Mgnted32 Exam Chapter 10-15

Question 1

is meant the actual strategy that is fi nally selected to meet the objectives of
the organisation.

Answer 1

By strategy content

Question 2

is meant the process of communication and discussion amongst those contributing to and implementing the strategy.

Answer 2

By strategy process

Question 2

means whether it is in agreement with the
objectives of the organisation.

Answer 2

Consistency

Question 2

means to be appropriate for the context of the strategy of the organisation both internally
and externally.

Answer 2

Suitability

Question 3

means that the calculations and other assumptions on which
the plan is based are well-grounded and meaningful.

Answer 3

Validity

Question 3

means that the proposed strategies are capable of being carried out.

Answer 3

Feasibility

Question 4

Most worthwhile strategies are likely to carry some degree of risk.

Answer 4

business risk

Question 5

means that
the strategy does not expose the organisation to unnecessary hazards or to an unreasonable
degree of danger.

Answer 5

Risk

Question 6

types of
analysis

Answer 6

Cash flow analysis
Break-even analysis
Company borrowing requirements
Financial ratio analysis

Question 7

means that the strategy is suffi ciently appealing to those people that
the company needs to satisfy.

Answer 7

Attractiveness to stakeholders

Question 8

This is a measure of the profi tability of a strategic option.

is defi ned as the ratio of profi ts to
be earned divided by the capital invested in the new strategy.

Answer 8

Return on capital employed (ROCE)

Question 9

is the profi t before depreciation less the periodic investment in working capital
that is required to undertake the project.

Answer 9

Net cash flow

Question 10

is the time it takes to recover
the initial capital investment and is usually measured in years.

Answer 10

Payback

Question 11

is the sum of projected cash fl ows from a future strategy, after revaluing
each individual element of the cash fl ow in terms of its present worth using the cost of capital of
the organisation.

Answer 11

Discounted cash flow

Question 12

is defi ned as the point at which the total costs of undertaking the new strategy are equal
to the total revenue.

Answer 12

Break-even analysis

Question 13

evaluates projects especially in the public sector, where an element of
unquantifi ed public service beyond commercial profi t may be involved, by attempting to quantify
the broader social benefi ts of such a project.

Answer 13

Cost/benefit analysis

Question 14

proposes that strategies can be selected on the basis of their ability to cope with a particular
market or competitive environment.

Answer 14

Generic industry environments proposes

Question 15

three key factors emerge – namely:

Answer 15

quality
market share and marketing spend
and capital investment.

Question 16

means the circumstances surrounding and explaining the way that strategy operates
and develops.

Answer 16

Context

Question 17

regard the survival of the fittest in the competitive market place
as being the prime determinant of strategy.

Answer 17

Survival-based theories of strategy

Question 18

explores the links and degree of co-operation present
in related organisations and industries and places a value upon that degree of co-operation.

Answer 18

The network-based strategic route forward

Question 18

There
are two major aspects of networks from a strategy perspective covered in this section:

Answer 18

Network externalities
Network co-operation

Question 18

regard a prescriptive, defi ned strategy as being impossible
to develop because the strategic process is unpredictable, unstable and liable to chaotic outcomes.

Answer 18

Uncertainty-based theories of strategy

Question 19

emphasises learning and crafting as aspects of the
development of successful strategic management. It places particular importance on trial and feedback mechanisms

Answer 19

The learning-based strategic route forward

Question 20

arise when an organisation is part of an external network that is seeking to standardise some aspect of operations across an industry. refer to the development of an overall standard for a network that allows those belonging to the network to benefi t increasingly as others join the same network.

Answer 20

Network externalities

Question 21

arises when companies engage in formal and informal agreements with each other for their mutual benefi t. refers to the value-adding relationships that organisations develop inside their own organisation and outside it with other organisations.

Answer 21

Network co-operation

Question 22

understanding changes outside in the environment and adapting to these;

Answer 22

adaptive learning

Question 22

consists of a fi rst loop of learning that checks performance against expected norms and adjusts where necessary, coupled with a second loop that reappraises whether the expected norms were appropriate in the fi rst place.

