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SPMA 3P27 - Final Exam Questions and Answers
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SPMA 3P27 - Final Exam Questions and Answers
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SPMA 3P27 - Final ExamStrategic Planning - Answer -Process of defining an organization's strategy or direction & allocating
resources to pursue this strategy.
Hambrick & Fredrickson Strategy Diamond (ESAVD) - Answer -- Economic Logic: how returns will be
obtained
- Staging: speed and sequence of moves
- Arenas: where we will be active
- Vehicles: how we will get there
- Differentiators: how we will WIN
Capital Budgeting (EIR) (CIB) - Answer -A budget for capital items:
- Equipment
- Infrastructure
- Renovation
All involved in the Capital Improvement Budget (CIB) which is distinct from the maintenance and
operating budget.
Benefits of Capital Budgeting (SAP) - Answer -- Separates high-cost 'one-time' expenditures from
operating budget
- Allows planned growth and spending
, - Provides focus
NFP vs. Corporations - Answer -- No dividends in NFP. Goal is to provide best services to stakeholder
groups.
- Yes dividends in corporation. Goal is to maximize value for shareholders.
Capital Budget Process (simplified) (ILCIC) - Answer -1. Inventory/ audit capital assets regularly
(What do we have?)
2. Link to strategic plan
(How does this mesh with strategy?)
3. Conduct a needs analysis
(What do we need?)
4. Identify gaps... replace or repair
(What shape is it in?)
5. Conduct a cost analysis
(What are we looking at $?)
Capital Investments - Projects may be: (ID) - Answer -Independent - acceptance of one is unaffected by
acceptance of another
Dependent - acceptance of one can be adversely impacted by the acceptance of another
Intro to decision-making: Choosing optimal capital budget
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