MBA 705 Exam 1 – Advanced Business Administration Study Guide & Practice
Mission - (answer)is a broadly defined but enduring statement of purpose that identifies the scope of an
organization's operations and its offerings to the various stakeholders
Strategy - (answer)refers to top management's plans to develop and sustain competitive advantage so
that the organization's mission is fulfilled.
Competitive advantage - (answer)is a state whereby a firm's successful strategies cannot be easily
duplicated by its competitors. Maintaining a sustained competitive advantage over time can be
challenging.
sustained competitive advantage - (answer)A company's strategies enable it to maintain above-average
profitability for a number of years
Strategic Management - (answer)is of the environment in which the organization operates prior to
formulating a strategy, as well as the plan for implementation and control of the strategy.
The Strategic Management Process - (answer)1. External Analysis
2. Internal Analysis
3. Strategy Formulation
4. Strategy Implementation
5. Strategic Control
External Analysis - (answer)Analyze the opportunities and threats, or constraints, that exist in the
organization's external environment, including industry and forces in the external environment
Internal Anaylsis - (answer)Analyze the organization's strengths and weaknesses in its internal
environment. Consider the context of managerial ethics and corporate social responsibility
strategy formulation - (answer)Formulate strategies that build and sustain competitive advantage by
matching the organization's strengths and weaknesses with the environment's opportunities and
threats.
,MBA 705 Exam 1 – Advanced Business Administration Study Guide & Practice
Strategic Implementation (Execution) - (answer)Implement the strategies that have been developed.
Strategic Control - (answer)Measure success and make corrections when the strategies are not
producing the desired outcomes.
Business model - (answer)explains how the organization seeks to earn a profit by selling its goods.
Progressive firms often devise innovative business models that extract revenue - and ultimately profits -
from sources not identified by competitors.
Five Characteristics of a Successful Strategy - (answer)1. Understand the competitive environment.
2. Understand how resources translate into strengths and weaknesses.
3. The strategy is consistent with the mission and goals of the organization.
4. Plans for putting the strategy into action are designed before it is implemented.
5. Possible future changes (i.e., strategic control) are evaluated before the strategy is adopted.
Intended Strategy - (answer)what management originally plans.
may be realized just as it was planned, in a modified form, or even in an entirely different form.
Realized Strategy - (answer)what management actually implements.
Hence, the original strategy may be realized with desirable or undesirable results, or it may be modified
as changes in the firm or the environment become known.
Gap between Intended and Realized - (answer)The gap between the intended and realized strategies
usually results from unforeseen environmental or organizational events, better information that was not
available when the strategy was formulated, or an improvement in top management's ability to assess
its environment. Although it is important for managers to formulate responsible strategies based on a
, MBA 705 Exam 1 – Advanced Business Administration Study Guide & Practice
realistic and thorough assessment of the firm and its environment, things invariably change along the
way. Hence, it is common for such a gap to exist, creating the need for constant strategic action if a firm
is to stay on course. Instead of resisting modest strategic changes when new information is discovered,
managers should search for new information and be willing to make such changes when necessary. This
activity is part of strategic control —the final step in the strategic management process.
Strategy as an Art - (answer)The lack of environmental predictability and the fast pace of change render
elaborate strategy planning as suspect at best.
Strategic managers should emphasize creativity and innovation.
Strategies should be developed like a potter molds clay.
Strategy as a Science - (answer)The scientific approach is the most widely recognized view of strategy.
Strategic managers are encouraged to systematically assess the firm's external environment and
evaluate the pros and cons of myriad alternatives before formulating strategy.
The scientific approach is more prominent in this text.
Influence on Strategic Management - (answer)Industrial Organization: a branch of microeconomics,
emphasizes the influence of the industry environment on the firm.
Resource-based theory:views performance primarily as a function of a firm's ability to utilize its
resources and emphasize the development of a distinctive competence.
Contingency theory: represents a middle ground perspective that views organizational performance as
the joint outcome of environmental forces and the firm's strategic actions.
