Deck 3: The Diamond-E Framework

Question 1

The Diamond-E model is a framework for

A) financial assessment
B) market evaluation
C) product decisions
D) strategic analysis

Answer 1

D

Question 2

Organizations that engage in informal strategic reviews on an on-going basis are

A) concerned about their organization's financial stability
B) having misgivings about their organization's strategic direction
C) in a position to respond in a timely manner to strategic possibilities
D) following the lead of their major competitors

Answer 2

C

Question 3

The first step in the process of strategic analysis is to

A) develop a set of mutually exclusive options
B) establish the need for action
C) evaluate the competitive environment
D) undertake a gap analysis

Answer 3

B

Question 4

The strategy-environment linkage aligns

A) strategy with the regulatory environment in which the organization operates
B) strategic opportunities and challenges with external forces
C) strategy with the financial environment of the organization
D) strategic opportunities and challenges with the internal environment

Question 5

One approach that can be used to evaluate the performance of the organization is to

A) forecast future performance based on the current strategy
B) measure performance against the level of competition in the industry
C) compare the budget forecast to actual expenditures for the current period
D) measure performance against an external standard

Question 6

Opportunities for the organization are found in its

A) financial statements
B) external environment
C) internal capabilities
D) the value chain activities

Question 7

One of the key activities associated with the development of the base case is a careful analysis of the

A) capabilities of the management team
B) priorities of the Board of Directors
C) strengths of the organization's major competitors
D) current performance of the organization

Question 8

The underlying logic of the Diamond-E model is consistency, meaning the

A) financial resources of the firm are matched with the priorities of the shareholders
B) strategy is in keeping with the priorities of suppliers
C) strategy is consistent with the internal and external environment
D) financial resources of the firm are matched with its strengths

Question 9

Environmental risks typically arise from inconsistencies between

A) strategy and the sustainability of the organization
B) the financial resources of the organization and its strengths
C) strategy and external opportunities and challenges
D) the financial resources of the organization and its technology assets

Question 10

A technique known as a gap analysis is used to evaluate the

A) strategy-resources linkage
B) resources-organization linkage
C) strategy-management preferences linkage
D) resources-environment linkage

Question 11

The strategic preferences of the management team need to be considered to

A) avoid conflict
B) develop an appropriate strategy
C) counter environmental threats
D) leverage internal capabilities

Question 12

Strategic reviews are typically undertaken

A) as part of the annual financial audit
B) every December 31
C) in preparation for filing the corporate tax return
D) on a periodic basis, such as once a year

Question 13

The organization's external environment suggests what the organization

A) needs to do given the competitive landscape
B) has the capabilities to competently execute
C) should have done in the past
D) should implement immediately

Question 14

An organization's capabilities are influenced by its

A) financial resources and employee development program
B) leadership and the priorities of the Board of Directors
C) structure and management processes
D) culture and corporate governance

Question 15

A viable strategy needs to be aligned with the

A) financial resources of the firm
B) organization's internal capabilities
C) priorities of the shareholders
D) organization's current market position

Question 16

Strategic tension refers to the constraints that exist between what an organization

A) has done in the past and what it could do in the future
B) could do and how the management team wants to proceed
C) should do and its product/market focus
D) should do and what it can do

Question 17

When evaluating a strategic proposal, an important consideration is the implications for the organization's

A) employees
B) suppliers
C) contractors
D) current strategy

Question 18

Environmental risks typically arise because the

A) management misread the situation or failed to adapt to changing circumstances
B) organization was incapable of responding to the situation or its response was inadequate
C) management took too long to respond to the situation
D) organization lacked the required resources to respond to the situation

Question 19

Capability risks typically arise from inconsistencies between

A) strategy and the sustainability of the organization
B) the financial resources of the organization and its strengths
C) strategy and internal competencies of the organization
D) the financial resources of the organization and its culture

Question 20

Three key components of the Diamond-E model are

A) product/market focus, corporate goals, and strategy
B) organization, strategy, and environment
C) financial resources, management preferences, and the product/market focus
D) corporate goals, internal strengths, and external threats

Question 21

Hidden assets can be identified from the

A) organization's financial statements
B) minutes of the Board of Directors' meetings
C) organization's internal capabilities
D) organization's external analysis

Question 22

Failure to develop internal capabilities in the long term can limit the success of the strategic initiative.

