Question 1

Bossidy and Charan suggested that making realism a priority begins with leaders first being cautious and then being realistic only if the situation allows this.

Accepted Answer

Bossidy and Charan proposed that there are seven essential types of leader behaviors that are needed to fuel the engine of execution.Insisting on realism is among them.Many people want to avoid or shade reality,hiding mistakes or avoiding confrontations.Making realism a priority begins with the leaders being realistic themselves,and making sure realism is the goal of all dialogues in the organization.

Question 2

Nick, the R&D department manager of Precise, a manufacturer of high-quality watches for over 125 years, was told in a management meeting that the company's biggest competitor, Accurate Watches, is introducing a low-cost, yet attractive line of watches that will be sold in Walmart stores. As a result, the top management of Precise is pressuring Nick to lower the production costs on existing products and also to develop a line of watches that can be manufactured inexpensively to be marketed to a wider variety of customers at a much lower price. This is an example of a quality-leadership strategy.

Accepted Answer

This is an example of a cost-leadership strategy, not a quality-leadership strategy.

Question 3

In general, the BCG matrix suggests that an organization will do better in fast-growing markets in which it has a high market share rather in slow-growing markets in which it has a low market share.

Accepted Answer

The BCG matrix recommends organizations to focus on products or services in fast-growing markets where they have a high market share. High market share in a fast-growing market indicates that the organization is likely to generate significant profits, while low market share in a slow-growing market may lead to low profits or losses.

Question 4

A trend analysis is a hypothetical extension of a past series of events into the future.

Accepted Answer

A trend analysis is a statistical technique that involves studying past data to predict future trends. It is based on the assumption that past trends will continue into the future.

Question 5

In a single-product strategy, a company makes and sells only one product within its market, such as a farmer who grows and sells only corn.

Accepted Answer

In a single-product strategy, a company focuses on producing and selling only one product within its market, similar to a farmer who specializes in growing and selling only one crop.

Question 6

The Johnsons have owned a farm, Johnson Family Holdings Incorporated, for over 150 years. Al Johnson, president of Johnson Family Holdings, purchased a trucking company, shipping products for other farmers and businesses in their area. Later he opened a small store that carries a variety of products, and he even operates a small used auto dealership near the farm. This is an example of unrelated diversification.

Accepted Answer

Unrelated diversification involves expanding a business into areas that are not related to its original operations or industry. Al Johnson's trucking company, store, and auto dealership are all unrelated to their original farm business.

Question 7

The basic assumption with a trend analysis is that the picture of the present can be projected into the future. This is a bad assumption, because even if you have enough historical data, it is unproductive to assume.

Accepted Answer

A trend analysis is a hypothetical extension of a past series of events into the future.The basic assumption is that the picture of the present can be projected into the future.This is not a bad assumption,if you have enough historical data,but it is always subject to surprises.

Question 8

Because all work ultimately entails some human interaction, effort, or involvement, Bossidy and Charan stated that focusing on organization synergy is the most important process in strategy execution.

Accepted Answer

Because all work ultimately entails some human interaction,effort,or involvement,Bossidy and Charan stated that the people process is the most important.A company's overall ability to execute is a function of effectively executing according to three processes: people,strategy,and operations.

Question 9

Brilliante Pens, a 125-year-old pen manufacturer, has continued to market very high-quality pens, many over $1,000, to executives globally, always maintaining its reputation of superior value. Brilliante is an example of an organization utilizing a cost-focus strategy.

Accepted Answer

Brilliante Pens is an example of an organization utilizing a differentiation strategy, not a cost-focus strategy.

Question 10

Maria's Mart is a small store located along a major interstate highway that sells gas and diesel, food, souvenirs, DVD movies, and a wide variety of other items. There is even a café inside the store. Maria's Mart is an example of a diversification strategy.

Accepted Answer

Maria's Mart is diversifying its product offering by selling a variety of items, including gas, food, souvenirs, and more.

Question 11

Execution consists of questioning and putting issues on the back burner for a period of time to achieve results promised.

Accepted Answer

Execution consists of using questioning,analysis,and follow-through to mesh strategy with reality,align people with goals,and achieve results promised.

Question 12

Humberto, the owner of a small floral shop, is worried because he recently heard that a popular local grocery store, just two blocks away, is adding a floral department soon. Humberto is concerned because new competitors can take away customers from existing organizations.

Accepted Answer

It is true that new competitors can take away customers from existing organizations.

Question 13

According to the BCG matrix, organizations that have high growth and high market share are stars and should be kept.

Accepted Answer

The BCG matrix categorizes products or services as dogs, cash cows, question marks, or stars based on their market share and market growth. Stars have high market share in a high-growth market and are considered to be a beneficial investment for the organization.

Question 14

Contingency planning is also known as time management and compartmentalization.

Accepted Answer

Contingency planning is not the same as time management and compartmentalization. Contingency planning refers to the process of preparing for and responding to unexpected events or emergencies. Time management and compartmentalization are related to organizing and prioritizing tasks and responsibilities.

Question 15

Sandra displays and sells paintings and local art in her gallery, and in the evenings she teaches art classes in the back of her studio, a business named Sandra's Art School. This is an example of related diversification.

Accepted Answer

Sandra's two businesses, the gallery and the art school, are related as they both involve art and artistic skills. This type of diversification is known as related diversification.

Question 16

In the retail industry, time-series forecasts, a type of trend analysis, are used to predict long-term trends such as seasonal variations, as in Christmas sales versus summer sales.

Accepted Answer

Time-series forecasts are indeed used in the retail industry to predict long-term trends such as seasonal variations.

Question 17

Contingency planning is a process by which a company compares its performance with that of high-performing organizations.

Accepted Answer

Contingency planning is a process by which a company identifies potential risks and develops strategies to manage them. It does not involve comparing performance with high-performing organizations.

Question 18

In the Porter's model for industry analysis, business-level strategies originate in the three primary competitive forces of the firm's environment: threats of new entrants, bargaining power of suppliers, and threats of substitute products.

Accepted Answer

Strategic-management expert Michael Porter suggested in his Porter's model for industry analysis that business-level strategies originate in five primary competitive forces in the firm's environment: (1)threats of new entrants, (2)bargaining power of suppliers, (3)bargaining power of buyers, (4)threats of substitute products or services,and (5)rivalry among competitors.

Question 19

The concept that the economic value of separate, related businesses under one ownership and management is greater together than the businesses are worth separately is known as reduced risk.

Accepted Answer

The concept described in the statement is actually known as "synergy" or "economies of scale", not reduced risk.

Question 20

For over 20 years, ABC Manufacturing produced only one product, a car part for Moraine Assembly, the Moraine, Ohio, General Motors truck factory. So when GM closed the Moraine Assembly facility, ABC was an example of a vulnerable company.

Accepted Answer

The fact that ABC Manufacturing relied on producing only one product for one factory (Moraine Assembly, the Moraine, Ohio, General Motors truck factory) makes them vulnerable to the closure of that factory, as was the case when GM closed the Moraine Assembly facility.

Quiz 6: Strategic Management: How Exceptional Managers Realize a Grand Design