Deck 1: Basic Concepts in Strategic Management

Question 1

The goal of NAFTA is complete economic integration.

Answer 1

False

Question 2

Globalization is the integrated internationalization of markets and corporations.

Answer 2

True

Question 3

An example of an objective is "increased profitability," while an example of a goal is "to increase the firm's profitability in 2010 by 15% over 2009."

Answer 3

False

Question 4

One of the benefits of strategic management is a clearer sense of strategic vision for the firm.

Question 5

One tenet of the learning organization is to maintain stability.

Question 6

Strategic flexibility is the ability to shift from one dominant strategy to another.

Question 7

A broad mission statement may limit the scope of a firm's activities in terms of the product or service offered.

Question 8

Climate change has become a growing concern for businesses to include in their corporate strategies.

Question 9

In the externally oriented planning phase, plans are developed by heavily involving the input of managers from lower levels.

Question 10

Strategic management is the set of managerial decisions that determines the short-term performance of a corporation.

Question 11

Knowing a company is mindful of its impact on the environment seldom changes consumer buying habits.

Question 12

Sustainability reflects business practices to manage the firm's triple bottom line.

Question 13

A Gallop study reported that companies that focused on business sustainability had 3.9 times the EPS growth rates as compared to organizations that did not focus on business sustainability.

Question 14

According to organizational learning theory, an organization uses knowledge to improve the fit between itself and its environment.

Question 15

As more industries become global, strategic management is becoming less important in positioning a company for long-term competitive advantage.

Question 16

Population ecology is a theory that proposes organizations can and do adapt to change by imitating other successful organizations.

Question 17

One member of the European Union (EU)is Chile.

Question 18

General Electric led the transition from strategic planning to strategic management during the 1980s.

Question 19

To be effective, strategic management must be a formal process.

Question 20

The internal environment includes the variables that are within the short-run control of top management.

Question 21

A budget is a statement of a corporation's programs in terms of dollars.

Question 22

Performance results are monitored at the strategy formulation phase of the strategic management process.

Question 23

A strategic decision is rare, consequential, and directive.

Question 24

When an organization is evaluating its strategic position, which is NOT one of the strategic questions that an organization may ask itself?

A) Where is the organization now?
B) Are we a socially responsible firm?
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 25

Mintzberg's entrepreneurial mode is sometimes referred to as "muddling through" since this decision- making mode tends to be more reactive than proactive in the search for new opportunities.

Question 26

While the strategic audit is not an all-inclusive list, it presents many of the critical questions needed for a detailed strategic analysis of any business.

Question 27

In the final phase of strategic management, strategic information is available to

A) people throughout the organization.
B) the top management responsible for decision making.
C) middle management.
D) operational personnel.
E) only those responsible for implementing the strategy.

Question 28

Logical incrementalism is a useful decision-making mode when the environment is rapidly changing and when it is important to build consensus.

Question 29

The time horizon involved with regard to basic financial planning is usually

A) one year.
B) one quarter.
C) more than five years.
D) less than one month.
E) more than three years.

Question 30

In a survey of 50 corporations, which of the following was rated as a benefit of strategic management?

A) clearer sense of vision for the firm
B) higher levels of employee motivation
C) higher levels of job satisfaction
D) improved productivity
E) lower employee turnover

Question 31

Henry Mintzberg discovered that strategic formulation is a regular, continuous process.

Question 32

A strategy maximizes competitive advantage and minimizes competitive disadvantage.

Question 33

A functional strategy may include competitive or cooperative strategies.

Question 34

A hierarchy of strategy emphasizes the need for the three levels of strategy to complement and support one another.

Question 35

A difference between basic financial planning and forecast-based planning is

A) the time horizon is shorter in forecast-based planning.
B) forecast-based planning incorporates internal and external information.
C) basic financial planning utilizes consultants with sophisticated techniques.
D) basic financial planning utilizes scenarios and contingency strategies.
E) basic financial planning relies heavily on input from lower levels in the organization.

Question 36

Punctuated equilibrium describes organizations as evolving through relatively long periods of stability punctuated by relatively short bursts of fundamental change.

