5TH YEAR BSA

MANAGEMENT 4
MIDTERM EXAMINATION

ANSWER SHEET

I. IDENTIFICATION
1. Mintzberge 4 Most Typical Approaches and Modes
 ENTREPRENEURIAL MODE
 ADAPTIVE MODE
 PLANNING MODE
 LOGICAL MODE
2. MONOPOLY -a market structure characterized by the existence of a single seller of a product
which dominates the market.

3. Institution Theory -This theory holds that organizations can adapt to changing environment and
use knowledge offensively to improve the fit between the organization and its environment.

II. EXPLAIN
1. Evolution and Revolution Theory
This theory suggested that for a business undertaking to be an ongoing and profitable endeavor,
it has to adapt itself to market change otherwise it will go bankrupt and fold up. This changes
may be Incremental and Transformational change.
Incremental or Evolutionary change of an organization is a normal progression (slow, gradual
change) where both the organization and its people attain a higher level of consciousness. It’s
about decentralized and participative decision making and the realization that all people-
regardless of position- have an important, valuable role to play. Though in efforts to stay ahead
of the curve and reach evolution, outstanding organizations often pursue revolutionary change,
where revolutionary or transformational change is profound. Organizations tends to reshapes
and realigns strategic goals and often leads to radical breakthroughs in belief and behaviors.

2. INDUSTRIAL ORGANIZATION THEORY

The industrial organization view of strategy assumes that the external environment determines
the actions a firm can deploy. The implication of this model for strategic management is that
firms identify and seek to operate in environments that provide the best opportunities for
competitiveness and profitability. The main concerns of this model are the four industry
structures of perfect competition, monopoly, monopolistic competition, and oligopoly. The
strategic conduct of the firm revolves around policies (such as maximization or optimization of
profit levels, growth, sales, and marginal utility), pricing objectives (e.g., cost-plus, marginal cost,
entry-deterring price, collusive pricing, price leadership, and price discrimination), marketing
strategies and advertising, and the extent of innovation and technical change. When measuring
performance, strategists and economists focus on profitability, efficiency, product quality, and
technical progress. The limitations of this model arise from the occurrence of the four
underlying assumptions of the theory regarding the effects of the environment of strategy, the

MANAGEMENT 4
MIDTERM EXAMINATION
5TH YEAR BSA

homogeneity of resources, capabilities, and strategic intent. The assumptions of this theory have
been challenged by the opposing view of strategy, the resource-based view of the firm.

3. CONTINGENCY THEORY
Contingency Theory is a unique approach to leadership. The basic premise of Contingency
Theory is that there is no one best way to lead an organization. There are too many external and
internal constraints that will alter what really is the best way to lead is in a given situation. In
other words, it all depends upon the situation at hand as to what will be the best course of
action.
Fiedler's Contingency Theory proposes the following concepts:

 Fiedler's Contingency Theory says there is no one best way to manage an organization.

 Fiedler's Contingency Theory of leadership says that a leader must be able to identify
which management style will help. achieve the organization's goals in a particular
situation

 The main component of Fiedler's Contingency Theory is the least preferred co-worker

(LPC) scale which measures a manager's leadership orientation.

4. ROLE OF STAKEHOLDER GROUPS IN BUSINESS COMPETITION

Stakeholders (also known as publics) are groups such as community residents, media
representatives, stockholders, financial analysts and others who have an interest in or some
influence on marketing performance. Obviously, customers, employees, managers, suppliers,
government regulators and others can directly influence a business and its performance,
meaning they're particularly important stakeholders. So why consider competitors as
stakeholders? Because every company can, directly or indirectly, affect the performance of its
competitors. Often a marketing plan is designed to capture market share from a particular rival
or reinforce customer loyalty in the face of competition from a new up-and-comer. Doesn't that
make you a stakeholder in your competitors' performance (and your competitors stakeholders
in your performance)?

MANAGEMENT 4
MIDTERM EXAMINATION