Deck 1: Strategic Leadership: Managing the Strategy-Making Process for Competitive Advantage

Question 1

SWOT analysis is implemented to fine-tune strategies.

Answer 1

True

Question 2

ROIC is a measure of how efficiently and effectively managers use the capital at their disposal to produce profitability.

Answer 2

True

Question 3

The profit growth of a company can be measured by the increase in its stock price over time.

Answer 3

False

Question 4

General managers bear responsibility for the overall performance of the company or for one of its major self-contained subunits or divisions.

Question 5

A firm obtains competitive advantage when its strategy results in superior performance relative to its competitors.

Question 6

Unfortunately,values are personal and have little to do with organizational culture or competitive advantage.

Question 7

The CEO is a company's principal general manager.

Question 8

The feedback loop in the model of the strategic management process indicates that the process is ongoing; it never ends.

Question 9

To increase shareholder value,managers must pursue strategies that increase revenue and market share,whether the results are profitable or not.

Question 10

One of the factors that distinguishes organizations in the nonprofit sector from for-profit businesses is the lack of concern for strategic management.

Question 11

Strategic leadership is concerned with how to most effectively manage a company's strategy-making process to create competitive advantage.

Question 12

The final component of the strategic management process is crafting the organization's mission statement,which provides the framework or context within which strategies are formulated.

Question 13

Fortunately,the concepts vision and mission can be used interchangeably.

Question 14

Well-constructed goals provide a means by which the performance of managers can be evaluated.

Question 15

The mission of a company lays out some desired future state and articulates what the company would like to achieve.

Question 16

The traditional planning model suggests that a company's strategies are the result of a plan from a highly structured process orchestrated by top management.

Question 17

SWOT analysis concerns identifying strengths,weaknesses,options,and threats.

Question 18

A business model is managers' conception of how the set of strategies their company pursues should mesh together into a congruent whole,thus enabling the company to gain a competitive advantage and achieve superior profitability and profit growth.

Question 19

A strategy can be defined as a set of related actions that managers take to increase their company's performance.

Question 20

Mintzberg's model suggests a company's realized strategy is the product of whatever strategies are actually put into action-intended and emergent.

Question 21

A competitive advantage is considered to be a sustained competitive advantage when the

A) advantage endures for a number of years.
B) firm is able to spread the advantage to all of its business units.
C) advantage is very large.
D) advantage was gained at a low cost.
E) managers who developed the advantage are still employed at the firm.

Question 22

The first step in the strategic management process is

A) defining the mission and major goals of the organization.
B) analyzing the macroenvironment.
C) analyzing the industry environment.
D) determining the firm's strengths and weaknesses.
E) deciding on a fit between the organization's strengths and weaknesses and the environment's opportunities and threats.

Question 23

Functional managers

A) are responsible for the specific business functions or operations that constitute a company or one of its divisions.
B) look at the overall picture of a corporation.
C) have no strategic role.
D) formulate generic strategies.
E) execute business-level decisions.

Question 24

The principal driver(s)of shareholder value is (are)

A) profitability.
B) profit growth.
C) market share.
D) profitability and profit growth.
E) all of these choices.

Question 25

Emergent strategies arise in a company with careful long-term planning.

Question 26

Which of the following is the organization's principal general manager?

A) The Board of Director
B) Marketing division head
C) CFO
D) CEO
E) Controller

Question 27

Vice President Chung is responsible for executing decisions about human resources.Ms.Chung is

A) a corporate-level general manager.
B) both a corporate- and business-level general manager.
C) a business-level general manager.
D) a functional manager.
E) a corporate-level, business-level, and functional manager.

Question 28

Strategic leadership is about

A) strategy formulation.
B) strategy implementation.
C) how to effectively manage a company's strategy and create competitive advantage.
D) establishing effective contract processes.
E) reducing a company's operating costs.

Question 29

Strategy formulation refers to the

A) task of designing organizational structures and control systems.
B) process by which strategies are put into action.
C) top-down planning process that gives rise to the implementation of emergent strategies.
D) task of analyzing an organization's external and internal environment and then selecting an appropriate strategy.
E) process of choosing a realized strategy.

