SPM 4013 PROJECT RISK MANAGEMENT
AND MITIGATION STRATEGIES STUDY
GUIDE 2026
◉ Path Dependence
Answer: - resources are scarce because they are built up due to a
unique set of events
- built over time in a way difficult to accelerate
-requires sequential investments over time
- created by "historical accident"
◉ Causal Ambiguity
Answer: - difficult to copy because competitors don't understand
how competencies work together to create a competitive advantage
- difficult to discern what the valuable resource is or how to recreate
it
- speaks to Porter's idea of "Fit"
◉ Social Complexity
Answer: - resources are based upon complex social interactions and
may depend on a specific individual
- focus on: interpersonal relationships, trust, friendship, culture
,◉ Nonsubstitutable
Answer: - competitors cannot find alternative ways of gaining the
benefit of the resource
- there is not a strategically equivalent resource
** resources can be exploited to implement the same strategies
◉ Core Competencies
Answer: Resources or capabilities that are the key drivers of
competitiveness
- capabilities that are a source of competitive advantage for a firm
◉ Test of Durability
Answer: how quickly does the resource depreciate?
◉ Test of Appropriability
Answer: who captures the value associated with the resource?
◉ Test of Competitive Superiority
Answer: whose resource is better amongst competitors?
◉ Corporate Level Strategy should create value:
, Answer: - such that the value of the corporate whole increases
- the businesses forming the corporate whole are worth more than
they would be under independent ownership
-and that equity owners cannot create themselves through portfolio
investing
◉ 2 forms of organizing transactions
Answer: - market forms/transactions
- hierarchical forms
◉ Market Forms/Transactions
Answer: - search costs
- negotiating costs
- monitoring costs
- enforcement costs
if transactions are too high, move to hierarchy
◉ Vertical Integration
Answer: A strategy when a firm moves backwards or forwards along
its supply chain
AND MITIGATION STRATEGIES STUDY
GUIDE 2026
◉ Path Dependence
Answer: - resources are scarce because they are built up due to a
unique set of events
- built over time in a way difficult to accelerate
-requires sequential investments over time
- created by "historical accident"
◉ Causal Ambiguity
Answer: - difficult to copy because competitors don't understand
how competencies work together to create a competitive advantage
- difficult to discern what the valuable resource is or how to recreate
it
- speaks to Porter's idea of "Fit"
◉ Social Complexity
Answer: - resources are based upon complex social interactions and
may depend on a specific individual
- focus on: interpersonal relationships, trust, friendship, culture
,◉ Nonsubstitutable
Answer: - competitors cannot find alternative ways of gaining the
benefit of the resource
- there is not a strategically equivalent resource
** resources can be exploited to implement the same strategies
◉ Core Competencies
Answer: Resources or capabilities that are the key drivers of
competitiveness
- capabilities that are a source of competitive advantage for a firm
◉ Test of Durability
Answer: how quickly does the resource depreciate?
◉ Test of Appropriability
Answer: who captures the value associated with the resource?
◉ Test of Competitive Superiority
Answer: whose resource is better amongst competitors?
◉ Corporate Level Strategy should create value:
, Answer: - such that the value of the corporate whole increases
- the businesses forming the corporate whole are worth more than
they would be under independent ownership
-and that equity owners cannot create themselves through portfolio
investing
◉ 2 forms of organizing transactions
Answer: - market forms/transactions
- hierarchical forms
◉ Market Forms/Transactions
Answer: - search costs
- negotiating costs
- monitoring costs
- enforcement costs
if transactions are too high, move to hierarchy
◉ Vertical Integration
Answer: A strategy when a firm moves backwards or forwards along
its supply chain
