Deck 9: Strategy Review, Evaluation, and Control

Question 1

Adequate and timely feedback is important to effective strategy evaluation.

Answer 1

True

Question 2

When measuring organizational performance, you need to compare expected results to actual results.

Answer 2

True

Question 3

Competitive advantages normally are the result of superiority in one of three areas: feasibility, consistency, or consonance.

Answer 3

False

Question 4

Strategies may be inconsistent if policy problems and issues continue to be brought to the top for resolution.

Question 5

According to Richard Rumelt, consonance and consistency are mostly based on a firm's external assessment.

Question 6

In strategy evaluation, a revised IFE matrix should indicate how effective a firm's strategies have been in response to key opportunities and threats.

Question 7

It is most effective to conduct strategy evaluation annually, at the end of the fiscal year.

Question 8

Consistency, distinctiveness, advantage, and feasibility are Richard Rumelt's four criteria for evaluating a strategy.

Question 9

Changes in the organization's management, marketing, finance and accounting, production and operations, research and development (R&D), and management information systems (MIS)strengths and weaknesses should all be the focus of a revised EFE matrix in strategy evaluation.

Question 10

Regardless of the size of the organization, a certain amount of "management by wandering around" at all levels is essential to effective strategy evaluation.

Question 11

Evaluating strategies on a continuous rather than on a periodic basis allows benchmarks of progress to be established and more effectively monitored.

Question 12

Strategy evaluation is becoming increasingly easier with the passage of time, given technological advances.

Question 13

The decreasing time span for which planning can be done with any degree of certainty is a reason strategy evaluation is more difficult today.

Question 14

Financial ratios are rarely used as criteria to evaluate strategies.

Question 15

According to Rumelt, consistency and feasibility are largely based on a firm's internal assessment.

Question 16

Too much emphasis on evaluating strategies may be expensive and counterproductive.

Question 17

Strategy evaluation should have a long-run focus and avoid a short-run focus.

Question 18

Most strategists believe that an organization's well-being depends on evaluation of the strategic-management process.

Question 19

Strengths, weaknesses, opportunities, cost and threats should continually be monitored for change because it is not really a question of whether these factors will change, but rather when they will change and in what ways.

Question 20

Criteria for evaluating strategies should be measurable and easily verifiable.

Question 21

The test of an effective evaluation system is its complexity.

Question 22

The form of a Balanced Scorecard does not vary for different organizations or industries.

Question 23

Measuring organizational performance requires making changes to reposition a firm competitively for the future.

Question 24

According to research, participation in strategy-evaluation activities is one of the best ways to overcome individuals' resistance to change.

Question 25

Yahoo was one of the firms most admired in its industry according to Fortune's 2012 evaluation.

Question 26

Small organizations require a more elaborate and detailed strategy-evaluation system because they are still evolving.

Question 27

Organizations should prepare contingency plans just for unfavorable events.

Question 28

Timely approximate information is generally more desirable as a basis for strategy evaluation than accurate information that does not depict the present.

Question 29

Taking corrective actions does not necessarily mean that existing strategies will be abandoned, or even that new strategies must be formulated.

Question 30

Strategy-evaluation activities must be meaningful, that is, they should specifically relate to a firm's objectives.

Question 31

Intuitive judgments are almost always involved in deriving quantitative criteria.

Question 32

The Balanced Scorecard approach deals with the question, "How satisfied are the firm's customers?"

Question 33

Corrective action in strategy evaluation is necessary to keep an organization on track toward achieving stated objectives.

Question 34

Alvin Toffler argues that environments are becoming so dynamic and complex that they threaten people and organizations with future shock, in his thought-provoking books entitled Future Shock and The Third Wave.

Question 35

Measuring organizational performance includes comparing expected results to actual results, investigating deviations from plans, evaluating individual performance, and examining progress being made toward meeting stated objectives.

Question 36

Contingency plans are alternative plans that can be put into effect if certain key events do not occur as expected.

