Question 1

Risk in strategic management is only the probability that the strategy will be effective.

Accepted Answer

Risk in strategic management involves both the probability of success and the potential impact if the strategy fails. Therefore, it is not solely limited to the probability of effectiveness.

Question 2

The technique used to help strategic managers choose among alternative choices by defining the task environment, developing a set of various forecasts, and using pro forma financial statements is called
A) decision trees.
B) SWOT analysis.
C) industry scenarios.
D) corporate scenarios.
E) Capital Asset Pricing Model.

Accepted Answer

The answer of The technique used to help strategic managers...

Question 3

If there is little fit between a strategic alternative under consideration and the corporate culture, which of the following is one of management's options to consider?
A) Take a chance on ignoring the culture by implementing the strategic alternative.
B) Manage around the culture and change the implementation plan.
C) Try to change the culture to fit the strategy.
D) Change the strategy to fit the culture.
E) Restrict the firm to consider only those strategies compatible with the culture.

Accepted Answer

The answer of If there is little fit between a...

Question 4

The most commonly used political strategies include which of the following?
A) constituency building
B) political action committee contributions
C) advocacy advertising
D) lobbying
E) all of the above

Accepted Answer

All of the listed strategies are commonly used in politics. Constituency building involves actively engaging with and gaining support from members of a particular district or community. Political action committee contributions are donations made by interest groups to political candidates in order to gain influence and advocate for their interests. Advocacy advertising involves using media to influence public opinion on a particular issue or candidate. Lobbying involves directly communicating with government officials in order to influence policy decisions.

Question 5

The type of strategy used to influence a corporation's key stakeholders in order to increase their support of corporate activities is
A) cooperative strategy.
B) political strategy.
C) competitive strategy.
D) marketing strategy.
E) profit strategy.

Accepted Answer

The strategy used to influence a corporation's key stakeholders is a political strategy, which involves attempting to modify the political or regulatory environment surrounding their activities to increase support from stakeholders and decrease opposition. Cooperative strategy involves partnerships and alliances with other companies, while competitive strategy involves outperforming rivals in the market. Marketing strategy focuses on promoting products or services to customers, and profit strategy involves incorporating financial goals into overall business strategy.

Question 6

Once the best strategic alternative is selected, the broad guidelines for its implementation are then defined by
A) trade-offs.
B) policies.
C) procedures.
D) resource allocation.
E) strategic options.

Accepted Answer

Once the best strategic alternative is selected, the broad guidelines for its implementation are defined by policies. Policies provide a framework for decision-making and actions that support the chosen strategy. Trade-offs, procedures, and resource allocation are all important considerations in implementing a strategy, but ultimately it is policies that outline the overarching approach to be taken. Strategic options are the available choices for decision-making, but do not provide guidance on implementation.

Question 7

An important consideration in the selection of a strategy is the ability of each alternative to satisfy agreed-upon objectives with the least resources and the fewest negatives. The competitive advantages developed earlier using ________ is an excellent place to start.
A) factors to ensure profitable return on investment
B) the VRIO framework
C) the analysis of the competitive environment
D) industry research
E) the analysis of governmental regulations and requirements

Accepted Answer

The VRIO framework helps in analyzing a company's resources and capabilities to determine its competitive advantage. Using this framework can help in identifying which strategies are most likely to satisfy objectives with the least resources and the fewest negatives. Therefore, it is the best choice among the given options.

Question 8

The first step in constructing a corporate scenario is to
A) develop a common-sized financial statement.
B) construct detailed pro forma financial statements.
C) decide upon how much risk management is willing to accept.
D) analyze the societal environment.
E) use industry scenarios to develop a set of assumptions about the task environment.

Accepted Answer

The first step in constructing a corporate scenario is to use industry scenarios to develop a set of assumptions about the task environment. This will help guide the development of a strategic plan and the construction of detailed pro forma financial statements. Without understanding the task environment, it is difficult to develop a realistic and effective corporate scenario. Analyzing the societal environment and determining risk management preferences come later in the process. Developing a common-sized financial statement may be a useful tool, but it is not the first step in constructing a corporate scenario.

