisely
determine the competencies and priorities of executives at the time they are
hired.
Economic responsibilities The duty of managers, as agents of the company owners, to maximize stockholder
wealth.
Legal responsibilities The firm's obligations to comply with the laws that regulate business activities.
Ethical responsibilities The strategic managers' notion of right and proper business behavior.
Discretionary responsibilities Responsibilities voluntarily assumed by a business, such as public relations, good
citizenship, and full corporate responsibility.
Corporate social responsibility (CSR) The idea that business has a duty to serve society in general as well as the
financial interest of stockholders.
Sarbanes-Oxley Act of 2002 Law that revised and strengthened auditing and accounting standards.
Answers
Terms in this set (98)
Strategic Management The set of decisions and actions that result in the formulation and implementation
of plans designed to achieve a company's objectives.
Strategy Large-scale, future-oriented plans for interacting with the competitive
environment to achieve company objectives.
Formality The degree to which participation, responsibility, authority, and discretion in
decision making are specified in strategic management.
Entrepreneurial mode The informal, intuitive, and limited approach to strategic management associated
with owner-managers of smaller firms.
Planning mode The strategic formality associated with large firms that operate under a
comprehensive, formal planning system.
Adaptive mode The strategic formality associated with medium-sized firms that emphasize the
incremental modification of existing competitive approaches.
Company mission The unique purpose that sets a company apart from others of its type and
identifies the scope of its operations.
Long-term objectives The results that an organization seeks to achieve over a multiyear period.
Generic strategies Fundamental philosophical options for the design of strategies.
Grand strategies The means by which objectives are achieved.
Short-term objectives Desired results that provide specific guidance for action during a period of one
year or less.
Functional tactics Short-term, narrow scoped plans that detail the "means" or activities that a
company will use to achieve short-term objectives.
Policies Predetermined decisions that substitute for managerial discretion in repetitive
decision making.
Strategic control Tracking a strategy as it is being implemented, detecting problems or changes in
its underlying premises, and making necessary adjustments.
Continuous improvement A form of strategic control in which managers are encouraged to be proactive in
improving all operations of the firm.
, Process The flow of information through interrelated stages of analysis toward the
achievement of an aim.
Stakeholders Influential people who are vitally interested in the actions of the business.
Feedback The analysis of post-implementation results that can be used to enhance future
decision making.
Dynamic The term that characterizes the constantly changing conditions that affect
interrelated and interdependent strategic activities.
Company mission The unique purpose that sets a company apart from others of its type and
identifies the scope of its operations in product, market and technology terms.
Company creed A company's statement of its philosophy.
Vision statement A statement that presents a firm's strategic intent designed to focus the energies
and resources of the company on achieving a desirable future.
Board of directors The group of stockholder representatives and strategic managers responsible for
overseeing the creation and accomplishment of the company mission.
Agency theory A set of ideas on organizational control based on the belief that the separation of
the ownership from management creates the potential for the wishes of owners to
be ignored.
Agency costs The cost of agency problems and the cost of actions taken to minimize them.
Moral hazard problem An agency problem that occurs because owners have limited access to company
information, making executives free to pursue their own interests.
Adverse selection An agency problem caused by the limited ability of stockholders to precisely
determine the competencies and priorities of executives at the time they are
hired.
Economic responsibilities The duty of managers, as agents of the company owners, to maximize stockholder
wealth.
Legal responsibilities The firm's obligations to comply with the laws that regulate business activities.
Ethical responsibilities The strategic managers' notion of right and proper business behavior.
Discretionary responsibilities Responsibilities voluntarily assumed by a business, such as public relations, good
citizenship, and full corporate responsibility.
Corporate social responsibility (CSR) The idea that business has a duty to serve society in general as well as the
financial interest of stockholders.
Sarbanes-Oxley Act of 2002 Law that revised and strengthened auditing and accounting standards.
