Question 1

Strategic management is concerned with the analysis of strategic goals as stated in the vision, mission, and strategic objectives of a firm.

Accepted Answer

Strategic management is concerned with the analysis of strategic goals (vision, mission, and strategic objectives) along with the analysis of the internal and external environments of the organization.

Question 2

In the Mintzberg model, organizational decisions determined only by analysis are intended strategy.

Accepted Answer

Henry Mintzberg, a management scholar at McGill University, argues that viewing the strategic management process as one in which analysis is followed by optimal decisions and their subsequent meticulous implementation neither describes the strategic management process accurately nor prescribes ideal practice. In the Mintzberg model, decisions following from analysis constitute the intended strategy of the firm.

Question 3

Only shareholders in a publicly held company are stakeholders because they are the only group that has a stake in the success of the organization.

Accepted Answer

Stakeholders are those individuals, groups, and organizations that have a stake in the success of the organization, including owners (shareholders in a publicly held corporation), employees, customers, suppliers, the community at large, and so on.

Question 4

According to Peter Senge, a leading strategic management author, creative tension results from the need to incorporate both short-term and long-term perspectives in strategic management.

Accepted Answer

Strategic management requires incorporating both short-term and long-term perspectives. Peter Senge, a leading strategic management author, has referred to this need as a creative tension. That is, managers must maintain both a vision for the future of the organization and a focus on its present operating needs.

Question 5

Focusing on the short term and efficiency is always a bad management principle.

Accepted Answer

Successful managers must make many trade-offs. It is central to the practice of strategic management. At times, managers must focus on the short term and efficiency.

Question 6

Shareholders expect only short-term value and therefore good managers should only focus on meeting short-term performance targets.

Accepted Answer

Managers must maintain both a vision for the future of the organization and a focus on its present operating needs. Strategic management requires incorporating both short-term and long-term perspectives.

Question 7

Both the internal and external environments of a firm must be analyzed as well as the goals of the firm before managers can formulate and implement appropriate strategies.

Accepted Answer

Many strategies fail because managers may want to formulate and implement strategies without a careful analysis of the overarching goals of the organization and without a thorough analysis of its external and internal environments.

Question 8

Hewlett-Packard's failure and success under the leadership first of Carly Fiorina and then of Mark Hurd was said to be a direct result of the quality of leadership of each of these CEOs. According to the text, this would be an example of the "romantic" perspective of leadership.

Accepted Answer

In the romantic view of leadership, the implicit assumption is that the leader is the key force in determining an organization's success or lack thereof. The Board of Directors fired CEO Carly Fiorina in 2004 and HP's stock increased immediately by 7 percent. Upon the sudden resignation of her successor, Mark Hurd in 2010, HP's stock price dropped 12 percent almost immediately.

Question 9

The three interrelated and principal activities of strategic management are: strategy analysis, strategy formulation, and strategy implementation.

Accepted Answer

Strategic management is defined by the text as consisting of the analyses, decisions, and actions an organization undertakes in order to create and sustain competitive advantage.

Question 10

Making trade-off decisions between effectiveness and efficiency is central to the practice of strategic management.

Accepted Answer

The fourth attribute of strategic management is that it involves the recognition of trade-offs between effectiveness and efficiency. Some authors have referred to this as the difference between doing the right thing (effectiveness) and doing things right (efficiency).

Question 11

Management innovations such as total quality, just-in-time, benchmarking, business process reengineering, and outsourcing are important, but not enough for building sustainable competitive advantage.

Accepted Answer

Sustainable competitive advantage cannot be achieved through operational effectiveness alone. Popular management innovations of the last two decades like total quality, just-in-time, benchmarking, business process reengineering, and outsourcing are concerned with operational effectiveness.

Question 12

Ambidexterity refers to a manager's challenge to align resources, without having to take advantage of existing product markets or to proactively explore new opportunities.

Accepted Answer

Ambidexterity is the challenge managers face in both aligning resources to take advantage of existing product markets and proactively exploring new opportunities.

Question 13

Strategy analysis is the study of the external environments of the firm.

Accepted Answer

Strategy analysis is study of the external and internal environments of a firm, and their fit with organizational vision and goals.

Question 14

Strategic management is not concerned with how to create competitive advantage in the marketplace.

Accepted Answer

The essence of strategic management is the study of why some firms outperform others. Managers need to determine how a firm is to compete so that it can obtain advantages that are sustainable over a lengthy period of time. That means focusing on how to compete in order to create competitive advantages in the marketplace and how to create competitive advantages in the marketplace that are unique, valuable, and difficult for rivals to copy or substitute.

Question 15

According to Henry Mintzberg, a management scholar, most firms realize their original intended strategy.

Accepted Answer

Henry Mintzberg states that the intended strategy rarely survives in its original form. Unforeseen environmental developments, unanticipated resource constraints, or changes in managerial preferences may result in at least some parts of the intended strategy remaining unrealized. On the other hand, good managers will want to take advantage of a new opportunity presented by the environment, even if it was not part of the original set of intentions.

Question 16

According to a recent study involving 41 business units in 10 multinational companies, one ambidextrous behavior exhibited by managers is that of being brokers who are always looking to build internal networks.

Accepted Answer

As an example of this ambidextrous behavior, a Canadian plant manager connected a regional manager, who was looking for ways to build his business, with an $10 million investment opportunity in St Louis for a new tape manufacturing plant.

Question 17

Strategic management consists of the analyses, decisions, and actions an organization undertakes in order to create and sustain competitive advantages.

Accepted Answer

According to the textbook, this is the definition of strategic management.

Question 18

The final realized strategy of a firm is a combination of deliberate and emergent strategies.

Accepted Answer

Realized strategy is that strategy of a firm in which organizational decisions are determined by both analysis and unforeseen environmental developments, unanticipated resource constraints, and/or changes in managerial preferences.

Question 19

Focusing on a single stakeholder is a good strategic principle for managers to follow.

Accepted Answer

Stakeholders are those individuals, groups, and organizations that have a "stake" in the success of the organization. Managers will not be successful if they focus on a single stakeholder.

Question 20

Strategic management is only concerned with short-term perspectives.

Accepted Answer

Strategic management requires incorporating both short-term and long-term perspectives.

Quiz 1: Strategic Management: Creating Competitive Advantages