Question 1

For a strategist,which of the following is not an implication of effective strategic management?
A) The difference between a firm's success and failure lies in its strategy.
B) The principles of strategic management can be applied universally to all organizations.
C) A firm's performance is determined by a set of independent factors, which includes firm and industry effects.
D) It is necessary to maintain an awareness of key stakeholders and how they can affect or be affected by managerial actions.

Accepted Answer

Firm and industry effects are interdependent. Both are relevant in determining firm performance.

Question 2

The _____ is a model that links strategy analysis,strategy formulation,and strategy implementation,which together helps managers plan and implement a strategy that can improve performance and result in competitive advantage.
A) Ansoff's growth strategy matrix
B) AFI strategy framework
C) Sarbanes-Oxley Act
D) stakeholder impact analysis

Accepted Answer

The AFI strategy framework is a model that links three interdependent strategic management tasks-analyze, formulate, and implement-that, together, help managers plan and implement a strategy that can improve performance and result in competitive advantage.

Question 3

Hewlett-Packard was not able to maintain its competitive advantage because it did not
A) produce high-quality products at a low price.
B) allow the freedom to explore new ideas.
C) provide lifetime employment and generous benefits for employees.
D) effectively address the challenges of mobile computing.

Accepted Answer

Once a leading technology company, Hewlett-Packard was known for innovation, resulting in superior products. The "HP way of management" included lifetime employment, generous benefits, work/life balance, and freedom to explore ideas, among other perks. However, HP has not been able to address the competitive challenges of mobile computing or business IT services effectively.

Question 4

Which of the following tasks in the AFI strategy framework involves putting the formulated strategy into practice through organizational structure,culture,and controls?
A) strategy formulation
B) strategy implementation
C) strategy analysis
D) strategy evaluation

Accepted Answer

Strategic implementation, the "I" in the AFI strategy framework, includes organizing the firm (its structure, culture, and controls) to put the formulated strategy into practice.

Question 5

According to AFI strategy framework,in which of the following tasks of strategic management is a firm's vision,mission,and values identified?
A) strategy control
B) strategy analysis
C) strategy formulation
D) strategy implementation

Accepted Answer

In strategy analysis the topics covered are: Strategic leadership and the strategy process: What roles do strategic leaders play? What are the firm's vision, mission, and values? What is the firm's process for creating strategy (how does strategy come about)?

Question 6

Which of the following is an accurate statement about the relationship between firm effects and industry effects?
A) Firm effects deal with the action of competitors; industry effects deal with internal circumstances.
B) Firm effects deal with a manager's actions; industry effects deal with external circumstances.
C) Firm effects deal with a manager's actions; industry effects deal with internal circumstances.
D) Firm effects deal with the action of competitors; industry effects deal with external circumstances.

Accepted Answer

Firm effects deal with a manager's actions, such as the actions that managers take toward employees. On the other hand, industry effects deal with external circumstances, such as types of products and services offered.

Question 7

Managers use the AFI strategy framework primarily to
A) help their business achieve and sustain competitive parity.
B) minimize the wealth of their shareholders.
C) help reduce the economic contribution of their business.
D) explain and predict differences in firm performance.

Accepted Answer

Managers use the AFI strategy framework to do two things: (1) to explain and predict differences in firm performance, and (2) to help managers formulate and implement a strategy that results in superior performance.

Question 8

The U.S.government legitimized claims by thousands of businesses and individuals in the aftermath of the BP oil spill in the Gulf of Mexico,causing the claims to become of great urgency to BP.This best represents the process of
A) addressing stakeholder concerns.
B) identifying stakeholders.
C) establishing competitive parity.
D) implementing a cost-leadership strategy.

Accepted Answer

While addressing stakeholder concerns, a firm asks, "What should we do to effectively address any stakeholder concerns?" In the last step in stakeholder impact analysis, managers need to decide the appropriate course of action for the firm, given all of the preceding factors. Thinking about the attributes of power, legitimacy, and urgency helps to prioritize the legitimate claims and to address them accordingly.

Question 9

In the AFI strategy framework,strategy analysis primarily involves
A) evaluating the effects of internal resources and core competencies on a firm's potential to gain and sustain a competitive advantage.
B) designing a business, corporate, and global strategy to gain and sustain a competitive advantage.
C) organizing a firm in order to effectively put the formulated strategy into practice.
D) deciding the type of corporate governance that would be most effective in the implementation of a strategy.

Accepted Answer

Strategy analysis involves internal analysis, that is, what effects do internal resources, capabilities, and core competencies have on the firm's potential to gain and sustain a competitive advantage?

Question 10

The society and the shareholders just expect,and do not mandatorily require,a firm to
A) pay fair dividends and returns to the investors.
B) follow the employment laws of a country.
C) provide safe and quality products to the customers.
D) pay its workers more than the minimum living wage.

Accepted Answer

Society and shareholders require economic and legal responsibilities. Ethical and philanthropic responsibilities result from a society's expectations toward business. A firm's ethical responsibilities go beyond its legal responsibilities.

Question 11

During strategy implementation,managers primarily focus on deciding the
A) type of corporate governance that is most effective and ways in which it can put the formulated strategy into practice.
B) industries and markets the firm should compete in to be able to gain and sustain a competitive advantage.
C) relationship between competitive advantage and firm performance.
D) role strategic leaders should play in gaining and sustaining a competitive advantage.