Question 9

According to the text, which of the following is not one of the reasons why innovations seem to occur more often in small firms rather than in large, established corporations?
A) An entrepreneur in a small firm is more willing to accept greater risk than would a larger firm.
B) Small firms are completely ignorant of risk management.
C) The greater the assets involved and the longer they are tied up, the more likely top management in large firms are to demand a high probability of success.
D) Companies operating in global industries must deal with a greater amount of risk than firms operating only in one country.
E) If the corporation's stock is widely held as in the case of large firms and experiences stock price declines due to some external assessment, it places the firm in jeopardy of being acquired.

Accepted Answer

The text does not state that small firms are completely ignorant of risk management. In fact, the text suggests that small firms may be more willing to accept risk than larger firms, which can actually be an advantage in fostering innovation.

Question 10

To avoid the consensus trap, which technique assigns a group or individual to identify potential pitfalls and problems with a proposed alternative strategy in a formal presentation?
A) devil's advocate
B) Sloan's judgment
C) sales presentation
D) dialectical inquiry
E) scenario construction

Accepted Answer

The devil's advocate technique involves assigning a group or individual to identify potential pitfalls and problems with a proposed alternative strategy in a formal presentation. This helps to avoid the consensus trap by encouraging critical evaluation and constructive criticism of ideas. Other techniques such as Sloan's judgment, sales presentation, dialectical inquiry, and scenario construction may be useful for decision making, but do not specifically address the issue of avoiding the consensus trap.

Question 11

What are the strategies to avoid proposed by the authors?

Accepted Answer

The answer of What are the strategies to avoid proposed...

Question 12

Which of the following is not true of risk?
A) It includes the length of time the asset will be unavailable for other uses.
B) It includes the probability that the strategy will be effective.
C) Managers who own a significant amount of stock in their firms are less likely to engage in risk-taking actions.
D) It includes the amount of assets the corporation must allocate to that strategy.
E) The greater the assets involved, the more likely top management is to demand a high probability of success.

Accepted Answer

This statement is not true. Managers who own a significant amount of stock in their firms may actually be more likely to engage in risk-taking actions, as they have a personal financial stake in the success of the company.

Question 13

The evaluation of alternative strategies and selection of the best alternative is referred to as
A) alternative generation.
B) strategic implementation.
C) strategic choice.
D) strategic selection.
E) evaluation.

Accepted Answer

The evaluation of alternative strategies and selection of the best alternative is referred to as strategic choice. Therefore, the best choice is C.

Question 14

Which of the following reflects the impact of industry backgrounds on strategic choices?
A) Executives from other industries tend to make riskier decisions.
B) Executives with strong ties within an industry tend to choose strategies commonly used in that industry.
C) Executives from other industries tend to downsize as a first choice.
D) Executives with strong ties within an industry tend to make riskier decisions.
E) Executives from other industries tend to emphasize ROI.

Accepted Answer

Executives with strong ties within an industry tend to choose strategies commonly used in that industry. This is because they have more knowledge and experience within that industry and are more familiar with what has worked before. They may be less likely to take risks and try new things outside of the industry's norms.

Question 15

Constituency building, coalition building, and advocacy advertising are commonly used
A) marketing strategies.
B) risk strategies.
C) human resource management strategies.
D) political strategies.
E) logistics strategies.

Accepted Answer

Constituency building, coalition building, and advocacy advertising are political strategies that are commonly used in public policy and political campaigns. Constituency building involves identifying and engaging with specific groups of people who have a shared interest in a particular issue, while coalition building involves working with other organizations and stakeholders who share common goals or objectives. Advocacy advertising is a form of communication that seeks to influence public opinion and policy decisions. These strategies are used by politicians and advocacy groups to achieve their policy goals and to gain support from their constituents.

Question 16

Another approach to evaluating alternatives under conditions of high environmental uncertainty is to use the
A) net present value.
B) real-options approach.
C) stakeholder priority matrix.
D) risk assessment approach.
E) hurdle rate approach.

