Question 1

Discuss W. Edward Deming's position on sole sourcing.

Accepted Answer

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Question 2

Give an example of a technological leader.

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Question 3

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 technique of assigning a group or individual to act as a devil's advocate is used to avoid the consensus trap by identifying potential pitfalls and problems with a proposed alternative strategy in a formal presentation. This helps to ensure that all possible perspectives and concerns are taken into account before a final decision is made.

Question 4

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 the organization understand the potential challenges and opportunities they may face in the future. Only after this step can the organization move towards developing pro forma financial statements and assessing risk. Analyzing the societal environment may also be important, but it is not the first step in constructing a corporate scenario. Common-sized financial statements are not directly relevant to scenario planning.

Question 5

What is a functional strategy?

Accepted Answer

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Question 6

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 above strategies are commonly used in politics. Constituency building involves connecting with and mobilizing a politician's constituents, while political action committees (PACs) are organizations that can raise and donate unlimited amounts of money to support a candidate or issue. Advocacy advertising involves using media to influence public opinion on a candidate or issue, and lobbying involves advocating for specific policies or legislation to elected officials.

Question 7

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

While stakeholder representation on the board of directors is important, it is not a question that specifically assesses the importance of stakeholders' concerns to the corporation. The other four questions are more directly related to assessing stakeholder importance.

Question 8

According to the text, which one 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 of diversified ownership.
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 is 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 suggest that small firms are completely ignorant of risk management. In fact, it mentions that entrepreneurs in small firms are more willing to accept greater risk, which implies that they are aware of the risks involved in their ventures.

Question 9

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

Policies define the broad guidelines for the implementation of the selected strategic alternative, guiding decision-making and actions within an organization.

Question 10

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 11

What does a financial strategy examine?

Accepted Answer

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Question 12

Which one 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 false. Studies have shown that managers who own large amounts of stock in their firms are actually more likely to engage in risk-taking actions.

Question 13

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.

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Question 14

Distinguish between a market development and a product development strategy.

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Question 15

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 type of strategy used to influence a corporation's key stakeholders, such as governments and interest groups, to increase their support of corporate activities is known as a political strategy. This involves lobbying and other tactics to influence public policy and gain support for the company's objectives.

Question 16

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 be more familiar with the commonly used strategies in that industry and are more likely to choose them due to their previous experience and knowledge. The other options do not accurately reflect the impact of industry backgrounds on strategic choices.

Question 17

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) all of the above

Accepted Answer

Management can consider any of these options: ignoring the culture, managing around it, changing the culture, or changing the strategy.

Question 18

A new approach to evaluating alternatives under conditions of high environmental uncertainty that proposes it pays to have a broad range of options open is 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 proposes that under conditions of high environmental uncertainty, it is beneficial to have a broad range of options open. This approach incorporates the value of flexibility and adaptability when evaluating alternatives, allowing decision-makers to adjust to changing circumstances and make decisions based on the most up-to-date information. The other options listed, such as net present value and hurdle rate approach, do not specifically address the importance of having a range of options open under conditions of high uncertainty.

Question 19

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

Dialectical inquiry involves presenting two conflicting views in a debate format, which can help to avoid the consensus trap. This technique dates back to Plato and Aristotle and involves the presentation of a thesis and its antithesis to arrive at a synthesis, which is a new, more nuanced position that reconciles the two opposing viewpoints. The other answer options (A) devil's advocate, (B) Sloan's judgment, (C) sales presentation, and (E) scenario construction do not involve the presentation of two conflicting views in a debate format, and are therefore not the best choices to avoid the consensus trap.

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

Paul Nutt's research found that nearly 50% of decisions made by managers are failures. This highlights the importance of effective decision-making processes and the need to continuously evaluate and improve decision-making skills.

Quiz 8: Strategy Formulation: Functional Strategy and Strategic Choice

Discuss W. Edward Deming's position on sole sourcing.

Give an example of a technological leader.

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?

The first step in constructing a corporate scenario is to

What is a functional strategy?

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

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 the text, which one 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?

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

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

What does a financial strategy examine?

Which one of the following is NOT True of risk?

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

Distinguish between a market development and a product development strategy.

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

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

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 new approach to evaluating alternatives under conditions of high environmental uncertainty that proposes it pays to have a broad range of options open is 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?

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