Deck 9: Strategy Evaluation and Governance

Question 1

Too much pressure to achieve specific goals can lead to dysfunctional behavior.

Answer 1

True

Question 2

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

Answer 2

True

Question 3

Modern organizational realities demand many skills of employees. Which of the following is NOT a required skill?

A) Flexibility
B) Innovation
C) Creativity
D) Initiative
E) Patience

Answer 3

E

Question 4

Goal setting is critical to effective strategy evaluation.

Question 5

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

Question 6

________ advantage tends to be self-sustaining so long as key external and internal factors that underlie it (them) remain(s) stable.

A) Resource
B) Positional
C) Synergy
D) Skills
E) Capital

Question 7

Adequate and timely ________ is/are the cornerstone of effective strategy evaluation.

A) rewards
B) feedback
C) punishment
D) reminders
E) prompts

Question 8

The first activity in the strategy-evaluation process is to

A) develop organizational goals.
B) examine the underlying bases of a firm's strategy.
C) compare expected results with actual results.
D) examine the capital structure.
E) take corrective actions to ensure that performance conforms to plans.

Question 9

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 10

The idea that the positioning of one's ________ can enhance their combined effectiveness is familiar to military theorists, chess players, and diplomats.

A) people
B) facilities
C) profits
D) products
E) resources

Question 11

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 12

Comparing expected results with the actual results is the first activity in the strategy-evaluation process.

Question 13

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 14

Success today

A) guarantees success tomorrow.
B) is no guarantee of success tomorrow.
C) provides significant assurance of success tomorrow.
D) is all that really matters.
E) predicts tomorrow's success.

Question 15

Competitive advantages are normally the result of superiority in one of three areas. Which of the following is one of them?

A) Markets
B) Products
C) Profits
D) Resources
E) Revenues

Question 16

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 17

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 18

Adequate and timely feedback is the cornerstone of effective strategy evaluation.

Question 19

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

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

Question 20

Strategy evaluation is essential for developing objectives.

Question 21

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 22

A firm takes corrective actions during strategy evaluation. Which of the following is NOT a type of corrective action?

A) Alter strategies
B) Replace one or more key individuals
C) Revise objectives
D) Divest a division
E) Take on more debt

Question 23

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 24

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 25

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 26

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) acquire additional capital.

Question 27

Explain why strategy evaluation can be a complex and sensitive undertaking.

Question 28

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

Question 29

Some strategies take years to implement.

Question 30

What are some of the reasons why strategy evaluation is becoming increasingly difficult with the passage of time?

Question 31

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

Question 32

________ are quantitative criteria commonly used to evaluate strategies.

A) Cash budgets
B) Balanced Scorecards
C) Capital Asset Pricing Models
D) Financial ratios
E) Present value strategic analyses

Question 33

List and describe briefly the activities in the strategy-evaluation process.

Question 34

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

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

Question 35

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 almost 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 useful for comparisons of the firm's performance over different periods of time.

Question 36

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

Question 37

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 38

Which of the following is the first activity in strategy evaluation?

A) Examining the underlying bases of current strategies
B) Measuring organizational performance
C) Taking corrective actions
D) Monitoring the external environment
E) Monitoring the internal environment

Question 39

Which of the following is NOT 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) Taking punitive action

Question 40

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 41

Corrective actions are expected to

A) strengthen an organization's competitive position in its industry.
B) streamline asset holdings.
C) have no risk.
D) involve abandoning existing strategies.
E) help decrease debt.

Question 42

Taking corrective actions, requires making changes to competitively reposition a firm for the future.

Question 43

According to author Alvin Toffler, what occurs when the nature, types, and speed of changes overpower an individual's or organization's ability and capacity to adapt?

A) Corporate insecurity
B) Corrective actions
C) Future shock
D) Corporate agility
E) Projected performance

Question 44

Strengths, weaknesses, opportunities, cost and threats that represent the bases of current strategies 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 45

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

Question 46

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

Question 47

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 points of focus of a revised EFE Matrix in strategy evaluation.

Question 48

When measuring organizational performance, a comparison should be made between expected results and actual results.

Question 49

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 50

Corrective action should do all of the following EXCEPT

A) capitalize upon internal strengths.
B) avoid external opportunities.
C) avoid, reduce, or mitigate external threats.
D) improve internal weaknesses.
E) strengthen an organization's competitive position.

Question 51

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

Question 52

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

Question 53

Research suggests that which of the following is one of the best ways to overcome individuals' resistance to change in strategy evaluation?

A) Participation
B) Command-and-control
C) Laissez-faire system
D) Rational argument
E) Emotional reactions

Question 54

According to researchers, all of the following encourage individuals to accept change EXCEPT

A) having a cognitive understanding of the changes.
B) having a sense of control over the situation.
C) having an awareness that necessary actions are going to be taken to implement change.
D) participating in strategy-evaluation activities.
E) being overpowered by the nature, types, and speed of changes.

Question 55

Financial ratios are rarely used as criteria to evaluate strategies.

Question 56

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

Question 57

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 58

Intuitive judgments are almost always involved in deriving quantitative criteria.

Question 59

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 60

Criteria for evaluating strategies should be measurable and easily verifiable.

Question 61

The trend in the United States is toward larger boards of directors, with an average of 18 members being the norm.

Question 62

Which of the following is NOT one of the perspectives from which the Balanced Scorecard allows firms to evaluate strategies?

A) Social responsibility
B) Financial performance
C) Customer knowledge
D) Internal business processes
E) Learning and growth

Question 63

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

Question 64

What aims to balance long-term with short-term concerns, financial with nonfinancial concerns, and internal with external concerns?

A) Contingency planning
B) The Balanced Scorecard approach
C) Taking corrective action
D) Benchmarking
E) Consonance

Question 65

Today boards of directors are composed mostly of outsiders who are becoming more involved in an organization's strategic management.

Question 66

List and describe each of the three strategy-evaluation activities.

Question 67

All of the following are principles of good organizational governance, as established by BusinessWeek, EXCEPT

A) each director attends at least 75 percent of all meetings.
B) the audit, compensation and nominating committees are made up solely of outside directors.
C) each director owns a large equity stake in the company.
D) at least three directors are current or former company executives.
E) the CEO is not also the Chairperson of the Board.

Question 68

Which board of director's duty falls under the category of control and oversight over management?

A) Select new directors
B) Pass bylaws and related resolutions
C) Select the CEO
D) Maintain good public image
E) Ensure equitable stockholder representation

Question 69

Today, boards of directors are composed mostly of

A) outsiders.
B) management.
C) union members.
D) company employees.
E) past executives.

Question 70

In evaluating strategies, what three critical comparisons are made using financial ratios?

Question 71

The act of oversight and direction for an organization is referred to as

A) corporate lawmaking.
B) centralized control.
C) organizational direction.
D) establishing norms.
E) governance.

Question 72

A benefit of fewer board members is that CEOs are more often reprimanded (or dismissed) if needed.

Question 73

A question answered by the Balanced Scorecard approach is "How satisfied are the firm's customers?"

Question 74

The government is held accountable for the entire performance of an organization.

Question 75

The construction of a Balanced Scorecard is consistent across organizations and industries.

Question 76

How is the Balanced Scorecard used in the strategy process?

Question 77

In a Spencer Stuart 2017 survey, women made up ________ percent of new directors appointed at S&P 500 companies.

A) 22
B) 18
C) 36
D) 44
E) 51

Question 78

What are the six key issues related to the Balanced Scorecard?

Question 79

The act of oversight and direction over management is referred to as corporate governance.

Question 80

Shareholders are increasingly wary of boards of directors.