Question 1

Strategy formulation and implementation must be simultaneously integrated for a successful strategic management process.

Accepted Answer

Simultaneous integration ensures that strategies are not only well-planned but also effectively executed, aligning resources and actions with strategic goals.

Question 2

The I/O and resource-based models contain many of the same steps.One clear difference between the two models is the resource-based model starts by looking at the internal strengths and weaknesses of a firm, while the I/O model begins with an examination of the external environment.Another key difference is the resource-based model identifies an attractive industry much earlier in the process than does the I/O model.

Accepted Answer

The resource-based model focuses on internal resources and capabilities first, while the I/O model starts with the external environment. However, the resource-based model does not identify an attractive industry earlier; it emphasizes leveraging internal strengths to gain competitive advantage.

Question 3

An effective vision stretches and challenges people and can result in increased innovation.This is illustrated by Apple's CEO Steve Jobs, who was known to think bigger and differently than most people.

Accepted Answer

Steve Jobs' visionary leadership at Apple encouraged innovation and creativity, pushing the company to develop groundbreaking products like the iPhone and iPad.

Question 4

If a firm is dependent on a specific stakeholder group, that group has less influence on the firm's strategic decision making.

Accepted Answer

If a firm is dependent on a specific stakeholder group, that group has more influence on the firm's strategic decision making because the firm relies on them for resources or support.

Question 5

The local government with whom a firm interacts, the people who buy its products, and the contractors who supply raw materials are all part of a firm's capital market stakeholders.

Accepted Answer

These entities are part of a firm's product market stakeholders, not capital market stakeholders. Capital market stakeholders include investors, shareholders, and creditors.

Question 6

A firm's mission tends to be enduring while its vision can change in light of changing environmental conditions.

Accepted Answer

The answer of A firm's mission tends to be enduring...

Question 7

In contrast to shareholders, a firm's customers prefer that investors receive a minimum return on their investments.

Accepted Answer

Customers prefer that investors receive a minimum return on their investments because it ensures that the firm will have the resources to continue operating and providing goods and services.

Question 8

Hourly workers on the production line of a chicken-processing plant are considered organizational stakeholders.

Accepted Answer

Hourly workers are considered organizational stakeholders because they have a direct interest in the company's operations and outcomes, as their employment and income depend on the company's success.

Question 9

When a firm earns lower-than-average returns, the highest priority is given to satisfying the needs of capital market stakeholders over the needs of product market and organizational shareholders.

Accepted Answer

When a firm earns lower-than-average returns, the priority is often to satisfy the needs of product market stakeholders (such as customers and suppliers) and organizational stakeholders (such as employees) to stabilize and improve performance, rather than focusing solely on capital market stakeholders.

Question 10

An organization's willingness to tolerate or encourage unethical behavior is a reflection of its core values.

Accepted Answer

An organization's core values guide its culture and behavior, so tolerance or encouragement of unethical behavior indicates those values.

Question 11

The firm's mission is more concrete than its vision.

Accepted Answer

A mission statement outlines the firm's current purpose and operations, making it more concrete, while a vision statement describes the future aspirations and goals, which are more abstract.

Question 12

All of a firm's resources and capabilities have the potential to be the foundation for a competitive advantage.

Accepted Answer

Not all resources and capabilities are valuable, rare, inimitable, and non-substitutable, which are necessary conditions for a competitive advantage according to the VRIN framework.

Question 13

An effective vision statement must specify the industry in which a company will operate.

Accepted Answer

A vision statement is meant to be broad and aspirational, focusing on the future goals and values of the company rather than specifying the industry.

Question 14

The assumptions of the industrial organization model and the resource-based model are contradictory.Therefore, organizational strategists must choose one or the other model as the basis for developing a strategic plan.

Accepted Answer

The industrial organization model and the resource-based model are not contradictory; they are complementary. Strategists can integrate insights from both models to develop a comprehensive strategic plan.

Question 15

Stakeholders are people located in different areas and levels of the firm using the strategic management process to select strategic actions that help the firm achieve its vision and fulfill its mission.

Accepted Answer

Stakeholders are individuals or groups that have an interest in the firm's activities and outcomes, but they are not necessarily involved in the strategic management process.

Question 16

Strategic leaders must have a strong strategic orientation while simultaneously embracing change in the dynamic competitive landscape.

Accepted Answer

Strategic leaders need to balance a clear vision and direction with the ability to adapt to changes in the competitive environment to ensure long-term success.

Question 17

The uniqueness of a firm's resources and capabilities is the basis for a firm's strategy and its ability to earn above-average returns under the industrial organization (I/O) model.

Accepted Answer

The industrial organization (I/O) model emphasizes the external environment and industry structure as the primary determinants of a firm's strategy and performance, rather than the firm's unique resources and capabilities.

Question 18

Research shows that a greater percentage of a firm's profitability is explained by the I/O model rather than the resource-based model.

Accepted Answer

Research generally indicates that the resource-based model, which focuses on a firm's internal resources and capabilities, often explains a greater percentage of a firm's profitability compared to the I/O model, which emphasizes external industry factors.

Question 19

Six years ago, Colette Smith founded a successful catering company that specializes in providing a wide assortment of miniature cheesecakes for corporate and social events.Although Ms.Smith is no longer active in the actual production of the cheesecakes, she continues as president of the catering company.Ms.Smith could be considered a strategic leader of this firm.

Accepted Answer

A strategic leader is someone who influences or guides the direction of a company, often focusing on long-term goals and strategies. As president, Ms. Smith likely plays a key role in shaping the company's vision and strategy, even if she is not involved in day-to-day operations.

Question 20

Power is the most critical criterion in prioritizing stakeholders.

Accepted Answer

The answer of Power is the most critical criterion in...

Quiz 1: Strategic Management and Strategic Competitiveness