All of the following are examples of important tradeoffs during goal formulation EXCEPT

Strategic Management: Concepts and Cases, 13e (David)

Chapter 1 The Nature of Strategic Management

1) Strategic management focuses on integrating management, marketing, finance/accounting,

production/operations, research and development, and information systems to achieve

organizational success.

Answer: TRUE

2) Optimizing for tomorrow the trends of today is the purpose of strategic management.

Answer: FALSE

3) Even though useful, strategic planning has been cast aside by corporate America since the

early 1990s.

Answer: FALSE

4) Resource allocation is included in strategy-formulation activities.

Answer: TRUE

5) The terms strategic management and strategic planning are synonymous in this text.

Answer: TRUE

6) A vision statement is, in essence, a company's game plan.

Answer: FALSE

7) Strategy implementation is often considered to be the most difficult stage in the strategic-

management process because it requires personal discipline, commitment, and sacrifice.

Answer: TRUE

8) The final stage in strategic management is strategy implementation.

Answer: FALSE

9) Strategy formulation, implementation and evaluation activities occur at three hierarchical

levels in a large diversified organization: corporate, divisional and functional.

Answer: TRUE

10) One of the fundamental strategy evaluation activities is reviewing external and internal

factors that are the bases for current strategies.

Answer: TRUE

11) An objective, logical, systematic approach for making major decisions in an organization is a

way to describe the strategic-management process.

Answer: TRUE

12) Strategic management is an attempt to organize qualitative and quantitative information in a

way that allows effective decisions to be made under conditions of uncertainty.

Answer: TRUE

1. 1. __________ refers to operating in a successful way that is difficult for competitors to imitate.
   
   
   
   
   

   A. Competitive advantage

2. 2. Which of the following statements is FALSE?
   
   
   
   
   

   C. The ultimate goal of any organisation is to achieve competitive advantage.

3. 3. __________ is an action focus that links an organisation to its environment.
   
   
   
   
   

   B. Strategy

4. 4. __________ refers to an organisation's focusing all its energies on a unifying and compelling target.
   
   
   
   
   

   E. Strategic intent

5. 5. A __________ is a plan for using resources consistent with __________.
   
   
   
   
   

   C. strategy strategic intent

6. 6. Customers and flexibility increasingly drive __________ in contemporary businesses.
   
   
   
   
   

   C. strategy

7. 7. The essence of __________ is looking ahead, understanding the environment and the organisation, and effectively positioning the organisation for competitive advantage.
   
   
   
   
   

   C. strategic management

8. 8. According to Harvard scholar Michael Porter, the ultimate goal for any business should be
   
   
   
   
   

   C. superior profitability.

9. 9. _________ are those returns that exceed what an investor could earn by investing in alternative opportunities of equivalent risk.
   
   
   
   
   

   B. Above-average returns

10. 10. Which one of the following statements does NOT provide an accurate description of the monopoly environment?
    
    
    
    
    

    B. Alternatives A, B and C provide accurate descriptions of the monopoly environment.

11. 11. Oil companies such as Shell, BP and Mobil can be considered to operate in a(n)
    
    
    
    
    

    D. oligopoly environment.

12. 12. The __________ is an environment that contains a few players who do not directly compete against one another.
    
    
    
    
    

    C. oligopoly environment

13. 13. An oligopoly environment can be described as an environment
    
    
    
    
    

    D. All of the above

14. 14. The environment in which there are at least several players who directly compete with one another is known as a(n)
    
    
    
    
    

    B. hypercompetition environment.

15. 15. Which of the following statements does NOT characterise the environment of hypercompetition?
    
    
    
    
    

    D. Any competitive advantage that is realised in hypercompetition is relatively permanent.

16. 16. Which of the following statements about the competitive nature of organisational environments is CORRECT?
    
    
    
    
    

    C. The hypercompetition environment has at least several key players who compete directly with each other.

17. 17. Successful strategic management occurs when organisations formulate and implement strategies that
    
    
    
    
    

    A. achieve long-term, sustainable competitive advantage.

18. 18. The major responsibilities of the strategic management process are
    
    
    
    
    

    D. a and b above

19. 19. As part of the strategic management process, strategy formulation involves
    
    
    
    
    

    D. All of the above

20. 20. Peter Drucker indicates that managers should ask five questions in the process of formulating an organisation's strategy. Which of the following is NOT one of these questions?
    
