Deck 1: Basic Concepts of Strategic Management

Question 1

Which of the following is an example of a procedure?

A) Evaluate all personnel annually in January using Form 25-51.
B) Pay highest salaries to keep high quality employees.
C) Divide a sales region into a group of sales districts.
D) Develop and sell quality appliances world-wide.
E) Diversify product line to appeal to more people.

Answer 1

A

Question 2

Strategic planning within a small organization

A) may be informal and irregular.
B) must be elaborate to allow for future growth.
C) should be formalized and explicitly stated
D) should be done by the president only.
E) is unnecessary and a waste of time.

Answer 2

A

Question 3

Research done by Henry Mintzberg suggests that strategy formulation

A) is an irregular and a discontinuous process.
B) should be followed unswervingly to ensure success of the plan.
C) is worthless.
D) should be reviewed after a specific interval of time to make sure it is still applicable.
E) is merely a checklist of actions following a logical process.

Answer 3

A

Question 4

Which of the following is NOT one the five triggering events that are the stimulus for a strategic change?

A) Intervention by the organization's bank
B) Entrance of a new competitor into the industry
C) Change in ownership of the organization
D) New CEO
E) Awareness by management of decreased profitability

Question 5

Which of the following is an example of a strategy?

A) Diversify product line to appeal to more people.
B) Increase sales by 10% over last year.
C) Pay highest salaries to keep high quality employees.
D) Develop and sell quality appliances world-wide.
E) Divide a sales region into a group of sales districts.

Question 6

A large, multidivisional business has three levels in its hierarchy of strategy:

A) Corporate -- Business -- Functional.
B) Environmental -- Corporate -- Functional.
C) Environmental -- Enterprise -- Corporate.
D) Business -- Divisional -- Functional.
E) Industry -- Corporate -- Divisional.

Question 7

A goal differs from an objective because it

A) is open-ended.
B) is quantified.
C) specifies measurable results.
D) is clearly specified.
E) provides a time horizon.

Question 8

Which of the following is an example of an objective?

A) Diversify product line to appeal to more people.
B) Increase sales by 10% over last year.
C) Pay highest salaries to keep high quality employees.
D) Develop and sell quality appliances world-wide.
E) Divide a sales region into a group of sales districts.

Question 9

An organization that is skilled at creating, acquiring, and transferring knowledge and at modifying its behavior to reflect new knowledge and insights

A) asks if it should be or not be.
B) is operating in Phase 1 of strategic management.
C) has a mechanistic structure.
D) is a learning organization.
E) is crazy.

Question 10

The first step of the strategic decision making process, as given in the book, is to

A) review corporate governance.
B) evaluate current performance results.
C) analyze strategic factors.
D) scan the internal environment.
E) scan the external environment.

Question 11

The mode of strategy formulation used when top management has a reasonably clear idea of the corporation's mission and objectives, but it chooses to develop a series of tentative or partial strategies instead of developing full-blown strategies is called

A) planning mode.
B) logical incrementalism.
C) entrepreneurial mode.
D) adaptive mode.
E) strategic mode.

Question 12

Which of the following is an example of a policy?

A) Diversify product line to appeal to more people.
B) Increase sales by 10% over last year.
C) Pay highest salaries to keep high quality employees.
D) Develop and sell quality appliances world-wide.
E) Divide a sales region into a group of sales districts.

Question 13

Which of the following is an example of a mission?

A) Diversify product line to appeal to more people.
B) Increase sales by 10% over last year.
C) Pay highest salaries to keep high quality employees.
D) Develop and sell quality appliances world-wide.
E) Divide a sales region into a group of sales districts.

Question 14

The corporate mission is best described by which one of the following?

A) A description of the activities carried out by the organization.
B) The purpose or reason for the corporation's existence.
C) A description of top management's responsibilities.
D) A statement of corporate objectives.
E) The philosophy of the founder.

Question 15

Which is NOT one of the strategic questions that an organization must ask itself?

A) Where is the organization now?
B) How can functional and operational areas be improved?
C) If no changes are made, where will the organization be in one year?
D) If the evaluation is negative, what specific actions should management take?
E) If no changes are made, where will the organization be in 10 years?

Question 16

According to Mintzberg, the entrepreneurial mode of strategy formulation

A) is characterized by reactive solutions to existing problems.
B) assumes major responsibilities for strategy formulation.
C) is focused on opportunities seen by one person.
D) includes the proactive search for new opportunities and reactive solutions to existing problems.
E) assumes the environment is unresponsive to input.

Question 17

Which of the following is NOT a characteristic of strategic decisions as mentioned in the text?

A) directive
B) consequential
C) rare
D) continuous

Question 18

As defined in this course, a policy is

A) the purpose or reason for a corporation's existence.
B) a statement of activities or steps needed to accomplish a single-use plan.
C) a broad guideline for making decisions.
D) a comprehensive master plan stating how a corporation will achieve its mission and objectives.
E) a statement of a corporation's programs in dollar terms.

Question 19

Which of the following is an example of a program?

A) Diversify product line to appeal to more people.
B) Increase sales by 10% over last year.
C) Pay highest salaries to keep high quality employees.
D) Develop and sell quality appliances world-wide.
E) Divide a sales region into a group of sales districts.

Question 20

Research suggests that strategic management evolves through four sequential phases in corporations. The first phase is

A) externally-oriented planning.
B) basic financial planning.
C) internally-oriented planning.
D) forecast-based planning.
E) strategic management.

Question 21

The focus of "functional strategy" is

A) on stability, growth, or retrenchment.
B) maximizing resource productivity.
C) on overall cost leadership differentiation.
D) achieving overall direction.
E) scanning the environment.