Chapter 3 (Assessing the Internal Environment of the Firm)

Question 1

value chain analysis

Answer 1

a strategic analysis of an organization that uses value-creating activities

Question 2

primary activities

Answer 2

sequential activities of the value chain that refer to the physical creation of the product or service; its sale and transfer to the buyer, and its service after sale, including inbound logistics, operations, outbound logistics, marketing and sales, and service

Question 3

support activities

Answer 3

activities of the value chain that either add value by themselves or add value through important relationships with both primary activities and other support activities; including procurement, technology development, human resource management, and general administration

Question 4

inbound logistics

Answer 4

receiving, storing, and distributing inputs of a product

Question 5

operations

Answer 5

all activities associated with transforming inputs into the final product form

Question 6

outbound logistics

Answer 6

collecting, storing, and distributing the product or service to buyers

Question 7

marketing and sales

Answer 7

activities associated with purchases of products and services by end users and the inducements used to get them to make purchases

Question 8

service

Answer 8

actions associated with providing service to enhance or maintain the value of the product

Question 9

procurement

Answer 9

the function of purchasing inputs used in the firm’s value chain, including raw materials, supplies, and other consumable items as well as assets such as machinery, laboratory equipment, office equipment, and buildings

Question 10

technology development

Answer 10

activities associated with the development of new knowledge that is applied to the firm’s operations

Question 11

human resource management

Answer 11

activities involved in the recruiting, hiring, training, development and compensation of all types of personnel

Question 12

general administration

Answer 12

general management, planning, finance, accounting, legal and government affairs, quality management, and information services; activities that support the entire value chain and not individual activities

Question 13

interrelationships

Answer 13

collaborative and strategic exchange relationships between value-chain activities either (a) within firms or (b) between firms; strategic exchange relationships involve exchange of resources such as information, people, technology, or money that contribute to the success of the firm

Question 14

resource-based view (RBV) of the firm

Answer 14

perspective that firms’ competitive advantages are due to their endowment of strategic resources that are valuable, rare, costly to imitate, and costly to substitute

Question 15

tangible resources

Answer 15

organizational assets that are relatively easy to identify, including physical assets, financial resources, organizational resources, and technological resources

Question 16

intangible resources

Answer 16

organizational assets that are difficult to identify and account for and are typically embedded in unique routines and practices, including human resources, innovation resources, and reputation resources

Question 17

organizational capabilities

Answer 17

the competencies and skills that a firm employs to transform inputs into outputs

Question 18

strategic resources (film resources, organizational resources)

Answer 18

firms’ capabilities that are valuable, rare, costly to imitate, and costly to substitute

Question 19

path dependency

Answer 19

a characteristic of resources that is developed and/or accumulated through a unique series of events

Question 20

casual ambiguity

Answer 20

a characteristic of a firm’s resources that is costly to imitate because a competitor cannot determine what the resource is and/or how it can be re-created

Question 21

social complexity

Answer 21

a characteristic of a firm’s resources that is costly to imitate because the social engineering is required beyond the capability of competitors, including interpersonal relations among managers, organizational culture, and reputation with suppliers and customers

Question 22

financial ratio analysis

Answer 22

a technique for measuring the performance of a firm according to its balance sheet, income statement, and market valuation

Question 23

balanced scorecard

Answer 23

a method of evaluating a firm’s performance using performance measures from the customers’, internal, innovation and learning, and financial perspectives

Question 24

customer perspective

Answer 24

measures of firm performance that indicate how well firms are satisfying customers’ expectations

Question 25

internal business perspective

Answer 25

measures of firm performance that indicate hoe well firms’ internal processes, decisions and actions are contributing to customer satisfaction

Question 26

innovation and learning perspective

Answer 26

measures of firm performance that indicate how well firms are changing their product and service offerings to adapt to changes in the internal and external environments

Question 27

financial perspective

Answer 27

measurements of firms’ financial performance that indicate how well strategy, implementation and execution are contributing bottom-line improvement