    
    
    
    

    D. Who are our competitors?

21. 21. __________ is the process of allocating resources and putting strategies into action.
    
    
    
    
    

    E. Strategy implementation

22. 22. Strategy implementation includes
    
    
    
    
    

    D. All of the above

23. 23. The __________ responsibility of strategic management requires decisions, imposes risks, demands allocation of resources and requires work.
    
    
    
    
    

    A. strategy implementation

24. 24. The __________ begins with a careful assessment and clarification of organisational mission, values and objectives.
    
    
    
    
    

    E. strategic management process

25. 25. Important strategic management tasks include all of the following EXCEPT
    
    
    
    
    

    C. providing visionary and inspirational leadership.

26. 26. In evaluating the success of strategic management, certain crucial questions need to be asked and answered. Which of the following is NOT one of these crucial questions?
    
    
    
    
    

    A. How well did we do in the past?

27. 27. The mission of an organisation describes its
    
    
    
    
    

    C. basic purpose.

28. 28. Michael Hammer recommends that an organisation's mission statement should address certain questions, including which of the following?
    
    
    
    
    

    D. All of the above.

29. 29. A good mission statement should incorporate all of the following elements EXCEPT
    
    
    
    
    

    D. the nature of the competitive environment.

30. 30. As part of the strategic planning process, a __________ is concerned with assessing the interests of each group of stakeholders as well as the organisation's record in responding to them.
    
    
    
    
    

    A. strategic constituencies analysis

31. 31. Organisational culture accomplishes all of the following EXCEPT
    
    
    
    
    

    D. it determines the strategy to be pursued.

32. 32. Which of the following statements accurately describes the benefits associated with strong core values?
    
    
    
    
    

    D. All of the above.

33. 33. __________ direct activities towards key and specific performance results.
    
    
    
    
    

    B. Operating objectives

34. 34. __________ are shorter term targets against which actual performance results can be measured.
    
    
    
    
    

    A. Operating objectives

35. 35. According to Peter Drucker, the common operating objectives for organisations might include all of the following EXCEPT
    
    
    
    
    

    A. developing a strong culture to effectively mould employees' behaviour.

36. 36. Widgets-R-Us manufactures a range of industrial fittings. Operating objectives for the company might include all of the following EXCEPT
    
    
    
    
    

    C. designing an adaptive organisation.

37. 37. The common operating objectives for organisations might include all of the following EXCEPT
    
    
    
    
    

    B. designing an adaptive organisation.

38. 38. A(n) ____________ involves an assessment of organisational strengths and weaknesses as well as environmental opportunities and threats.
    
    
    
    
    

    D. SWOT analysis

39. 39. In evaluating the organisational resources and capabilities, a major goal is to identify
    a. core competencies.
    b. operating objectives.
    c. strategic objectives.
    d. important external stakeholders.
    e. potential investors.

    0

40. 40. __________ refer to special strengths that the organisation has or things the organisation does well in comparison with competitors.
    
    
    
    
    

    C. Core competencies

41. 41. Core competencies can be found in an organisation's special strengths. Which of the following would NOT be one of these special organisational strengths?
    
    
    
    
    

    C. Favourable governmental regulations

42. 42. In conducting a SWOT analysis, the examination of organisational strengths should consider all of the following factors EXCEPT
    
    
    
    
    

    B. manufacturing bottlenecks.

43. 43. In doing a SWOT analysis, the examination of organisational weaknesses should consider all of the following factors EXCEPT
    
    
    
    
    

    B. past planning successes.

44. 44. In conducting a SWOT analysis, issues regarding outdated facilities, inadequate research and development, obsolete technologies, weak management and past planning failures would be addressed in analysing the company's
    
    
    
    
    

    A. weaknesses.

45. 45. Potential opportunities and threats can be in identified in __________ and __________.
    
    
    
    
    

    D. the macro-environment … the industry environment

46. 46. In a SWOT analysis, industry environmental factors include the organisation's
    
    
    
    
    

    D. All of the above

47. 47. In conducting a SWOT analysis, a company's __________ can be examined by asking questions about possible new markets, the growth of existing markets, the emergence of new technologies and the weaknesses of market rivals.
    
    
    
    
    

    A. opportunities

48. 48. In doing a SWOT analysis, the examination of threats within the industry and macroenvironments should address all of the following elements EXCEPT
    
    
    
    
    

    A. abundance of resources.

49. 49. In conducting a SWOT analysis, a company's __________ should be assessed in terms of new competitors, possible resource shortages, changing market tastes, substitute products and new regulations.
    