Accepted Answer

During strategy implementation, managers focus on the following questions: How should the firm organize to put the formulated strategy into practice? What type of corporate governance is most effective? How does the firm anchor strategic decisions in business ethics?

Question 12

Which of the following is an example of a firm's internal stakeholders?
A) customers
B) creditors
C) stockholders
D) suppliers

Accepted Answer

A firm's internal stakeholders include stockholders as well as employees (including executives, managers, and workers), and board members.

Question 13

Which of the following is not one of the three interdependent tasks of strategic management?
A) analyze
B) formulate
C) estimate
D) implement

Accepted Answer

The three interdependent tasks of strategic management are: (1) analyze, (2) formulate, and (3) implement.

Question 14

Which of the following is not an example of a black swan event?
A) fall of the Berlin Wall
B) 9/11 terrorist attacks
C) Fukushima nuclear disaster
D) election of President Reagan

Accepted Answer

Black swans are highly improbable events that have a major impact on business. Ronald Reagan being elected president was not a highly improbable event.

Question 15

Which of the following stages in the AFI strategy framework involves designing a business,corporate,and global strategy?
A) strategy control
B) strategy implementation
C) strategy analysis
D) strategy formulation

Accepted Answer

Strategy formulation involves formulating a business strategy: How should the firm compete (cost leadership, differentiation, or integration)?; Corporate strategy: Where should the firm compete (industry, markets, and geography)?; and, Global strategy: How and where (local, regional, national, and international) should the firm compete around the world?

Question 16

Which of the following is an element of good strategy?
A) an explanation of the firm's advantages over competitors
B) a guiding policy to address employee satisfaction
C) a set of coherent actions to implement the firm's guiding policy
D) an approach that underestimates the competition

Accepted Answer

A good strategy consists of a diagnosis of the competitive challenge, a guiding policy to address the competitive challenge, a set of coherent actions to implement the firm's guiding policy.

Question 17

Which of the following statements is true of the social responsibilities of a business?
A) A firm's ethical responsibilities go beyond its legal responsibilities.
B) Shareholders mandatorily require a firm to perform its ethical and philanthropic responsibilities.
C) Ethical responsibilities are the foundational building block of a firm's social responsibility.
D) Legal responsibilities are often subsumed under the idea of corporate citizenship, reflecting the notion of voluntarily giving back to society.

Accepted Answer

A firm's ethical responsibilities go beyond its legal responsibilities. They embody the full scope of expectations, norms, and values of its stakeholders. Managers are called upon to do what society deems just and fair.

Question 18

Which of the following is an example of competitive parity?
A) A firm manufactures higher-quality wall clocks than its competitors
B) A firm provides wall clocks that its consumers value more than other wall clocks
C) A firm sells wall clocks at a lower price than its competitors
D) A firm produces wall clocks at the same rate as its competitors

Accepted Answer

Two or more firms perform at the same level have competitive parity. Therefore, a firm has competitive parity if it produces wall clocks at the same rate as its competitors.

Question 19

Which of the following responsibilities results from a society's mere expectations of a business and not because the society and the shareholders mandatorily require the business to demonstrate it?
A) economic responsibilities
B) legal responsibilities
C) contract responsibilities
D) philanthropic responsibilities

Accepted Answer

Society and shareholders require economic and legal responsibilities. Ethical and philanthropic responsibilities result from a society's expectations toward business.

Question 20

In the final step of the stakeholder impact analysis,a firm
A) identifies its stakeholders' interests and claims.
B) differentiates its internal stakeholders from its external stakeholders.
C) recognizes the opportunities and threats stakeholders present.
D) decides a course of action to address the stakeholders' concerns.

Accepted Answer

In the final step of the stakeholder impact analysis, the firm asks, "What should we do to effectively address any stakeholder concerns?"

Quiz 1: What Is Strategy

For a strategist,which of the following is not an implication of effective strategic management?

The _____ is a model that links strategy analysis,strategy formulation,and strategy implementation,which together helps managers plan and implement a strategy that can improve performance and result in competitive advantage.

Hewlett-Packard was not able to maintain its competitive advantage because it did not

Which of the following tasks in the AFI strategy framework involves putting the formulated strategy into practice through organizational structure,culture,and controls?

According to AFI strategy framework,in which of the following tasks of strategic management is a firm's vision,mission,and values identified?

Which of the following is an accurate statement about the relationship between firm effects and industry effects?

Managers use the AFI strategy framework primarily to

The U.S.government legitimized claims by thousands of businesses and individuals in the aftermath of the BP oil spill in the Gulf of Mexico,causing the claims to become of great urgency to BP.This best represents the process of

In the AFI strategy framework,strategy analysis primarily involves

The society and the shareholders just expect,and do not mandatorily require,a firm to

During strategy implementation,managers primarily focus on deciding the

Which of the following is an example of a firm's internal stakeholders?

Which of the following is not one of the three interdependent tasks of strategic management?

Which of the following is not an example of a black swan event?

Which of the following stages in the AFI strategy framework involves designing a business,corporate,and global strategy?

Which of the following is an element of good strategy?

Which of the following statements is true of the social responsibilities of a business?

Which of the following is an example of competitive parity?

Which of the following responsibilities results from a society's mere expectations of a business and not because the society and the shareholders mandatorily require the business to demonstrate it?

In the final step of the stakeholder impact analysis,a firm