MGT 4150 TEST 1 QUESTIONS WITH
CORRECT ANSWERS
What are the 5 tasks to strategy making and executing? - Answer- 1: Developing a
strategic vision, mission statement, and core values
2: Set objectives
3: Craft the strategy
4: Execute strategy
5: Evaluate performance and make adjustments
Strategic Vision - Answer- describes management's aspirations for the future and
delineates the company's strategic course & long-term direction; "where we are going"
& why it makes sense
What are characteristics of a good vision? - Answer- distinctive and specific, graphic,
forward-looking, focused, feasible, memorable
How long should a vision be? - Answer- one to two paragraphs, and able to be
explained in 5-10 minutes
Mission Statement - Answer- describes the enterprise's present business and purpose;
"who we are, what we do, and why we are here"
What are the necessary components of a mission statement? - Answer- company's
product, the buyer it seeks to satisfy, and company identity
Values - Answer- sometimes called Core values; beliefs, traits, and behavioral norms
that management has determined should guide the pursuit of its vision and mission
Give some examples of typical values - Answer- fair treatment, integrity, ethical
behavior, innovativeness, teamwork, top-notch quality, superior customer service, social
responsibility, community citizenship
Objectives - Answer- organization's performance targets; specific results management
wants to achieve
What is the purpose of an objective? - Answer- to convert vision and mission into
performance targets
, What should an objective be? - Answer- quantifiable, measurable, tangible, and contain
a deadline for the achievement, have consequences if not completed
Stretch Objectives - Answer- high targets set to stretch the organization to perform at
full potential and deliver best possible results
Strategic Intent - Answer- relentlessly pursues an ambitious strategic objective,
concentrating the full force of its resources and competitive actions on achieving that
objective
Financial Objective - Answer- communicate management's goals for financial
performance
Examples of financial objectives - Answer- □ An x percent increase in annual revenues
□ Annual increases in after-tax profits of x percent
□ Annual increases in earnings per share of x percent
□ Annual dividend increases of x percent
□ Profit margins of x percent
□ An x percent return of capital employed or return on shareholders' equity investment
□ Increased shareholder value - in the form of an upward trending stock price
□ Bond and credit ratings of x
□ Internal cash flows of x dollars to fund new capital investment
Strategic Objective - Answer- goals concerning company's marketing standing and
competitive position
Examples of strategic objectives - Answer- □ Winning an x percent market share
□ Achieving lower overall costs than rivals
□ Overtaking key competitors on product performance or quality or customer service
□ Deriving x percent of revenues from the sale of new products introduced within the
past five years
□ Having broader or deeper technological capabilities than rivals
□ Having a wider product line than rivals
□ Having a better-known or more powerful brand name than rivals
□ Having stronger national or global sales and distribution capabilities than rivals
Consistently getting new or improved products to market ahead of rivals
Explain the two types of objectives in regards to length. - Answer- Short Term: typically
quarterly or annual, for the current period to satisfy shareholder expectations
Long Term: typically 3-5 years, consider what to do now to put company in position to
perform better later
Strategy - Answer- action plan for outperforming competitors and achieving superior
profitability
CORRECT ANSWERS
What are the 5 tasks to strategy making and executing? - Answer- 1: Developing a
strategic vision, mission statement, and core values
2: Set objectives
3: Craft the strategy
4: Execute strategy
5: Evaluate performance and make adjustments
Strategic Vision - Answer- describes management's aspirations for the future and
delineates the company's strategic course & long-term direction; "where we are going"
& why it makes sense
What are characteristics of a good vision? - Answer- distinctive and specific, graphic,
forward-looking, focused, feasible, memorable
How long should a vision be? - Answer- one to two paragraphs, and able to be
explained in 5-10 minutes
Mission Statement - Answer- describes the enterprise's present business and purpose;
"who we are, what we do, and why we are here"
What are the necessary components of a mission statement? - Answer- company's
product, the buyer it seeks to satisfy, and company identity
Values - Answer- sometimes called Core values; beliefs, traits, and behavioral norms
that management has determined should guide the pursuit of its vision and mission
Give some examples of typical values - Answer- fair treatment, integrity, ethical
behavior, innovativeness, teamwork, top-notch quality, superior customer service, social
responsibility, community citizenship
Objectives - Answer- organization's performance targets; specific results management
wants to achieve
What is the purpose of an objective? - Answer- to convert vision and mission into
performance targets
, What should an objective be? - Answer- quantifiable, measurable, tangible, and contain
a deadline for the achievement, have consequences if not completed
Stretch Objectives - Answer- high targets set to stretch the organization to perform at
full potential and deliver best possible results
Strategic Intent - Answer- relentlessly pursues an ambitious strategic objective,
concentrating the full force of its resources and competitive actions on achieving that
objective
Financial Objective - Answer- communicate management's goals for financial
performance
Examples of financial objectives - Answer- □ An x percent increase in annual revenues
□ Annual increases in after-tax profits of x percent
□ Annual increases in earnings per share of x percent
□ Annual dividend increases of x percent
□ Profit margins of x percent
□ An x percent return of capital employed or return on shareholders' equity investment
□ Increased shareholder value - in the form of an upward trending stock price
□ Bond and credit ratings of x
□ Internal cash flows of x dollars to fund new capital investment
Strategic Objective - Answer- goals concerning company's marketing standing and
competitive position
Examples of strategic objectives - Answer- □ Winning an x percent market share
□ Achieving lower overall costs than rivals
□ Overtaking key competitors on product performance or quality or customer service
□ Deriving x percent of revenues from the sale of new products introduced within the
past five years
□ Having broader or deeper technological capabilities than rivals
□ Having a wider product line than rivals
□ Having a better-known or more powerful brand name than rivals
□ Having stronger national or global sales and distribution capabilities than rivals
Consistently getting new or improved products to market ahead of rivals
Explain the two types of objectives in regards to length. - Answer- Short Term: typically
quarterly or annual, for the current period to satisfy shareholder expectations
Long Term: typically 3-5 years, consider what to do now to put company in position to
perform better later
Strategy - Answer- action plan for outperforming competitors and achieving superior
profitability