Question 37

Top-down planning that emphasizes formal strategy formulation and leaves the implementation issues to lower management levels is known as

A) forecast-based planning.
B) externally oriented planning.
C) strategic management.
D) basic financial planning.
E) none of the above

Question 38

Corporate strategy occurs at the business unit or product level.

Question 39

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 40

The emphasis of strategic management is on

A) monitoring and evaluating external opportunities and threats in light of a corporation's strengths and weaknesses.
B) first line managers.
C) the short-run performance of the corporation.
D) an examination of the organization's internal environment.
E) an investigation of competitor actions.

Question 41

Strategic planning in a multidivisional corporation

A) should be informal to allow complete understanding by the many participants.
B) should be instigated only from the main corporate office.
C) should be accomplished quickly to decrease the likelihood of it becoming outdated.
D) should encourage a clear delineation between top management and lower-level managers.
E) should be a formalized and sophisticated system.

Question 42

The theory that proposes organizations can and do adapt to changing conditions by imitating other successful organizations is known as

A) population ecology.
B) institution theory.
C) citizenship theory.
D) strategic theory.
E) sample theory.

Question 43

Canada, the United States, and Mexico are affiliated economically under which trade alliance?

A) ASEAN
B) Mercosur
C) EU
D) NAFTA
E) CAFTA

Question 44

The integrated internationalization of markets and corporations is called

A) normalization.
B) economic integration.
C) globalization.
D) nationalization.
E) regionalization.

Question 45

The S in SWOT stands for

A) strategies.
B) scanning.
C) strengths.
D) societal.
E) sociocultural.

Question 46

The ability of a corporation to shift from one dominant strategy to another is called

A) strategy implementation.
B) chaos formulation.
C) contingency management.
D) logical incrementalism.
E) strategic flexibility.

Question 47

According to Alfred Chandler

A) high-tech industries are defined by "paths of learning."
B) companies spring from an individual entrepreneur's knowledge, which then evolves into organizational knowledge.
C) once a corporation has built its learning base to the point where it has become a core company in its industry, entrepreneurial start-ups are rarely able to successfully enter.
D) organizational strengths derive from learned capabilities.
E) all of the above

Question 48

Members of the European Union (EU)include all of the following EXCEPT

A) Ireland.
B) Malaysia.
C) Belgium.
D) France.
E) Slovakia.

Question 49

The currency used to integrate the monetary systems of the European Union (EU)is called the

A) peso.
B) dollar.
C) euro.
D) franc.
E) pound.

Question 50

The triple bottom line refers to which of the following?

A) water, air, and oil.
B) footprints, finance, and environment.
C) physical environment, traditional profit/loss, and air.
D) traditional profit/loss, social responsibility, and environmental responsibility.
E) social responsibility, people, and ethics.

Question 51

The ability of an organization to reshape its environment is described by

A) population ecology theory.
B) institution theory.
C) the strategic choice perspective.
D) organizational learning theory.
E) organizational citizenship theory.

Question 52

Research of the planning practices of companies in the oil industry concludes that the real value of modern strategic planning is more

A) in the planning.
B) in the strategic thinking and organizational learning.
C) in the resulting written strategic plan.
D) in the formality of the process.
E) in the improved communication within the organization.

Question 53

The regional trade association composed of Argentina, Brazil, Uruguay, and Paraguay is called

A) EU.
B) ASEAN.
C) NAFTA.
D) Mercosur.
E) ABUP.

Question 54

Strategic management is that set of managerial decisions and actions that determine the long-run performance of a corporation.Which one of the following is NOT one of the basic elements of the strategic management process?

A) strategy formulation
B) strategy implementation
C) statistical process control
D) evaluation and control
E) environmental scanning

Question 55

An organization skilled at creating, acquiring, and transferring knowledge, and at modifying its behavior to reflect new knowledge and insights is a(n)

A) learning organization.
B) strategically managed corporation.
C) innovative organization.
D) hypercompetitive competitor.
E) entrepreneurial firm.