Mission - (answer)is a broadly defined but enduring statement of purpose that identifies the scope of an
organization's operations and its offerings to the various stakeholders
Strategy - (answer)refers to top management's plans to develop and sustain competitive advantage so
that the organization's mission is fulfilled.
Competitive advantage - (answer)is a state whereby a firm's successful strategies cannot be easily
duplicated by its competitors. Maintaining a sustained competitive advantage over time can be
challenging.
sustained competitive advantage - (answer)A company's strategies enable it to maintain above-average
profitability for a number of years
Strategic Management - (answer)is of the environment in which the organization operates prior to
formulating a strategy, as well as the plan for implementation and control of the strategy.
The Strategic Management Process - (answer)1. External Analysis
2. Internal Analysis
3. Strategy Formulation
4. Strategy Implementation
5. Strategic Control
External Analysis - (answer)Analyze the opportunities and threats, or constraints, that exist in the
organization's external environment, including industry and forces in the external environment
Internal Anaylsis - (answer)Analyze the organization's strengths and weaknesses in its internal
environment. Consider the context of managerial ethics and corporate social responsibility
strategy formulation - (answer)Formulate strategies that build and sustain competitive advantage by
matching the organization's strengths and weaknesses with the environment's opportunities and
threats.
,MBA 705 Exam 1 – Advanced Business Administration Study Guide & Practice
Strategic Implementation (Execution) - (answer)Implement the strategies that have been developed.
Strategic Control - (answer)Measure success and make corrections when the strategies are not
producing the desired outcomes.
Business model - (answer)explains how the organization seeks to earn a profit by selling its goods.
Progressive firms often devise innovative business models that extract revenue - and ultimately profits -
from sources not identified by competitors.
Five Characteristics of a Successful Strategy - (answer)1. Understand the competitive environment.
2. Understand how resources translate into strengths and weaknesses.
3. The strategy is consistent with the mission and goals of the organization.
4. Plans for putting the strategy into action are designed before it is implemented.
5. Possible future changes (i.e., strategic control) are evaluated before the strategy is adopted.
Intended Strategy - (answer)what management originally plans.
may be realized just as it was planned, in a modified form, or even in an entirely different form.
Realized Strategy - (answer)what management actually implements.
Hence, the original strategy may be realized with desirable or undesirable results, or it may be modified
as changes in the firm or the environment become known.
Gap between Intended and Realized - (answer)The gap between the intended and realized strategies
usually results from unforeseen environmental or organizational events, better information that was not
available when the strategy was formulated, or an improvement in top management's ability to assess
its environment. Although it is important for managers to formulate responsible strategies based on a
, MBA 705 Exam 1 – Advanced Business Administration Study Guide & Practice
realistic and thorough assessment of the firm and its environment, things invariably change along the
way. Hence, it is common for such a gap to exist, creating the need for constant strategic action if a firm
is to stay on course. Instead of resisting modest strategic changes when new information is discovered,
managers should search for new information and be willing to make such changes when necessary. This
activity is part of strategic control —the final step in the strategic management process.
Strategy as an Art - (answer)The lack of environmental predictability and the fast pace of change render
elaborate strategy planning as suspect at best.
Strategic managers should emphasize creativity and innovation.
Strategies should be developed like a potter molds clay.
Strategy as a Science - (answer)The scientific approach is the most widely recognized view of strategy.
Strategic managers are encouraged to systematically assess the firm's external environment and
evaluate the pros and cons of myriad alternatives before formulating strategy.
The scientific approach is more prominent in this text.
Influence on Strategic Management - (answer)Industrial Organization: a branch of microeconomics,
emphasizes the influence of the industry environment on the firm.
Resource-based theory:views performance primarily as a function of a firm's ability to utilize its
resources and emphasize the development of a distinctive competence.
Contingency theory: represents a middle ground perspective that views organizational performance as
the joint outcome of environmental forces and the firm's strategic actions.