    
    
    
    

    D. threats

50. 50. Which of the following is NOT one of the five strategic forces that should be considered in conducting an industry analysis?
    
    
    
    
    

    B. Impact of developments in information technology

51. 51. From the perspective of Porter's five forces mode, a(n) __________ is one in which intense rivalry already exists among competitors, there are substantial threats in terms of new competitors and substitute products, and suppliers and buyers are very powerful in bargaining over prices and quality.
    
    
    
    
    

    A. unattractive industry

52. 52. From the perspective of Porter's five forces mode, a(n) __________ is one with less intense competition, few threats from new entrants or substitutes and low bargaining power among suppliers and buyers.
    
    
    
    
    

    D. attractive industry

53. 53. Which of the following lists correctly identifies the different levels of strategy that can exist in a business?
    
    
    
    
    

    D. Corporate strategy, business strategy and functional strategy

54. 54. __________ focuses on the strategic question: In what industries and markets should we compete?
    
    
    
    
    

    B. Corporate strategy

55. 55. __________ answers the question: How can we best use resources to implement our business strategy?
    
    
    
    
    

    E. Functional strategy

56. 56. A __________ strategy involves growth through expansion within the same business area.
    
    
    
    
    

    C. concentration

57. 57. A __________ strategy involves growth through the acquisition of, or investment in, new and sometimes different business areas.
    
    
    
    
    

    B. diversification

58. 58. __________ involves growth by acquiring new businesses or entering business areas that are related to what the organisation already does.
    
    
    
    
    

    A. Related diversification

59. 59. __________ involves growth by acquiring new businesses or entering business areas that are different from what the organisation already does.
    
    
    
    
    

    E. Unrelated diversification

60. 60. Diversification through __________ occurs when a business seeks added value creation by acquiring suppliers or distributors.
    
    
    
    
    

    E. vertical integration

61. 61. A __________ is used where changes in the scale and/or mix of operations are implemented in order to gain efficiency and improve performance.
    
    
    
    
    

    A. restructuring strategy

62. 62. Which description of retrenchment is INCORRECT?
    
    
    
    
    

    A. Backward integration involves implementing changes in the scale and/or mix of operations in order to gain efficiency and improve performance.

63. 63. __________ occur(s) when two or more organisations join together in partnership to pursue an area of mutual interest.
    a. Vertical integration
    b. Horizontal integration
    *c. Strategic alliances
    d. Strategic contracts
    e. Organisational collusion

    0

64. 64. Strategic alliances include which of the following possibilities?
    
    
    
    
    

    D. All of the above.

65. 65. A(n) __________ is the strategic use of the Internet to gain competitive advantage.
    
    
    
    
    

    B. e-business strategy

66. 66. __________ involve the use of information technology and the Internet to link organisations vertically with members of their supply chains.
    
    
    
    
    

    B. B2B strategies

67. 67. The major opportunities for developing competitive advantage have traditionally included all of the following EXCEPT
    
    
    
    
    

    A. social progress.

68. 68. Which one of the following statements does NOT accurately describe an aspect of Michael Porter's generic strategies model?
    
    
    
    
    

    B. Porter's generic strategies include stars, cash cows, dogs and question marks.

69. 69. Michael Porter's generic strategies model identifies four fundamental strategies. Which of the following correctly describes these strategies?
    
    
    
    
    

    C. Differentiation, cost leadership, focused differentiation and focused cost leadership

70. 70. Organisations pursuing a __________ seek a competitive advantage by directing the organisation's resources and attention towards distinguishing its products from those of the competition.
    
    
    
    
    

    B. differentiation strategy

71. 71. Organisations pursuing a __________ seek a competitive advantage by concentrating on one special market segment and trying to offer customers in that segment a unique product.
    
    
    
    
    

    A. focused differentiation strategy

72. 72. Organisations pursuing a __________ seek a competitive advantage by directing the organisation's resources and attention towards minimising costs to operate more efficiently than the competition.
    
    
    
    
    

    A. cost leadership strategy

73. 73. Understanding product life cycles and __________ is an important business skill.
    
    
    
    
    

    B. adjusting strategy accordingly

74. 74. ABC Industries has recently launched a new product. Which of the following strategies would be most appropriate at this stage of ABC's life cycle?
    