Question 56

One of the benefits of globalization is

A) economies of scale.
B) decreased outsourcing.
C) increased union negotiations.
D) increased taxes.
E) additional human resource training.

Question 57

The monitoring, evaluating, and disseminating of information from the external and internal environments to key people within the corporation is referred to as

A) environmental scanning.
B) external scanning.
C) internal scanning.
D) strategy formulation.
E) strategy implementation.

Question 58

All of the following reflect activities of a learning organization EXCEPT

A) experimenting with new approaches.
B) learning from its own experiences and past history.
C) solving problems systematically.
D) alienating competitors in the industry.
E) transferring knowledge quickly and efficiently throughout the organization.

Question 59

Strategic planning within a small organization

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

Question 60

Which theory proposes that once an organization is successfully established in a particular environmental niche, it is unable to adapt to changing conditions?

A) population ecology
B) institution
C) citizenship
D) strategic choice
E) organizational learning

Question 61

The development of long-range plans for the effective management of environmental opportunities and threats in light of corporate strengths and weaknesses is known as

A) strategy formulation.
B) strategy implementation.
C) strategy control.
D) strategy development.
E) strategy evaluation.

Question 62

The type of strategy which describes a company's overall direction in terms of its general attitude toward growth and the management of its various businesses and product lines is

A) functional.
B) operational.
C) business.
D) product.
E) corporate.

Question 63

The T in SWOT stands for

A) trust.
B) technical.
C) terminal.
D) threats.
E) task.

Question 64

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 worldwide.
E) Diversify from retailing into delivery.

Question 65

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) a statement of what the organization would like to become

Question 66

Which of the following is an example of a corporate strategy?

A) Diversify product line to appeal to more people.
B) Imitate products of competitors.
C) Pay highest salaries to keep high quality employees.
D) Develop and sell quality appliances worldwide.
E) Divide a sales region into a group of sales districts.

Question 67

Which one of the following is included in the firm's task environment?

A) technological factors
B) sociocultural factors
C) economic factors
D) stockholders
E) political-legal forces

Question 68

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 worldwide.
E) Divide a sales region into a group of sales districts.

Question 69

The process by which strategies and policies are put into action through the development of programs, budgets, and procedures is

A) strategy formulation.
B) strategy control.
C) strategy implementation.
D) strategy development.
E) strategy evaluation.

Question 70

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 71

Which of the following is an example of a mission statement?

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 worldwide.
E) Divide a sales region into a group of sales districts.

Question 72

Which one of the following is included in the firm's societal environment?

A) competitors
B) economic forces
C) resources
D) governments
E) special interest groups

Question 73

Which one of the following is an example of a narrow scope in a mission?

A) transportation (vs. railroads)
B) computers (vs. office equipment)
C) health care (vs. hospitals)
D) real estate (vs. apartments)
E) telecommunications (vs. television)

Question 74

The type of strategy which achieves corporate and business unit objectives and strategies by maximizing resource productivity is

A) functional.
B) operational.
C) business.
D) product.
E) corporate.

Question 75

The variables structure, culture, and resources pertain to the

A) external environment.
B) internal environment.
C) sociocultural forces.
D) task environment.
E) societal environment.

Question 76

The type of strategy which emphasizes the improvement of the competitive position of a corporation's products or services in a particular industry or market segment served by a business unit is

A) functional.
B) operational.
C) business.
D) environmental.
E) corporate.

Question 77

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 that links the formulation of strategy with its implementation.
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 78

The Strategic Management Model presents the following process of strategy formulation:

A) Objectives - Policies - Strategies - Mission.
B) Mission - Policies - Strategies - Objectives.
C) Policies - Mission - Strategies - Objectives.
D) Policies - Strategies - Objectives - Mission.
E) Mission - Objectives - Strategies - Policies.

Question 79

The organization's corporate mission statement

A) should have a different mission statement for each subsidiary division.
B) should be less formally stated to allow for growth.
C) should set the organization apart from its competitors.
D) should state what the organization would like to become.
E) should describe the organization's SWOT.

Question 80

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.