Deck 9: Strategy Review, Evaluation, and Control

Question 1

Adequate, timely feedback is important to effective strategy evaluation.

Answer 1

True

Question 2

In strategy evaluation, a revised IFE matrix should indicate how effective a firm's strategies have been in response to key opportunities and threats.

Answer 2

False

Question 3

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

Answer 3

True

Question 4

According to Richard Rumelt, consonance and consistency are based on a firm's external assessment.

Question 5

Most strategists believe that an organization's well being depends on evaluation of the strategic-management process.

Question 6

Criteria for evaluating strategies should be measurable and easily verifiable.

Question 7

Changes in the organization's management, marketing, finance, R&D and CIS strengths and weaknesses should all be the focus of a revised EFE matrix in strategy evaluation.

Question 8

Strategy evaluation should have a long-run focus and avoid a short-run focus.

Question 9

Because large companies have more at stake, it is more important for large organizations to conduct strategy evaluation than small companies.

Question 10

When taking corrective action, you need to compare expected results to actual results.

Question 11

According to Rumelt, consistency and feasibility are largely based on a firm's internal assessment.

Question 12

Strategies may be inconsistent if policy problems and issues continue to be brought to the top for resolution.

Question 13

Consistency, distinctiveness, advantage and feasibility are Richard Rumelt's four criteria for evaluating a strategy.

Question 14

Regardless of the size of the organization, a certain amount of management by wandering around at all levels is essential to effective strategy evaluation.

Question 15

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 16

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

Question 17

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

Question 18

Strengths, weaknesses, opportunities and threats 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 19

Specific financial ratios are rarely used criteria to evaluate strategies.

Question 20

The end of the fiscal year is the best time to do strategy evaluation.

Question 21

Each year, Fortune publishes strategy evaluation research on both the United States and other countries.

Question 22

The test of an effective evaluation system is its usefulness and complexity.

Question 23

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 24

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

Question 25

Future shock occurs when the type and speed of changes overpower an individual or organization's ability and capacity to adapt.

Question 26

Intuitive judgments are almost always involved in deriving quantitative criteria.

Question 27

The Balanced Scorecard Approach deals with the question, "How satisfied are the firm's customers."

Question 28

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

Question 29

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

Question 30

Strategy-evaluation activities must be meaningful, i.e., they should specifically relate to a firm's objectives.

Question 31

The basic form of a Balanced Scorecard is the same for all organizations and industries.

Question 32

Small organizations require a more elaborate and detailed strategy-evaluation system because they are still evolving.

Question 33

The most admired company in the world in 2007 was Apple.

Question 34

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 35

Timely approximate information is generally more desirable as a basis for strategy evaluation than accurate information that does not depict the present.

Question 36

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

Question 37

Contingency plans are alternative plans that can be put into effect if certain key events do not occur as expected.

Question 38

There is no one ideal strategy-evaluation system for all organizations.

Question 39

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

Question 40

Organizations should prepare contingency plans just for unfavorable events.

Question 41

All of these are Richard Rumelt's criteria to evaluate a strategy except:

A) advantage.
B) consistency.
C) feasibility.
D) distinctiveness.
E) consonance

Question 42

Moving environmental affairs from the line side of the organization to the staff side is required when instituting an environmental audit.

Question 43

Strategies should try to cover all bases by planning for all possible contingencies.

Question 44

What is happening to strategy evaluation with the passage of time?

A) increasingly difficult
B) much simpler
C) very convenient
D) an unnecessary activity
E) less important

Question 45

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) Taking corrective actions

Question 46

Which of the following is not a reason for the increasing difficulty of evaluating strategies?

A) Product life cycles are longer today than ever.
B) Domestic and world economies are less stable than ever.
C) Product development cycles are longer than ever.
D) Technological advancement is more rapid.
E) Change is occurring more frequently than ever

Question 47

China is home to 16 of the world's 20 most polluted cities.

Question 48

Contingency plans should be as simple as possible.

Question 49

Independent auditors are basically CPAs who provide their services to organizations for a fee.

Question 50

Over 90 percent of China's energy is derived from solar and nuclear power.

Question 51

Alternative strategies not selected for implementation should be discarded, as they have a tendency to contaminate the contingency plans.

Question 52

Identifying both beneficial and unfavorable events that could possibly derail the strategy or strategies is the first step of effective contingency planning.

Question 53

The strategic management process should be completely open because participation and openness enhance understanding, commitment, and communication within the firm.

