Deck 1: Strategic Management: Creating Competitive Advantages

Question 1

As firms work to become more efficient and effective in the global business environment, they are forced to continually innovate. Innovation in an organization

A) will always increase a firm's performance.
B) may enhance or destroy a firm's capabilities.
C) should not be pursued by industry leaders.
D) happens only incrementally.

Answer 1

B

Question 2

As our world increases in complexity, the global environment is increasingly competitive and challenging. The key to effective globalization is

A) managing the flow of goods.
B) more people speaking more languages.
C) managing the flow of capital, people, and information.
D) governmental regulations.

Answer 2

C

Question 3

According to the text, the "triple bottom line" approach to corporate accounting includes which three components

A) financial, environmental, and customer.
B) financial, organizational, and customer.
C) financial, environmental, and social.
D) financial, organizational, and psychological.

Answer 3

C

Question 4

Peter Senge, of MIT recognized three types of leaders. _____ are individuals that, although having little positional power and formal authority, generate their power through the conviction and clarity of their ideas.

A) Local line leaders
B) Executive leaders
C) Internal networkers
D) Shop floor leaders

Question 5

In terms of strategy analysis, the textbook describes Roth, CEO of Nortel, as having

A) set low targets.
B) ignored the experiences of competitors and set unrealistically high growth targets.
C) focused on the economic landscape.
D) all of these are correct

Question 6

Sears has developed a sophisticated quantitative model and found that there were positive relationships between employee satisfaction, customer satisfaction, and financial results. According to the text, this is an example of

A) zero-sum relationship among stakeholders.
B) stakeholder symbiosis.
C) rewarding stakeholders.
D) emphasizing financial returns.

Question 7

Stakeholders are

A) a new way to describe shareholders.
B) individuals, groups, and organizations who have a stake in the success of the organization.
C) creditors who hold a lien on the assets of the organization.
D) attorneys and their clients who sue the organization.

Question 8

Operational effectiveness includes all except

A) benchmarking.
B) performing different activities than rivals.
C) business process re-engineering.
D) just-in-time.

Question 9

While working to prioritize and fulfill their responsibilities, members of an organization's board of directors should

A) represent their own interests.
B) represent the interests of the shareholders.
C) direct all actions of the CEO.
D) emphasize the importance of short-term goals.

Question 10

Firms must be aware of goals other than short-term profit maximization. One area of concern should be social responsibility which is

A) the expectation that business will strive to improve the overall welfare of society.
B) the idea that organizations are solely responsible to local citizens.
C) the fact that court costs could impact the financial bottom line.
D) the idea that businesses are responsible to maintain a healthy social climate for their employees.

Question 11

The text argues that a strategic perspective in an organization should be emphasized

A) at the top of the organization.
B) at the middle of the organization.
C) throughout the organization.
D) from the bottom up.

Question 12

In order to increase their competitiveness, organizations must continually analyze their strategy and their competitive environments. Strategy analysis includes

A) assessing intellectual capital as well as analyzing the internal and external environment.
B) formulating Internet and international-level strategy.
C) strategic leadership and fostering entrepreneurship.
D) strategy implementation and strategic controls.

Question 13

Firms must be concerned with many types of capital. In the broader sense, these could include

A) employee goals.
B) organizational vision.
C) mission statements.
D) ecological, material, and social.

Question 14

Many organizations have a large number of functional areas with very diverse, and sometimes competing, interests. Such organizations will be most effective if

A) each functional area focuses on achieving their own goals.
B) functional areas work together to attain overall goals.
C) goals are defined at the bottom and implemented at the top.
D) management and employees have separate goals.

Question 15

Managers should do more than just focus on short-term financial performance. One concept that helps managers do this is stakeholder symbiosis. This means that

A) stakeholders are dependent on each other for their success.
B) stakeholders look out for their individual interests.
C) one can only gain at the expense of someone else.
D) all stakeholders want to maximize shareholder returns.

Question 16

The four key attributes of strategic management include the idea that a

A) strategy must be directed toward overall organizational goals and objectives.
B) strategy must be focused on long-term objectives.
C) strategy must be focused on one specific area of an organization.
D) strategy must focus on competitor strengths.

Question 17

According to Henry Mintzberg, the realized strategies of a firm

A) are a combination of deliberate and emergent strategies.
B) are a combination of deliberate and differentiation strategies.
C) must be based on a company's strategic plan.
D) must be kept confidential for competitive reasons.

Question 18

An organization is responsible to many different entities. In order to meet the demands of these groups, organizations must participate in stakeholder management. Stakeholder management means that

A) interests of the shareholders are not the only interests that matter.
B) stakeholders are second in importance to the shareholders.
C) stakeholders and managers inevitably work at cross-purposes.
D) all stakeholders receive financial rewards.

Question 19

The four key attributes of strategic management include all of the following except

A) including multiple stakeholder interests in decision making.
B) incorporating both short-term and long-term perspectives.
C) recognizing the trade-offs between effectiveness and efficiency.
D) emphasis on the attainment of short-term objectives.

Question 20

Members of boards of directors are

A) appointed by the Securities and Exchange Commission.
B) elected by the shareholders as their representatives.
C) elected by the public.
D) only allowed to serve one term of four years.

