Question 1

The goal of NAFTA is complete economic integration.

Accepted Answer

False

Question 2

Globalization is the integrated internationalization of markets and corporations.

Accepted Answer

Globalization means the interconnectedness of markets and businesses across countries and regions, leading to increased trade, investment, and economic growth.

Question 3

An example of an objective is "increased profitability," while an example of a goal is "to increase the firm's profitability in 2010 by 15% over 2009."

Accepted Answer

False

Question 4

One of the benefits of strategic management is a clearer sense of strategic vision for the firm.

Accepted Answer

Strategic management helps a firm to identify its mission, goals, and objectives, and create a plan to achieve them. This leads to a clearer sense of direction and vision for the firm.

Question 5

One tenet of the learning organization is to maintain stability.

Accepted Answer

One of the tenets of the learning organization is to embrace change and be adaptable, so maintaining stability would be counterproductive to this goal.

Question 6

Strategic flexibility is the ability to shift from one dominant strategy to another.

Accepted Answer

Strategic flexibility allows a company to adapt and change its dominant strategy as needed to respond to changes in its environment, such as competition, technology, or customer demands.

Question 7

A broad mission statement may limit the scope of a firm's activities in terms of the product or service offered.

Accepted Answer

A broad mission statement allows for a wide range of activities and can encompass various products or services. A narrow mission statement would limit the scope of a firm's activities.

Question 8

Climate change has become a growing concern for businesses to include in their corporate strategies.

Accepted Answer

Climate change has become a significant issue for businesses to address in their corporate strategies in recent years due to its potential impact on various aspects of business operations, including supply chain management, risk assessment, and reputation.

Question 9

In the externally oriented planning phase, plans are developed by heavily involving the input of managers from lower levels.

Accepted Answer

In the externally oriented planning phase, plans are developed by heavily involving the input of managers from higher levels, such as executives and specialists in the organization's industry or market.

Question 10

Strategic management is the set of managerial decisions that determines the short-term performance of a corporation.

Accepted Answer

Strategic management is the set of managerial decisions that determines the long-term performance of a corporation. It involves analyzing the company's strengths and weaknesses, identifying opportunities and threats in the market, and developing strategies to achieve goals and objectives.

Question 11

Knowing a company is mindful of its impact on the environment seldom changes consumer buying habits.

Accepted Answer

Studies and surveys have shown that an increasing number of consumers are considering the environmental impact of products and companies in their purchasing decisions, indicating that awareness of a company's environmental mindfulness can indeed influence consumer buying habits.

Question 12

Sustainability reflects business practices to manage the firm's triple bottom line.

Accepted Answer

Sustainability involves managing the triple bottom line, which includes economic, social, and environmental aspects of a business. Therefore, the statement is true.

Question 13

A Gallop study reported that companies that focused on business sustainability had 3.9 times the EPS growth rates as compared to organizations that did not focus on business sustainability.

Accepted Answer

According to the Gallop study, companies that focused on business sustainability had 3.9 times the EPS growth rates as compared to organizations that did not focus on business sustainability. Therefore, the statement is true.

Question 14

According to organizational learning theory, an organization uses knowledge to improve the fit between itself and its environment.

Accepted Answer

Organizational learning theory posits that organizations improve their performance by acquiring and using knowledge to adapt to changes in their environment, and thus achieve a better fit between their internal capabilities and external demands.

Question 15

As more industries become global, strategic management is becoming less important in positioning a company for long-term competitive advantage.

Accepted Answer

As more industries become global, strategic management is becoming even more important in positioning a company for long-term competitive advantage. While globalization brings new challenges and opportunities, it also requires companies to develop strategic plans that account for the complexities of operating in different markets and cultures, as well as the competitive pressures of a more interconnected world. Effective strategic management can help companies identify and exploit these opportunities, while minimizing the risks and challenges associated with global competition.

Question 16

Population ecology is a theory that proposes organizations can and do adapt to change by imitating other successful organizations.

Accepted Answer

Population ecology is a theory that suggests that organizations are subject to environmental factors and may not be able to adapt to change, leading to extinction. It does not propose that organizations can adapt by imitating successful organizations.

Question 17

One member of the European Union (EU)is Chile.

Accepted Answer

Chile is not a member of the European Union.

Question 18

General Electric led the transition from strategic planning to strategic management during the 1980s.

Accepted Answer

During the 1980s, General Electric (under the leadership of Jack Welch) was one of the first companies to fully embrace the concept of strategic management, which involves ongoing monitoring and adjustment of strategies in response to changing external and internal factors. This was a departure from the traditional strategic planning approach, which involved developing a long-term plan and sticking to it regardless of changes in the business environment.

Question 19

To be effective, strategic management must be a formal process.

Accepted Answer

Strategic management can be both formal and informal; its effectiveness depends on how well it aligns with the organization's goals, culture, and resources, rather than strictly on formality.

Question 20

The internal environment includes the variables that are within the short-run control of top management.

Accepted Answer

The answer of The internal environment includes the variables that...

Quiz 1: Basic Concepts in Strategic Management