Deck 2: Strategic Management Fundamentals

Question 1

A firm has many different stakeholder groups

Answer 1

True
In addition to shareholders, employees, customers, suppliers and others have an interest in the firm's performance

Question 2

Strategies can never be broken into smaller elements for implementation

Answer 2

False
Corporate and business strategies cover many different functional areas, and by their very nature need to be broken down into smaller elements

Question 3

A mental model includes assumptions about the industry and competition

Answer 3

True
A mental model is a view of the world, including the industry and competition, which is widely shard within the firm

Question 4

Strategic decisions are those that affect the long-term well-being of the firm

Question 5

The creation of competitive advantage is a sufficient condition for creating economic value

Question 6

Revolutionary strategy rarely affects the entire business system

Question 7

Strategy must be analytic and creative, committed yet flexible

Question 8

All strategies have risks

Question 9

A decision is strategic when it has the potential to put the future of the firm at risk

Question 10

Strategy is never the result of a collective decision-making process

Question 11

Appropriate time horizons depend on the speed at which markets are evolving

Question 12

Returns to shareholders are always under the control of management

Question 13

Value creation involves customer selection and meeting customer needs

Question 14

Managers' mental models are easy to change

Question 15

High-potential employees will always leave the firm

Question 16

In the contemporary business environment the costs of delay are rising

Question 17

Successful senior executives are rarely insulated from reality

Question 18

Strategic managers must be wary of adopting an industry-dominated perspective on the world

Question 19

Suppliers have become key stakeholders for many firms

Question 20

A business model is the system for generating value for customers and earning a profit