Question 1

The real-options approach used by Chevron for bidding on petroleum reserves improves organizational performance.

Accepted Answer

The real-options approach allows Chevron to make more informed investment decisions by considering the value of flexibility and the ability to adjust strategies based on changing market conditions. This can ultimately lead to better performance for the organization.

Question 2

The attractiveness of a strategic alternative is affected by its perceived compatibility with the key stakeholders in a corporation's task environment.

Accepted Answer

The perceived compatibility with key stakeholders can greatly impact the attractiveness of a strategic alternative, making it either more or less appealing to implement.

Question 3

Corporate scenarios are pro forma balance sheets and income statements that forecast the effect each alternative strategy and its various programs will likely have on division and corporate return on investment.

Accepted Answer

Corporate scenarios are indeed pro forma balance sheets and income statements that forecast the impact of different strategies and programs on division and corporate ROI.

Question 4

"The customer is always right" is an example of a policy in Nordstrom's.

Accepted Answer

This statement is a well-known policy in Nordstrom's and reflects their commitment to customer service.

Question 5

A strategy's compatibility with the corporate culture has little likelihood of impacting its success.

Accepted Answer

A strategy's compatibility with the corporate culture is an important factor in its success. If a strategy is not aligned with the values, beliefs, and norms of the organization, it may be met with resistance or fail to gain buy-in from employees. Similarly, if a culture is resistant to change or lacks innovation, it may be difficult to implement new strategies that require a shift in mindset or behavior. Therefore, ensuring compatibility between strategy and culture is crucial for success.

Question 6

There is mounting evidence that when an organization is facing a dynamic environment,the best strategic decisions are arrived at through consensus when everyone agrees on one alternative.

Accepted Answer

While consensus can be valuable in certain situations, in a dynamic environment, relying solely on consensus for strategic decisions can be slow and inhibit the ability to respond quickly to changes. Diverse viewpoints and a more agile decision-making process, possibly led by a smaller, empowered team or leader, are often more effective in rapidly changing contexts.

Question 7

Risk is composed not only of the probability that the strategy will be effective but also of the amount of assets the corporation must allocate to that strategy and the length of time the assets will be unavailable for other uses.

Accepted Answer

This statement is true. Risk in a business strategy is not just about the likelihood of success but also involves the resources that need to be allocated to the strategy and the duration of time that these resources will be unavailable for other uses.

Question 8

What is a corporate scenario? What are the three steps in their construction?

Accepted Answer

The answer of What is a corporate scenario? What are...

Question 9

Even the most attractive strategic alternative might not be selected if it is contrary to the needs and desires of important top managers.

Accepted Answer

Top managers play a significant role in the decision-making process of an organization. Their preferences and priorities can influence which strategic alternative is selected, even if it may not be the most attractive option. Ignoring their needs and desires can result in resistance and pushback, making it difficult to implement and execute the chosen strategy.

Question 10

In evaluating a strategic alternative,if there is little fit with the company's culture,what are management's options?

Accepted Answer

The answer of In evaluating a strategic alternative,if there is...

Question 11

Some executives show a self-serving tendency to attribute the firm's problems not to their own poor decisions,but to environmental events out of their control such as government policies or a poor economic climate.

Accepted Answer

This statement is true. Some executives have a tendency to shift the blame for the firm's problems to external factors rather than taking responsibility for their own poor decisions.

Question 12

In a dynamic environment,using consensus to arrive at a strategic decision is not recommended.Why? What two techniques can strategic managers use to avoid the consensus trap?

Accepted Answer

The answer of In a dynamic environment,using consensus to arrive...

Quiz 8: Strategy Formulation: Functional Strategy and Strategic Choice