Question 37

Most quantitative evaluation criteria are geared to long-term objectives rather than annual objectives.

Question 38

Future shock occurs when the nature, type, and speed of changes overpower an individual's or organization's ability and capacity to adapt.

Question 39

There is no one ideal strategy-evaluation system for all organizations.

Question 40

Each year, Fortune publishes strategy-evaluation research on both the United States and other countries.

Question 41

What is the cornerstone of effective strategy evaluation?

A) Adequate and timely feedback
B) Quality and quantity of managers
C) Smaller ratio of top- to lower-level management
D) Evaluation preceding implementation stage
E) Punitive corrective actions

Question 42

Identifying both good and bad events that could jeopardize strategies is the first step of effective contingency planning.

Question 43

Public accounting firms usually avoid strategy-evaluation services.

Question 44

Most executives believe that some strategic information should remain confidential to top managers.

Question 45

A frequently used tool in strategy evaluation is the audit.

Question 46

Which of the following is NOT a reason for the increasing difficulty of evaluating strategies?

A) Product life cycles are longer.
B) Domestic and world economies are less stable.
C) Product development cycles are shorter.
D) Technological advancement is more rapid.
E) Change is occurring more frequently.

Question 47

The U.S. Chamber of Commerce is against the accounting switch from GAAP to IFRS, saying it will cause cross-border commerce to decline.

Question 48

Believing it will make it easier for investors to compare firms across countries and make it easier to raise capital globally, most large accounting firms and multinational firms favor the switch to IFRS.

Question 49

Alternative strategies not selected for implementation should be discarded, as they have a tendency to contaminate the contingency plans.

Question 50

Strategists should try to cover all bases by planning for all possible contingencies.

Question 51

All of the following are reasons strategy evaluation is more difficult today EXCEPT

A) a dramatic increase in the environment's complexity.
B) the increasing number of variables.
C) the increase in the number of both domestic and world events affecting organizations.
D) the increasing time span for which planning can be done with any degree of certainty.
E) the rapid rate of obsolescence of even the best plans.

Question 52

Increased education and diversity of the workforce at all levels are reasons why the top-down approach should be favored in organizations.

Question 53

All of these are Richard Rumelt's criteria to evaluate a strategy EXCEPT

A) advantage.
B) consistency.
C) feasibility.
D) distinctiveness.
E) consonance.

Question 54

Which of these is a basic activity of strategy evaluation?

A) Reviewing the underlying bases of current strategies
B) Comparing expected results with actual results
C) Taking corrective actions
D) Choices B and C only
E) All of the above

Question 55

Contingency plans should be as simple as possible.

Question 56

IFRS standards comprise 25,000 pages, whereas GAAP standards comprise 5,000 pages.

Question 57

Too much emphasis on evaluating strategies

A) may be expensive and counterproductive.
B) is not possible - the more emphasis the better.
C) is good for morale, as employees like being closely evaluated.
D) is always advised if the firm can afford it.
E) is worse than too little or no evaluation.

Question 58

The accounting switch from GAAP to IFRS in the U.S. is going to cost businesses millions of dollars in fees and upgraded software systems and training.

Question 59

The U.S. Chamber of Commerce supports the change from GAAP to IFRS, saying it will help the U.S. compete in the world economy.

Question 60

With the passage of time strategy evaluation is becoming

A) increasingly difficult.
B) much simpler.
C) very convenient.
D) an unnecessary activity.
E) less important.

Question 61

What corrective actions might a firm take during strategy evaluation?

A) Revise the business mission
B) Issue stock
C) Revise objectives
D) Sell a division
E) All of the above

Question 62

According to Rumelt, the final broad test of strategy is its

A) advantage.
B) feasibility.
C) consonance.
D) consistency.
E) distinctiveness.

Question 63

A revised ________ should indicate how effective a firm's strategies have been in response to key opportunities and threats.