Question 23

Management roll-out of a new comprehensive compensation scheme is likely addressing

A) short-term environmental risks
B) long-term environmental risks
C) short-term capability risks
D) long-term capability risks

Question 24

Changes in the external environment can cause a strategy to become obsolete in the short term.

Question 25

Complacency can cause an organization's internal capabilities to erode over time.

Question 26

One of the key activities associated with the strategy formulation stage of strategic analysis is to

A) generate strategic proposals
B) assess past performance
C) forecast future performance based on current strategy
D) establish need for change

Question 27

Kodak procrastinating for years before deciding to enter the market for digital photography is an example of

A) inconsistencies with strategy and resources
B) inconsistencies between strategy and environment
C) inconsistencies with strategy and capabilities
D) inconsistencies between current and proposed strategies

Question 28

The third step in the process of strategic analysis is to

A) forecast future performance under current strategy
B) use the Diamond-E framework to shape and short-list proposals
C) prepare performance forecasts for short-listed proposals
D) commit, implement and review

Question 29

Industry profits are a good indicator of environmental risks.

Question 30

When reviewing an organization's strategic proposals, one of the considerations should be the

A) uniqueness of the proposals
B) cost of retraining the workforce
C) regulatory reporting requirements
D) level of risk given the nature of the opportunity

Question 31

Strategy tends to emerge from a series of discrete decisions made over time.

Question 32

A short-run environmental risk is a strategy that demands too much of an organization.

Question 33

If organizational performance is not in keeping with expectations, the recommended strategic approach is to

A) check vulnerabilities
B) develop new core competencies
C) introduce cost cutting measures
D) problem solve and undertake remedial action

Question 34

When a firm satisfies key stakeholder interests at the expense of not delivering exactly what the market needs, the firm is most likely guided by

A) what the firm "needs" to do
B) what the firm's capabilities "can" do
C) what the firm's management preference "wants" to do
D) what the firm's belief in what it "should" do

Question 35

The second step in the process of strategic analysis is to

A) develop and evaluate proposals to address business opportunities and challenges
B) assess past performance
C) forecast future performance under current strategy
D) move to build commitment and develop required capabilities

Question 36

Managerial preferences influence resource developing indirectly.

Question 37

Strategy describes the opportunities the business is pursuing in the marketplace.

Question 38

A viable strategy is one that is consistent with the realities of the internal and external environment.

Question 39

Good strategies sometimes fail because the

A) competition moved ahead
B) industry outlook was negative
C) government called an election
D) implementation was challenging

Question 40

Once a strategy has been established it seldom needs to be changed.

Question 41

The implication of changes in the external environment is an important factor when assessing the strategy-resources linkage.

Question 42

Not all businesses have a strategy, so the management team may have to create one to begin the strategic analysis process.

Question 43

One of the challenges faced by the management team when developing strategy is to determine what the organization can do versus what it is capable of doing.

Question 44

The process of strategic analysis should be part of the everyday agenda of the management team.

Question 45

The Diamond-E model provides an effective means for formulating a new strategy.

Question 46

The Diamond-E model is used primarily for developing new strategic initiatives.

Question 47

An analysis of implementation issues should inform the formulation of strategy.

Question 48

The base case forecasts organizational performance for the most conservative of the strategic proposals under consideration.

Question 49

A comparison of the firm's performance relative to its competitors can identify areas of strength as well as vulnerabilities.

Question 50

A gap analysis identifies missing resource requirements.

Question 51

Culture is a critical variable when it comes to developing organizational capabilities.

Question 52

One of the outcomes of the environmental assessment is an identification of the strengths of the organization.

Question 53

Once the strategic proposals have been evaluated, the next step is implementation.

Question 54

If the strategy-organization linkage is flawed, then the organizational structure may need to be changed.

Question 55

Managerial preferences can be a strategic constraint.