Deck 9: Strategy Review, Evaluation, and Control

Question 1

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

Answer 1

True

Question 2

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

Answer 2

False

Question 3

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

Answer 3

False

Question 4

Adequate,timely feedback is important to effective strategy evaluation.

Question 5

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

Question 6

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

Question 7

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

Question 8

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

Question 9

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 10

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

Question 11

The end of the fiscal year is the best time to do strategy evaluation.

Question 12

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

Question 13

Criteria for evaluating strategies should be measurable and easily verifiable.

Question 14

Strengths,weaknesses,opportunities 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 15

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

Question 16

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

Question 17

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

Question 18

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

Question 19

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 20

Specific financial ratios are rarely used criteria to evaluate strategies.

Question 21

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

Question 22

The test of an effective evaluation system is its usefulness and complexity.

Question 23

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

Question 24

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

Question 25

Intuitive judgments are almost always involved in deriving quantitative criteria.

Question 26

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

Question 27

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

Question 28

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 29

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

Question 30

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

Question 31

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

Question 32

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

Question 33

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

Question 34

The most admired company in the world in 2009 was Nestle.

Question 35

Organizations should prepare contingency plans just for unfavorable events.

Question 36

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

Question 37

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

Question 38

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

Question 39

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

Question 40

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 41

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

Question 42

Contingency plans should be as simple as possible.

Question 43

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

Question 44

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

Question 45

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 46

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 47

The strategic management process should be completely open because participation and openness enhance understanding,commitment,and communication within the firm.

Question 48

The U.S.Chamber of Commerce supports the change from GAAP to IFRS,saying it will lead to much more cross-border commerce and will help the U.S.compete in the world economy.

Question 49

The SEC in late 2009 charged General Electric with accounting fraud,specifically for reporting their finances using the new IFRS instead of the old GAAP.

Question 50

A frequently used tool in strategy evaluation is the audit.

Question 51

Unless the timetable is changed,all companies will be required to use the IFRS procedures in 2011.

Question 52

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 53

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

Question 54

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 55

Which of these is a basic activity of strategy evaluation?

A) Reviewing the underlying internal and external factors that represent the bases of current strategies
B) Measuring organizational performance
C) Taking corrective actions
D) All of the above
E) Only B and C

Question 56

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 decreasing difficulty of predicting the future with accuracy.
E) the rapid rate of obsolescence of even the best plans.

Question 57

Public accounting firms usually avoid strategy evaluation services.

Question 58

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

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

Question 59

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 60

Identifying both beneficial and unfavorable events that could possibly derail the strategy or strategies is the first step of effective contingency planning.

Question 61

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 62

What is the basis for quantitative financial evaluation?

A) Cash budget
B) The Balanced Scorecard
C) Capital Asset Pricing Model
D) Financial ratios
E) Present value analysis

Question 63

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 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

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 66

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

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

Question 67

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 68

Modern organizational realities demand that employees demonstrate greater

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

Question 69

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 70

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 71

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

Question 72

Which one of Rumelt's criteria for evaluating strategies refers to the need for strategists to examine sets of trends?

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

Question 73

In the course of strategy evaluation if you discover 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 74

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

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

Question 75

Which of these is not a key financial ratio?

A) Market share
B) Production quality
C) Earnings per share
D) Asset growth
E) Return on equity

Question 76

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

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

Question 77

What corrective actions might a firm take during strategy evaluation?

A) Revising the business mission
B) Issuing stock
C) Revising objectives
D) Selling a division
E) All of the above

Question 78

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

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

Question 79

Changes in the organization's management,marketing,finance/accounting,production/operations,R&D and MIS strengths and weaknesses should be the focus of a revised

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

Question 80

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) profit; social