Question 21

Strategic management consists of the analysis, decisions, and actions an organization undertakes in order to create and sustain competitive advantages.

Question 22

Leadership is a necessary (but not sufficient) condition for organizational success. Leaders should emerge at which level(s) of an organization?

A) Only at the top
B) In the middle
C) Throughout the organization
D) Only during times of change

Question 23

Strategic management includes strategy analysis, strategy formulation, and strategy implementation.

Question 24

Decisions by boards of directors are always consistent with shareholder interests.

Question 25

The hierarchy of organizational goals is in this order (least specific to most specific)

A) vision statements, strategic objectives, and mission statements.
B) mission statements, strategic objectives, and vision statements.
C) vision statements, mission statements, and strategic objectives.
D) mission statements, vision statements, and strategic objectives.

Question 26

Sears has developed a sophisticated quantitative model that can predict the relationship between employee satisfaction, customer satisfaction, and financial results. This is an example of a symbiotic approach to strategic management.

Question 27

Effective vision statements include

A) all strategic directions of the organization.
B) a brief statement of the company's direction.
C) strategic posturing and future objectives.
D) financial objectives and projected figures.

Question 28

The strategic management process should be addressed only by top-level executives. Mid-level and low-level employees are best equipped to implement the organization's strategies.

Question 29

Symbiosis is the ability to recognize interdependencies among the interests of multiple stakeholders within and outside an organization.

Question 30

Shareholders in a company are the only individuals with an interest in the financial performance in the company.

Question 31

According to the text, formulating strategy includes taking into consideration strategy at the business, international, digital, and corporate levels.

Question 32

In contrast to an organization's vision, its mission should

A) be shorter in length.
B) encompass both the purpose of the company as well as the basis of competition.
C) encompass all the major rules and regulations of the corporate work force.
D) be less detailed.

Question 33

Shareholders, employees, and the community at large are among a firm's stakeholders.

Question 34

Wellpoint Health Networks states: "Wellpoint will redefine our industry: through a new generation of consumer-friendly products that put individuals back in control of their future." This is an example of a

A) strategic objective.
B) vision statement.
C) vague statement of direction.
D) line manager's individual goal.

Question 35

Social responsibility for Suncor Energy of Calgary means accountability to customers but NOT to employees.

Question 36

Examples of _____ include "To be the happiest place on earth" (Disney), and "Restoring patients to full life" (Medtronics).

A) vision statements
B) mission statements
C) strategic objectives
D) operational objectives

Question 37

Social responsibility is the idea that organizations are not only accountable to shareholders but also to the community at large.

Question 38

Which "organizational vision" did the text credit belonging to BCE Bell Canada Enterprises?

A) "Restoring patients to full life."
B) "Providing Canadians with a one-stop destination in meeting their needs."
C) "Clear, Simple, First, True, Profitable, Proud."
D) "The world's best quick service restaurant."

Question 39

Fortune Brands states they will "cut corporate costs by $30 million a year." This is an example of a

A) nonfinancial strategic objective.
B) financial strategic objective.
C) vision statement.
D) mission statement.

Question 40

Vision statements are used to create a better understanding of the organization's overall purpose and direction. Vision statements

A) are very specific.
B) provide specific objectives.
C) set organizational structure.
D) evoke powerful and compelling mental images.

Question 41

The strategic management process includes strategy analysis, strategy formulation, and strategy implementation. Discuss each of these steps.

Question 42

Globalization is the flow of capital, people, and information throughout the world.

Question 43

Discuss what is meant by recognizing trade-off between efficiency and effectiveness and provide an example of how this attribute of strategic management could influence the strategic decisions of a firm.

Question 44

Strategic objectives should be measurable, specific, appropriate, and realistic, but not constrained by time deadlines.

Question 45

Organizational goals and objectives should be vague in order to allow for changes in strategy.

Question 46

According to the text, a mission statement is an overarching statement that is massively inspiring, long-term, and only discusses the purpose of the company.

Question 47

Objectives in organizations should be clear, stated, and known by employees throughout the organization.

Question 48

Although vision statements vary from organization to organization, vision statements are intended to motivate and inspire employees to work toward a general goal.

Question 49

Organizational vision statements are the beginning point for the hierarchy of goals throughout the organization. An organization's vision statement should be massively inspiring, overarching, and long-term.

Question 50

Globalization is impacting most firms today. Discuss what "globalization" means and how and why it impacts today's firms.

Question 51

It is important for organizations to primarily focus on financial objectives and be less concerned about other objectives and goals.

Question 52

A mission statement encompasses both the purpose of the company as well as the basis of competition and competitive advantage.

Question 53

Strategic management should only include short-term objectives. Long-term objectives are covered in the organization's vision statement.

Question 54

Intellectual capital is becoming increasingly important in today's economy. It is a concern of managers throughout organizations.

Question 55

A firm has a variety of different stakeholders. Identify several possible stakeholders a firm may have and discuss how the firm may achieve stakeholder symbiosis.

Question 56

The text discusses several characteristics of effective strategic objectives. List several of these and discuss why a firm's strategic objectives should meet these criteria.