Answer 22

double-loop learning

Question 23

creating and exploring new strategy areas for positive expansion within the organisation itself .

Answer 23

generative learning

Question 24

are informal rules-of-thumb that provide simple decision rules to capture and summarise what has been learnt by one part of the organisation and then communicate this to other parts of the organisation.

Answer 24

Heuristics

Question 25

is the matching process between strategy and structure.

Answer 25

Strategic fi t

Question 25

is ‘the way in which managers conceptualise the business and make critical resource allocation decisions’.

Answer 25

Dominant logic

Question 26

consists of the owner/proprietor and the immediate small team surrounding that person.

Answer 26

Small organisation structure

Question 27

is based on locating the structure around the main activities that have to be undertaken by the organisation, such as production, marketing, human resources, research and development, fi nance and accounting.

Answer 27

Functional organisation structure

Question 28

is structured around separate divisions formed on the basis of products, markets or geographical areas.

Answer 28

Multidivisional structure

Question 29

is a company that owns various individual businesses and acts as an investment company with shareholdings in each of the individual enterprises.

Answer 29

Holding or corporate company structure

Question 30

is a combination of two forms of organisation – such as product and geographical structures – that operate jointly on all major decisions.

Answer 30

Matrix organisation structure

Question 31

are characterised by their creativity, lack of formal reporting relationships and informality.

Answer 31

Innovative organisation structures

Question 32

are the structured benefi ts paid to individuals and groups who have delivered strategies that add value to the organisation consistent with its agreed purpose.

Answer 32

Reward systems

Question 33

uses strategic and fi nancial measures to assess the outcome of a chosen strategy. It acknowledges the diff erent expectations of the various stakeholders and it attempts to use a ‘scorecard’ based on four prime areas of business activity to measure the results of the selected strategy.

Answer 33

THE BALANCED SCORECARD

Question 34

is a formal planning system for the development and implementation of the strategies related to the mission and objectives of the organisation.

Answer 34

Prescriptive strategic planning

Question 35

concerns those activities of the organisation that are focused on both sustaining the earth’s environment and developing the business opportunities that will arise from such additional activities. Sustainability is the underpinning principle.

Answer 35

Green strategy

Question 36

seeks out ways of reducing energy, lowering carbon content and adopting recycling policies, not only within the organisation but also with suppliers and customers. In addition, the green strategy value chain will involve every element and function, including those that perhaps do not always feature highly in many value chain analyses.

Answer 36

The green strategy value chain

Question 37

is the proactive management of change in organisations to achieve clearly identifi ed strategic objectives.

Answer 37

Strategic change

Question 38

is the ability to shape the organisation’s decisions and deliver high value over time, not only personally but also by inspiring and managing others in the organisation.

Answer 38

Strategic leadership

Question 39

is the art or process of infl uencing people so that they will strive willingly and enthusiastically towards the achievement of the organisation’s purpose involves balancing a number of factors relating to strategy.

Answer 39

Leadership

Question 40

that individuals with certain characteristics (traits) can be identifi ed who will provide leadership in virtually any situation.

Answer 40

Trait theories

Question 41

suggest that individuals can be identifi ed who possess a general style of leadership that is appropriate to the organisation.

Answer 41

Style theories

Question 42

explore the concept that leaders should be promoted or recruited according to the needs of the organisation at a particular point in time. The choice is contingent on the strategic issues facing the organisation at that time and leaders need to be changed as the situation itself changes.

Answer 42

Contingency theories

Question 43

is therefore concerned with the exercise of authority, leadership and management in organisations.

Answer 43

Power

Question 44

are the skills, talents and knowledge of every member of the organisation.

Answer 44

Human resources

Question 45

can have a profound infl uence on mission and objectives. They may be particularly important in moving the organisation forward to new challenges. However, in large and complex organisations their role is more likely to be evolutionary than revolutionary.

Answer 45

Leaders