A) IFE matrix
B) mission
C) EFE matrix
D) vision
E) CPM matrix

Question 64

Strategy-evaluation activities should ideally be performed

A) just on a periodic basis.
B) only at the onset of a problem.
C) on a continuous basis.
D) solely upon completion of major projects.
E) annually only.

Question 65

If success for one organizational department means failure for another department, then strategies may be

A) synergistic.
B) advantageous.
C) trendy.
D) feasible.
E) inconsistent.

Question 66

Modern organizational realities demand that employees demonstrate greater

A) flexibility.
B) innovation.
C) creativity.
D) initiative.
E) all of the above

Question 67

Also important in evaluating strategies are ________ criteria, like high absenteeism and turnover rates, or low employee satisfaction.

A) numerical
B) qualitative
C) quantitative
D) accounting
E) financial

Question 68

Corrective actions are almost always ________ except when external and internal factors have not significantly changed and the firm is progressing satisfactorily toward achieving stated objectives.

A) unnecessary
B) needed
C) undesirable
D) prohibitively expensive
E) futile

Question 69

What term refers to the need for strategists to examine sets of trends, as well as individual trends, in evaluating strategies?

A) Consistency
B) Consonance
C) Synergy
D) Feasibility
E) Advantage

Question 70

Most quantitative criteria are geared to ________ objectives rather than ________ objectives.

A) top-management; employee
B) short-term; annual
C) annual; long-term
D) environmental; community
E) long-term; short-term

Question 71

Rumelt's criteria of consonance refers to the need for strategists to examine

A) inconsistent goals.
B) sets of trends.
C) impractical objectives.
D) competitive advantages.
E) the costs associated with particular strategies.

Question 72

If you discover during the course of strategy evaluation that major changes have occurred in the firm's internal strategic position, you should

A) continue on the present strategic course.
B) wait until the next quarter to see if things revert.
C) take corrective actions.
D) follow the original strategic plan.
E) none of the above

Question 73

Financial ratios are used to compare a firm's performance over different time periods, to compare the firm's performance to industry averages, and to compare a firm's performance with

A) overall business standards.
B) projected goals.
C) the performance of suppliers.
D) non-financial ratios.
E) the performance of competitors.

Question 74

Competitive advantage normally is the result of superiority in resources, skills, or

A) employees.
B) position.
C) consistency.
D) feasibility.
E) governance.

Question 75

Success today

A) guarantees success tomorrow.
B) is no guarantee of success tomorrow.
C) should lull a firm into complacency.
D) is all that really matters.
E) none of the above.

Question 76

A revised ________ should focus on changes in the organization's management, marketing, finance and accounting, production and operations, research and development (R&D), and management information systems (MIS)strengths and weaknesses.

A) mission
B) IFE matrix
C) vision
D) EFE matrix
E) EPM matrix

Question 77

Which of these is a potential problem associated with using only quantitative criteria for selecting strategies?

A) Most quantitative criteria are geared to long-term objectives rather than annual objectives.
B) Different accounting methods can provide different results on many quantitative criteria.
C) Intuitive judgments are never used in deriving quantitative criteria.
D) Quantitative criteria include human factors that may be underlying causes of declining performance.
E) Quantitative criteria are not able to compare the firm's performance over different period of time.

Question 78

Which of the following is NOT included in measuring organizational performance?

A) Comparing results to competitors' expectations
B) Examining progress being made toward meeting stated objectives
C) Investigating deviations from plans
D) Evaluating individual performance
E) Comparing expected results to actual results

Question 79

Quantitative criteria commonly used to evaluate strategies are

A) cash budgets.
B) Balanced Scorecards.
C) Capital Asset Pricing Models.
D) financial ratios.
E) present value analyses.

Question 80

Which of the following is a corrective action a company might take to correct unfavorable variances?

A) Divesting a division
B) Revising objectives
C) Raising capital with stock or debt
D) Allocating resources differently
E) All of the above