Accepted Answer

The real-options approach is the best choice because it allows for flexibility and adaptation in the face of high environmental uncertainty. This approach recognizes that alternatives may have value beyond their immediate financial return and considers the potential for future opportunities or risks. It helps decision-makers in uncertain conditions by providing a framework for valuing options and making more informed decisions.

Question 17

To avoid the consensus trap, which technique involving presenting two conflicting views (the thesis and the antithesis) presented in a debate format can be traced back to Plato and Aristotle?
A) devil's advocate
B) Sloan's judgment
C) sales presentation
D) dialectical inquiry
E) scenario construction

Accepted Answer

The technique described of presenting two conflicting views in a debate format can be traced back to Plato and Aristotle and is known as dialectical inquiry. This technique helps avoid the consensus trap by encouraging critical thinking and evaluation of multiple perspectives instead of blindly accepting a single viewpoint. Devil's advocate, Sloan's judgment, sales presentation, and scenario construction are all techniques that may be useful in decision-making and problem-solving, but they do not specifically involve presenting conflicting views in a debate format like dialectical inquiry does.

Question 18

Fujitsu demonstrated a follow-the-leader strategy when it imitated IBM's strategy focused on mainframes in 1990.

Accepted Answer

Fujitsu did indeed imitate IBM's strategy focused on mainframes in 1990.

Question 19

Which one of the following is not one of the questions that management should raise in their attempt to assess the importance to the corporation of stakeholders' concerns?
A) Which stakeholder group should be represented on the board of directors?
B) How will this decision affect each stakeholder?
C) How much of what the stakeholders want are they likely to get under a certain alternative?
D) What are the stakeholders likely to do if they don't get what they want?
E) What is the probability that the stakeholders will follow through on their demand?

Accepted Answer

This question is not directly related to assessing the importance of stakeholders' concerns, but rather focuses on specific actions for board of directors. The other questions (B, C, D, E) all relate to understanding the impact and potential consequences of decisions on stakeholders.

Question 20

According to Paul Nutt, a decision-making authority, what percent of decisions made by managers are failures?
A) 10%
B) 25%
C) 50%
D) 75%
E) 90%

Accepted Answer

According to Paul Nutt, about 50% of decisions made by managers are failures. This highlights the importance of making well-informed and data-driven decisions to reduce the risk of failure.

Quiz 8: Strategy Formulation: Functional Strategy and Strategic Choice

Risk in strategic management is only the probability that the strategy will be effective.

The technique used to help strategic managers choose among alternative choices by defining the task environment, developing a set of various forecasts, and using pro forma financial statements is called

If there is little fit between a strategic alternative under consideration and the corporate culture, which of the following is one of management's options to consider?

The most commonly used political strategies include which of the following?

The type of strategy used to influence a corporation's key stakeholders in order to increase their support of corporate activities is

Once the best strategic alternative is selected, the broad guidelines for its implementation are then defined by

An important consideration in the selection of a strategy is the ability of each alternative to satisfy agreed-upon objectives with the least resources and the fewest negatives. The competitive advantages developed earlier using ________ is an excellent place to start.

The first step in constructing a corporate scenario is to

According to the text, which of the following is not one of the reasons why innovations seem to occur more often in small firms rather than in large, established corporations?

To avoid the consensus trap, which technique assigns a group or individual to identify potential pitfalls and problems with a proposed alternative strategy in a formal presentation?

What are the strategies to avoid proposed by the authors?

Which of the following is not true of risk?

The evaluation of alternative strategies and selection of the best alternative is referred to as

Which of the following reflects the impact of industry backgrounds on strategic choices?

Constituency building, coalition building, and advocacy advertising are commonly used

Another approach to evaluating alternatives under conditions of high environmental uncertainty is to use the

To avoid the consensus trap, which technique involving presenting two conflicting views (the thesis and the antithesis) presented in a debate format can be traced back to Plato and Aristotle?

Fujitsu demonstrated a follow-the-leader strategy when it imitated IBM's strategy focused on mainframes in 1990.

Which one of the following is not one of the questions that management should raise in their attempt to assess the importance to the corporation of stakeholders' concerns?

According to Paul Nutt, a decision-making authority, what percent of decisions made by managers are failures?