Question 1

Which of the following is the best example of a well-stated financial objective?

Accepted Answer

Common financial objectives are: an x percent increase in annual revenues; annual increases in after-tax profits of x percent; annual increases in earnings per share of x percent; annual dividend increases of x percent; profit margins of x percent; an x percent return on capital employed (ROCE) or return on shareholders' equity (ROE) investment; increased shareholder value in the form of an upward-trending stock price; bond and credit ratings of x; internal cash flows of x dollars to fund new capital investment.

Question 2

A company needs financial objectives to:

Accepted Answer

Financial objectives relate to the financial performance targets management has established for the organization to achieve.

Question 3

The faster a company's business environment is changing only makes it imperative for strategy makers to:

Accepted Answer

The faster a company's business environment is changing, the more critical it becomes for its managers to be good entrepreneurs in diagnosing the direction and force of the changes under way and in responding with timely adjustments in strategy. Strategy makers have to pay attention to early warnings of future change and be willing to experiment with dare-to-be-different ways to establish a market position in that future.

Question 4

Which of the following is NOT an accurate description of the task of crafting a company's strategy?

Accepted Answer

Although senior managers have the lead responsibility for crafting and executing a company's strategy, it is the duty of a company's board of directors to exercise strong oversight and see that management performs the various tasks involved in each of the five stages of the strategy-making, strategy-executing process in a manner that best serves the interests of shareholders and other stakeholders.

Question 5

A "balanced scorecard" that includes both strategic and financial performance targets is a conceptually strong approach for judging a company's overall performance because:

Accepted Answer

A company's financial performance measures are really lagging indicators that reflect the results of past decisions and organizational activities. But a company's past or current financial performance is not a reliable indicator of its future prospects-poor financial performers often turn things around and do better, while good financial performers can fall upon hard times. The best and most reliable leading indicators of a company's future financial performance and business prospects are strategic outcomes that indicate whether the company's competitiveness and market position are stronger or weaker..

Question 6

A company that pursues and achieves strategic objectives:

Accepted Answer

A stronger market standing and greater competitive vitality- especially when accompanied by competitive advantage-is what enables a company to improve its financial performance.

Question 7

The task of stitching together a strategy:

Accepted Answer

The task of stitching a strategy together entails addressing a series of "hows": how to attract and please customers, how to compete against rivals, how to position the company in the marketplace, how to respond to changing market conditions, how to capitalize on attractive opportunities to grow the business, and how to achieve strategic and financial objectives.

Question 8

Adopting a set of "stretch" financial and "stretch" strategic objectives:

Accepted Answer

Challenging company personnel to go all out and deliver "stretch" gains in performance pushes an enterprise to be more inventive, to exhibit more urgency in improving both its financial performance and its business position, and to be more intentional and focused in its actions.

Question 9

When trade-offs have to be made between achieving long-term and achieving short-term objectives:

Accepted Answer

When trade-offs have to be made between achieving long-term objectives and achieving short-term objectives, long-term objectives should take precedence (unless the achievement of one or more short-term performance targets has unique importance).

Question 10

Perhaps the most reliable way for a company to improve its financial performance over time is to:

Accepted Answer

The best and most reliable leading indicators of a company's future financial performance and business prospects are strategic outcomes that indicate whether the company's competitiveness and market position are stronger or weaker. The accomplishment of strategic objectives signals that the company is well positioned to sustain or improve its performance.

Question 11

Strategic intent refers to a situation where a company:

Accepted Answer

A company exhibits strategic intent when it relentlessly pursues an ambitious strategic objective, concentrating the full force of its resources and competitive actions on achieving that objective.

Question 12

Strategy-making is:

Accepted Answer

As a general rule, strategy making must start at the top of the organization and then proceed downward from the corporate level to the business level and then from the business level to the associated functional and operating levels.

Question 13

Masterful strategies come from:

Accepted Answer

Masterful strategies come from doing things differently from competitors where it counts-out-innovating them, being more efficient, being more imaginative, adapting faster-rather than running with the herd. Good strategy making is therefore inseparable from good business entrepreneurship. One cannot exist without the other.

Question 14

Strategic objectives:

Accepted Answer

Strategic objectives relate to target outcomes that indicate a company is strengthening its market standing, competitive position, and future business prospects.

Question 15

A "balanced scorecard" for measuring company performance:

Accepted Answer

The Balanced Scorecard is a widely used method for combining the use of both strategic and financial objectives, tracking their achievement, and giving management a more complete and balanced view of how well an organization is performing.

Question 16

Which of the following is NOT an advantage of setting "stretch" objectives?

Accepted Answer

One of the best ways to promote outstanding company performance is for managers to deliberately set performance targets high enough to stretch an organization to perform at its full potential and deliver the best possible results. Challenging company personnel to go all out and deliver "stretch" gains in performance pushes an enterprise to be more inventive, to exhibit more urgency in improving both its financial performance and its business position, and to be more intentional and focused in its actions.

Question 17

Managerial jobs with strategy-making responsibility:

Accepted Answer

In most of today's companies, crafting and executing strategy is a collaborative team effort in which every company manager plays a strategy-making role-ranging from minor to major-for the area he or she heads.

Question 18

Company objectives:

Accepted Answer

Company objectives need to be broken down into performance targets for each of the organization's separate businesses, product lines, functional departments, and individual work units. Employees within various functional areas and operating levels will be guided much better by specific objectives relating directly to their departmental activities than broad organizational-level goals.

Question 19

A company needs performance targets or objectives:

Accepted Answer

Objective setting should not stop with top management's establishing of companywide performance targets. Company objectives need to be broken down into performance targets for each of the organization's separate businesses, product lines, functional departments, and individual work units. Employees within various functional areas and operating levels will be guided much better by specific objectives relating directly to their departmental activities than broad organizational-level goals.

Question 20

Which of the following is the best example of a well-stated strategic objective?

Accepted Answer

Common strategic objectives are: winning an x percent market share; achieving lower overall costs than rivals; overtaking key competitors on product performance, quality, or customer service; deriving x percent of revenues from the sale of new products introduced within the past five years; having broader or deeper technological capabilities than rivals; having a wider product line than rivals; having a better-known or more powerful brand name than rivals; having stronger national or global sales and distribution capabilities than rivals; consistently getting new or improved products to market ahead of rivals.

Quiz 2: Charting a Companys Direction: Its Vision, Mission, Objectives, Andstrategy