Question 30

The great virtue of scenario planning is that managers must think outside the box to anticipate what they might do in different situations.

Question 31

Roza Munoz is the head of Maxwell House Coffee,a division of the Kraft Foods Company.Which of the following is not likely to be one of Ms.Munoz's responsibilities?

A) Turning corporate-level strategy into action
B) Defining Kraft Food's mission
C) Deciding how to compete in the coffee industry
D) Supervising functional-level managers
E) Developing a business-level strategy

Question 32

In practice,the strategies of most organizations are probably a combination of the intended and emergent strategies.

Question 33

Honda redefined the U.S.motorcycle industry with a brilliantly conceived intented strategy.

Question 34

Profit growth is best measured

A) by the increase in share price.
B) by the return on investment.
C) by the increase in net sales.
D) over time.
E) by increases in liquidity.

Question 35

Maximizing shareholder value is

A) a byproduct of a company's cost reduction programs.
B) not generally a viable goal for a company.
C) not the responsibility of a company's managers.
D) the ultimate goal of profit-making companies.
E) not required to attract risk capital.

Question 36

Which of the following dimension(s)is (are)encompassed by a company's business model?

A) Selecting customers
B) Defining and differentiating its product offerings
C) Determining how it will produce goods and services
D) Determining how it will grow the business over time
E) All of these.

Question 37

Given that they are developed through years of experience,rules of thumb rarely if ever lead to severe errors in the decision making process.

Question 38

Within a diversified company,the responsibilities of corporate-level strategic managers include

A) translating the corporate mission statement into concrete strategies for individual business units.
B) closely supervising the formulation of strategies at the functional level that support the company's business- and corporate-level strategies.
C) allocating resources to functions within business units.
D) overseeing the development of strategies for the total organization and allocating resources among its different business areas.
E) identifying and establishing relationships with supplier firms.

Question 39

General managers are found

A) only at the corporate level.
B) only at the business level.
C) only at the functional and business levels.
D) at the functional, business, and corporate levels.
E) only at the corporate and business levels.

Question 40

Research finds that leaders who exhibit a high degree of emotional intelligence tend to be significantly less effective than those who do not.

Question 41

Jeffrey Pfeffer believes that a manager's political power comes from his or her control over

A) employees' paychecks.
B) the firm's strategic vision.
C) important organizational resources.
D) internal communication channels.
E) the company's website.

Question 42

The primary goal of a SWOT analysis is to

A) benchmark a company's performance.
B) force managers to think creatively rather than analytically.
C) forecast future events.
D) develop short-run goals.
E) create, affirm, or fine-tune a company-specific business model.

Question 43

Aaron planned to cut prices at his bicycle shop,but when a competing shop began to offer free repairs,Aaron decided to copy them.Aaron's new strategy (offer free repairs)is an example of a(n)

A) mistake.
B) emergent strategy.
C) deliberate strategy.
D) intended strategy.
E) unrealized strategy.

Question 44

A company's mission

A) lays out the desired future state of the company.
B) outlines the manner in which employees and managers should conduct themselves.
C) defines the manner in which strategies will be developed and attained.
D) describes what the company does.
E) answers the question, "What will our business become?"

Question 45

Feelings of personal responsibility for a project are most likely to lead to

A) prior hypothesis biases.
B) escalating commitment.
C) reasoning by analogy.
D) representativeness.
E) ivory tower planning.

Question 46

A sustained competitive advantage

A) enables a company to maintain above-average projects for a number of years.
B) cannot be maintained for more than three years.
C) is seldom possible in today's highly competitive environment.
D) typically arises out of unforeseen economic events.
E) A and D.

Question 47

The scenario approach to strategic planning involves

A) devising plans for coping with a number of different possible future states of the world.
B) homing in on a single prediction of future demand conditions using an iterative planning process.
C) functional managers setting key corporate objectives.
D) using computers to build virtual worlds for top-level managers.
E) making planning the exclusive domain of top-level managers.