Question 54

Two government agencies-IRS and GAO-employ government auditors responsible for making sure organizations comply with federal laws, statutes and policies.

Question 55

Increased education and diversity of the workforce at all levels are reasons why the top-down approach should be favored in organizations.

Question 56

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 decreasing difficulty of predicting the future with accuracy.
E) the rapid rate of obsolescence of even the best plans

Question 57

Public accounting firms usually avoid strategy evaluation services.

Question 58

Which of these is/are a basic activity of strategy evaluation?

A) Reviewing the underlying internal and external factors that represent the bases of current strategies
B) Measuring organizational performance
C) Taking corrective actions
D) all of the above
E) both B and C

Question 59

The purpose of strategy evaluation is to

A) increase the budget annually.
B) alert management to problems or potential problems.
C) make budget changes.
D) evaluate employees' performance.
E) improve R&D programs

Question 60

Independent auditors, government auditors and IRS auditors are the three groups of people who perform audits.

Question 61

When empowered employees are held accountable for and pressured to achieve specific goals and are given wide latitude in their actions to achieve them, there can be

A) increased productivity.
B) dysfunctional behavior.
C) decreased number of complaints.
D) decreased turnover.
E) increased number of litigations

Question 62

When you discover major changes have occurred in the firm's internal strategic position while conducting strategy evaluation, you should

A) continue on the present strategic course.
B) immediately discontinue all aspects of the present strategic course.
C) take corrective actions.
D) add additional funds to the present strategic plan.
E) copy the actions of major competitors

Question 63

Strategy-evaluation activities should be performed

A) on a periodic basis.
B) at the onset of a problem.
C) on a continuous basis.
D) upon completion of major projects.
E) every two years

Question 64

What is important because organizations face dynamic environments in which key external and internal factors often change quickly and dramatically?

A) Strategy formulation
B) Strategy evaluation
C) Strategy simplification
D) Strategy modification
E) Strategy implementation

Question 65

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

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

Question 66

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 67

Ineffectiveness and/or inefficiencies indicate the need for

A) layoffs.
B) consultants.
C) some form of correction action.
D) reductions in pay.
E) more synergy

Question 68

What term refers to the need for strategists to examine sets of trends, as well as individual trends in evaluating strategies?

A) Consistency
B) Consonance
C) Synergy
D) Feasibility
E) Advantage

Question 69

Strategy evaluation is based on

A) empirical data.
B) qualitative criteria.
C) objective data.
D) qualitative and quantitative criteria.
E) intuition

Question 70

A final broad test of strategy is its

A) advantage.
B) feasibility.
C) consonance.
D) consistency.
E) distinctiveness

Question 71

If success for one organizational department means failure for another department, then strategies may be

A) synergistic.
B) advantageous.
C) inconsonant
D) failures.
E) inconsistent

Question 72

Financial ratios are used to compare a firm's performance over different time periods, compare the firm's performance to industry averages, and compare a firm's performance with

A) overall business standards.
B) the performance of international firms.
C) the performance of suppliers.
D) non-financial ratios.
E) the performance of competitors

Question 73

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 74

What corrective actions should a firm take during strategy evaluation?

A) Revising the business mission
B) Issuing stock
C) Revising objectives
D) Selling a division
E) all of the above

Question 75

In evaluating strategies, which one of Rumelt's criteria for evaluating strategies, refers to the need for strategists to examine sets of trends?

A) consistency
B) consonance
C) feasibility
D) advantage
E) empowerment

Question 76

Corrective actions are not needed when

A) changes have occurred in the firm's internal strategic position.
B) external and internal factors have not significantly changed.
C) the firm is not progressing satisfactorily toward achieving stated objectives.
D) competitive factors are on the rise.
E) the industry is slowing down

Question 77

Which of these is not a key financial ratio?

A) Market share
B) Production quality
C) Earnings per share
D) Asset growth
E) Return on equity

Question 78

Changes in the organization's management, marketing, finance/accounting, R&D and CIS strengths and weaknesses should be the focus of a revised

A) mission.
B) IFE matrix.
C) vision.
D) EFE matrix.
E) EPM matrix

Question 79

Most quantitative criteria are geared to objectives rather than objectives.

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

Question 80

What is the basis for quantitative financial evaluation?

A) Reduction in costs
B) The EPS/EBIT Analysis
C) Capital Asset Pricing Model
D) Financial ratios
E) Present value analysis