    
    
    
    

    A. Significant investment in advertising and market research.

75. 75. Which of the following statements provides an accurate description of the strategies that should be used at different stages of the product life cycle?
    
    
    
    
    

    A. Products in the introduction and growth stages lend themselves to differentiation and prospector strategies, and require investments in advertising and market research to establish a market presence and build a customer base.

76. 76. Which statement accurately describes the goal of portfolio planning?
    
    
    
    
    

    C. To help managers strategically invest scarce organisational resources among competing business opportunities

77. 77. The BCG portfolio planning model uses an analysis of __________ and __________ to identify business opportunities and appropriate business strategies.
    
    
    
    
    

    D. market growth rate … market share

78. 78. In the BCG matrix, a 'star' refers to an organisation or subunit that has
    
    
    
    
    

    E. a high market share in a high-growth market.

79. 79. A 'cash cow', as the term is used by the Boston Consulting Group, refers to an organisation or subunit that has
    
    
    
    
    

    C. a high market share in a low-growth market.

80. 80. According to the BCG matrix, a 'question mark' refers to an organisation or subunit that has
    
    
    
    
    

    D. a low market share in a high-growth market.

81. 81. The __________ is an alternative portfolio planning approach that uses the planning dimensions of business strength and industry attractiveness.
    
    
    
    
    

    D. GE Business Screen

82. 82. Which of the following statements does NOT accurately describe the GE Business Screen?
    
    
    
    
    

    E. Combining the business strength and industry attractiveness variables yields a nine-cell matrix that identifies business units as 'stars', 'question marks', 'cash cows' or 'dogs'.

83. 83. The Miles and Snow adaptive model emphasises that organisations should pursue strategies that
    
    
    
    
    

    C. are congruent with the nature of their external environments.

84. 84. An organisation is following a(n) __________ strategy when it avoids change by emphasising existing products and current market share without seeking growth.
    
    
    
    
    

    D. defender

85. 85. An organisation is following a(n) __________ strategy when it pursues innovation and new opportunities in the face of risk and with prospects for growth.
    
    
    
    
    

    E. prospector

86. 86. An organisation is following a(n) __________ strategy when it simply responds to competitive pressures in order to survive.
    
    
    
    
    

    B. reactor

87. 87. __________ is the view that strategies take shape, change and develop over time as modest and gradual adjustments result from managers' learning and experience.
    
    
    
    
    

    E. Suboptimisation

88. 88. __________ develop(s) progressively over time as managers make 'streams' of decisions while they learn from and respond to work situations.
    
    
    
    
    

    C. Emergent strategies

89. 89. Current issues in the proper implementation of strategy include
    
    
    
    
    

    D. All of the above

90. 90. Successful strategies share several essential features. Which of the following is NOT one of these essential features?
    
    
    
    
    

    A. Every strategy requires leaders who are willing to take extraordinary risks on behalf of the organisation.

91. 91. Paying inadequate attention to the analysis of mission and purpose, core values and corporate culture, organisational strengths and weaknesses, and environmental opportunities and threats constitutes a strategic planning pitfall known as
    
    
    
    
    

    C. failures of substance.

92. 92. Senior managers at ACME Corportation do not currently have a formal role in company strategic planning . Instead they rely on the planning department to perform all strategic planning tasks. This is a
    
    
    
    
    

    A. failures of process.

93. 93. Poor handling of the ways in which various aspects of strategic planning are accomplished constitute a strategic planning pitfall known as
    
    
    
    
    

    B. failures of process.

94. 94. Today's organisations are experiencing new pressures from boards of directors and other major stakeholder representatives. The pressures from these groups focus on
    
    
    
    
    

    E. corporate governance.

95. 95. __________ is the system of control and performance monitoring of top management that is maintained by boards of directors and other major stakeholder representatives.
    
    
    
    
    

    E. Corporate governance

96. 96. In corporate governance, controversies often arise over the roles of ________ and ________.
    
    
    
    
    

    D. inside directors … outside directors

97. 97. __________ refers to a leader's capability to enthuse people to successfully engage in a process of continuous change, refinement and implementation of organisational strategies.
    
    
    
    
    

    C. Strategic leadership

98. 98. Which of the following is not one of the critical tasks of strategic leadership?
    
    
    
    
    

    C. Be a teacher by conveying the strategy and making it a cause.