Question 48

Edward Wrapp's ideas about the astuteness of political power suggest that successful strategic managers

A) are skilled organizational politicians who can build consensus and get their ideas pushed through.
B) are unwilling to live with less than total acceptance of their programs.
C) maintain tight control over as many decisions as possible.
D) publicly commit themselves to bold strategic agendas.
E) recognize the futility of pursuing intended strategies.

Question 49

Which of the following is not a cognitive bias?

A) Escalating commitment
B) Reasoning by analogy
C) Ivory tower thinking
D) Representativeness
E) Illusion of control

Question 50

In the typical scenario planning exercise,

A) most scenarios are pessimistic.
B) most scenarios are optimistic.
C) some scenarios are optimistic and some scenarios are pessimistic.
D) only worst-case outcomes should be considered.
E) only best-case outcomes should be considered.

Question 51

Which of the following cognitive biases refers to the fact that decision makers who have strong prior beliefs about the relationship between two variables tend to make decisions on the basis of these beliefs,even when presented with evidence that their beliefs are wrong?

A) Prior hypothesis bias
B) Reasoning by analogy
C) Illusion of control
D) Escalating commitment
E) Representativeness

Question 52

Devil's advocacy

A) is simpler than the expert approach.
B) is an example of ivory tower planning.
C) results in unproductive conflict.
D) involves one group member being responsible for questioning the assumptions of a plan.
E) results in a final plan that is a combination of a plan and a counterplan.

Question 53

Holly owns a landscape company and is thinking about expanding her services to include outdoor water features (waterfalls,streams,ponds).If,before making this decision,she looks at the experience of similar firms that have added outdoor water features,she is employing

A) wishful thinking.
B) aqua-evaluation.
C) devil's advocacy.
D) outside view.
E) dialectic inquiry.

Question 54

Which of the following cognitive biases occurs when decision makers commit even more resources if they receive feedback that the project is failing?

A) Prior hypothesis bias
B) Reasoning by analogy
C) Illusion of control
D) Escalating commitment
E) Representativeness

Question 55

An important first step in the process of formulating a company's mission is to

A) describe the technological processor.
B) identify the customer segment served by the company.
C) answer the question, "What is our business?"
D) decide what the company will be like ten years from now.
E) evaluate the company's most recent performance.

Question 56

Sam Walton wanted Walmart to keep costs low.Therefore,as an example to others,he drove his own car and furnished his office with plain,steel desks.In this case,Mr.Walton was displaying his

A) commitment.
B) ego.
C) astute use of power.
D) emotional intelligence.
E) eloquence.

Question 57

When considering emergent strategies,it is important for a firm's managers to

A) ensure that the chosen strategies are the result of deliberate plans.
B) ignore strategies that are not the result of a formal planning process.
C) evaluate each one carefully, using only those that show the most promise.
D) substitute emergent strategies for formal plans whenever possible.
E) develop the emergent strategies themselves.

Question 58

Which of the following is not a characteristic of well-constructed goals?

A) They are precise and measurable.
B) They are the result of a group decision process.
C) They specify a time period.
D) They are challenging but realistic.
E) They address critical issues.

Question 59

Strategic implementation involves

A) taking actions at the functional, business, and corporate levels.
B) comparing company performance with leading companies in the industry.
C) analyzing the macroenvironment for any last-minute changes that may have occurred.
D) only activities at the corporate level.
E) all of these choices.

Question 60

Scenario-based planning is a technique for coping with the problem of

A) uncertainty.
B) planning equilibrium.
C) bottom-up planning.
D) strategic fit.
E) cognitive bias.

Question 61

Which of the following is not a characteristic of emotional intelligence?

A) Self-awareness
B) Self-regulation
C) Self-esteem
D) Empathy
E) Social skills

Question 62

Between 2005 and 2011,Blue Drink Company increased its net profit from $5 million to $25 million.It was able to do this by expanding its product line to include a wider variety of drink flavors as well as introducing a low-calorie line.The $20 million increase in net profit between 2005 and 2011 can be referred to as which of the following?

