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Possible Midterm Questions

1. What are the elements of each of PEST factors? Give an example for each one that
represents a threat or opportunity?
Answer: Political environment: Carbon tax, threat to industries with high carbon
NAFTA: opportunities for exporters/importers
Economic: inflation, opportunities for borrower, threat for lenders
Depreciation, opportunity for exporters, threat to importers
Social: sustainability value, threat to companies with high pollution, opportunity to
renewable energy
Technological: internet, opportunity to online sellers
2. How does strategy affect management preference?
Answer: Strategy is the plan the organization has put in place to pursue opportunity or
avoid threats. Managerial preference is the mission, vision and bias of the management.
preference needs to be consistent with strategy. Strategy can also have an impact on future
managerial choices.
3. If a company were to encourage creative and innovative thinking, how would that
directly affect three other Key Success Factors?
Answer: Encourage innovation thinking means encouraging new ideas and thoughts.
This creates an engaging atmosphere for employees to work, so it helps gain employee
commitment. Encouraging innovation and creativity can help the company better
understand and fulfill the needs and wants of customers, so it can help meet customer
needs. Innovative thinking can bring the company unique competitive advantages that
are hard to imitate, thus, it creates distinct competitive advantages for the company.