Integrated Business Topics
Week Two Quiz
The following quiz is comprised of two short essay questions worth 5 points each. Please use the assigned text to answer these questions. In all cases, the material found in the assigned text will govern. In other words, answers found from other sources might be “right,” but your quiz will be graded based on the material in the assigned text. Paraphrase the material from the text. Do not cut and paste. These are essay questions, not essays. Do not write a paper. Just answer the questions in as clear and concise a manner as possible.
(1) Define strategic management. Identify any five of the nine critical tasks of strategic management? Strategic management is the process by which the management team determines a firm’s goals. It is achieved by examining internal and external strengths, weaknesses, threats and opportunities. The critical tasks of strategic management consist of:
1.) Creating a mission and vision statement
2.) Analyzing the business’s capabilities, i.e. strengths and weaknesses 3.) Formulating a plan based on this analysis, both short term and long term 4.) Implementing the pathway plan chosen
5.) Evaluating the effectiveness of the plan and making adaptations as needed
(2) Define agency theory. Explain how agency problems occur. (Do not attempt to answer this question before carefully reading pages 39-42 of the assigned text.) The agency theory is defined as the relationship between a person that has employed another person to carry out his, or her plans, or wants. This may be a relationship between hands off owners and top management, or between managers and other employees that have been designated to complete a task by that manager. As long as the person placed in charge has a personal reason to follow the plan, such as stock options, he or she will not consider following a plan devised to benefit his or her personal gain.