A) Emergent strategy
B) Shareholder value
C) Profit growth
D) Profitability turnover
E) Risk capital

Question 63

Good strategic leaders

A) possess a willingness to delegate and empower subordinates.
B) control all facets of decision making.
C) are confident in their ability to make sound decisions without consulting others.
D) assure uniformity of purpose through the exercise of power.
E) have the ability to be inconsistent when the situation requires inconsistency.

Question 64

An emergent strategy is

A) the result of a planned strategy.
B) an unplanned response to unforeseen circumstances.
C) the product of careful top-down planning mechanisms.
D) the same as a realized strategy.
E) a group response to a problem area.

Question 65

When Nada's boss informed her that she must work this weekend,her scheduled weekend off,Nada felt furious.Instead of acting on her impulses and yelling at her boss,Nada decided to have a calm conversation with him concerning her days off.Nada utilized which of Goleman's aspects of emotional intelligence?

A) Self-awareness
B) Self-regulation
C) Motivation
D) Empathy
E) Social skills

Question 66

More people seem to fear a snake bite than a dog bite,and yet statistically one is more likely to be bitten by a dog than by a snake.This represents which of the following cognitive biases?

A) Escalating commitment
B) Hypothesis bias
C) Availability error
D) Representativeness
E) Illusion of control

Question 67

Systematic errors in the decision-making process are caused by

A) inadequate information.
B) information overload.
C) cognitive biases on the part of decision makers.
D) poor data collection procedures.
E) all of these choices.

Question 68

The American Red Cross,the Ford Foundation,and the American Civil Liberties Union can all be classified as

A) groups involved in civil rights.
B) nonprofit enterprises.
C) enterprises for profit.
D) cash cows.
E) ROICs.

Question 69

Differentiate between general and functional managers.Provide an example of each from your college or university.

Question 70

Louis is a human resources manager at XYZ Company.He is responsible for hiring,retaining,and compensating employees.Louis can best be descibed as a(n)

A) business-level manager.
B) functional-level manager.
C) corporate-level manager.
D) top-level manager.
E) Chairman of the Board.

Question 71

A component of strategy implementation is

A) designing the best organization structure, culture, and control systems to put a strategy into action.
B) enumerating the number and kind of periodic reports that must be submitted by functional-level managers.
C) analyzing the macroeconomic environment of the company.
D) answering the question, "What is our business?"
E) all of these choices.

Question 72

At the law offices of Hughes & Hughes,employees are encouraged to recycle cups used at the water cooler and turn off office lights when not in use.John Hughes,the owner and manager of the firm,leads by example and often completes his paperwork using natural light.John utilizes which of the following characteristics of good business leaders?

A) Vision
B) Commitment
C) Eloquence
D) Articulation of the business model
E) Emotional intelligence

Question 73

Julie is the marketing manager at Mountain Productions,Inc.When Sarah,one of her subodinates,told Julie that her father had passed away,Julie felt sympathy for Sarah because she could relate to what she was experiencing; Julie had lost her father 6 months prior.Julie felt _______ for Sarah.

A) an availability error
B) self-awareness
C) self-regulation
D) motivation
E) empathy

Question 74

Identify the levels of strategic managers and discuss their role in the strategic management process.

Question 75

Explain the formal strategic planning process.Name each step in the process and describe the specific activities included in each step and the relationship between the steps.

Question 76

Describe at least three of the cognitive biases that individual decision makers experience.Then describe a real or hypothetical situation for each of the three biases,explaining how the bias is evident in the situation.

Question 77

Describe at least three characteristics of strong strategic leaders.Explain how each of the three characteristics would help motivate and lead an organization's personnel.

Question 78

Identify and discuss the criticisms of the traditional strategic planning process and why it is useful to view strategy as an emergent process.

Question 79

Zappos.com executives have aligned the entire organization around one purpose: "to provide the best customer service possible." This statement can best be described as which of the following?

A) The company's emergent strategy
B) The company's corporate structure
C) The company's HR strategy
D) The company's mission
E) The company's vision