Question 1

Effective organizational design means that firms must have ________ that are consistent with their strategy.
A) designs and plans
B) organizational structures and designs
C) adopters and designs
D) adopters and plans

Accepted Answer

Firms must have organizational structures and designs that are consistent with their strategy. In the rapidly changing competitive environments today, firms must ensure that their organizational boundaries (those internal to the firm and external) are more flexible and permeable.

Question 2

There are several perspectives of competition.One perspective is zero-sum thinking.Zero-sum thinking means that
A) all parts of the organization gain at no loss.
B) in order for someone to gain others must experience no gain or benefit.
C) one can only gain at the expense of someone else.
D) everyone in the organization shares gains and losses equally.

Accepted Answer

In the zero-sum view, the role of management is to look upon the various stakeholders as competing for the resources of the organization. In essence, the gain of one individual or group is the loss of another individual or group.

Question 3

New value creation is a major engine for economic growth and is the main focus of ________ strategy.
A) portfolio
B) corporate-level
C) business-level
D) entrepreneurial

Accepted Answer

Entrepreneurial activity aimed at new value creation is a major engine for economic growth. For entrepreneurial initiatives to succeed, viable opportunities must be recognized and effective strategies must be formulated.

Question 4

Managers should do more than focus on short-term financial performance.One concept that helps managers do this is stakeholder symbiosis.This means that
A) stakeholders are dependent on each other for their success.
B) stakeholders look out for their individual interests.
C) one can only gain at the expense of someone else.
D) all stakeholders want to maximize shareholder returns.

Accepted Answer

Organizations can achieve mutual benefit through stakeholder symbiosis, which recognizes that stakeholders are dependent upon each other for their success and well-being.

Question 5

Members of boards of directors are
A) appointed by the Securities and Exchange Commission.
B) elected by the shareholders as their representatives.
C) elected by the public.
D) only allowed to serve one term of four years.

Accepted Answer

The board of directors (BOD) consists of the elected representatives of the shareholders charged with ensuring that the interests and motives of management are aligned with those of the owners (i.e., shareholders).

Question 6

Learning organizations permit the entire organization to benefit from ________ talents.
A) internal and external
B) individual and collective
C) internal and collective
D) external and individual

Accepted Answer

Given rapid and unpredictable change, leaders must create a learning organization so that the entire organization can benefit from individual and collective talents.

Question 7

Corporate-level strategy looks at how to manage the ________ of its businesses to create synergies.
A) portfolio
B) stock prices
C) competitors
D) market pricing

Accepted Answer

Corporate-level strategy addresses a portfolio (or group) of businesses of the firm. It addresses:(1) what business (or businesses) should we compete in and (2) how can we manage this portfolio of businesses to create synergies among the businesses.

Question 8

Entering foreign markets requires firms to ascertain foremost how they will attain
A) market share.
B) low costs.
C) competitive advantage.
D) low returns on investment.

Accepted Answer

When firms enter foreign markets, they face both opportunities and pitfalls. Managers must decide not only on the most appropriate entry strategy but also how they will go about attaining competitive advantages in international markets.

Question 9

Strategy implementation can be the most difficult part of the strategic management process.Which of the following is not likely to be a cause of implementation failure?
A) leadership
B) competition
C) coordination and integration of activities within and outside of the firm
D) organizational commitment to excellence

Accepted Answer

Strategy implementation involves ensuring proper strategic controls and organizational designs, which includes establishing effective means to coordinate and integrate activities within the firm as well as with its suppliers, customers, and alliance partners. Leadership plays a central role, ensuring that the organization is committed to excellence and ethical behavior. It also promotes learning and continuous improvement and acts entrepreneurially in creating new opportunities. Competition is not part of the implementation plan of the firm. It is considered earlier in the strategic management process.

Question 10

In the interview with Admiral William H.McRaven,he suggests that several duties,responsibilities and organizational relationships are similar between his military career activity and his role as chancellor.He says that he is a servant leader.Which of the following lessons is not one from his military career?
A) Change cannot be made without understanding the organizational environment.
B) A leader must establish relationships early by reaching out to stakeholders within and external to the organization.
C) Communication and collaboration need to be reinforced by the organizational culture.
D) Actions must be moral, legal, ethical, and judgmental.

Accepted Answer

Actions must be moral, legal, and ethical. Judgment is important in maintaining personal integrity but actions should not be judgmental in nature.

Question 11

Two types of strategic control that firms must exercise for good strategy implementation are
A) informational and confrontational.
B) confrontational and behavioral.
C) behavioral and financial.
D) informational and behavioral.

Accepted Answer

Firms must exercise two types of strategic control. First, informational control requires that organizations continually monitor and scan the environment and respond to threats and opportunities. Second, behavioral control involves the proper balance of rewards and incentives as well as cultures and boundaries (or constraints).

Question 12

Corporate level strategy focuses on what businesses to compete in and
A) how business can be managed to achieve synergy.
B) how business can be managed to reduce synergy.
C) how the firm can work as a stand-alone entity.
D) how the firm can create more value by operating alone.

Accepted Answer

Corporate-level strategy focuses on two issues:(a) what businesses to compete in and (b) how businesses can be managed to achieve synergy; that is, they create more value by working together than by operating as stand-alone businesses.

Question 13

Strategies should be formulated that enhance foremost the ________ capacity of a firm.
A) innovative
B) learning
C) implementation
D) business-level

Accepted Answer

Firms must continually improve and grow as well as find new ways to renew their organizations. Corporate entrepreneurship and innovation provide firms with new opportunities, and strategies should be formulated that enhance the innovative capacity of the firm.

Question 14

Stakeholders are
A) a new way to describe stockholders.
B) individuals, groups, and organizations who have a stake in the success of the organization.
C) creditors who hold a lien on the assets of the organization.
D) attorneys and their clients who sue 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 15

An organization is responsible to many different entities.In order to meet the demands of these groups,organizations must participate in stakeholder management.Stakeholder management means that
A) interests of the stockholders are not the only interests that matter.
B) stakeholders are second in importance to the stockholders.
C) stakeholders and managers inevitably work at cross-purposes.
D) all stakeholders receive financial rewards.

Accepted Answer

A stakeholder can be defined as an individual or group, inside or outside the company, that has a stake in and can influence the performance of an organization. Each stakeholder group makes various claims on the company. Five key stakeholders have been identified in all organizations:owners, customers, suppliers, employees, and society at large. Successful firms go beyond an overriding focus on satisfying solely the interests of owners. Rather, they recognize the inherent conflicts that arise among the demands of the various stakeholders, as well as the need to endeavor to attain symbiosis among the various stakeholder groups.

Question 16

While working to prioritize and fulfill their responsibilities,members of the board of directors of an organization should
A) represent their own interests.
B) represent the interests of the shareholders.
C) direct all actions of the CEO.
D) emphasize the importance of short-term goals.

Accepted Answer

The board of directors (BOD) consists of the elected representatives of the shareholders charged with ensuring that the interests and motives of management are aligned with those of the owners (i.e., shareholders).

Question 17

Effective leaders set a direction and develop an organization so that it is committed to excellence and ________ behavior.
A) performant
B) strategic
C) ethical
D) positive

Accepted Answer

Effective leaders set a direction, design the organization, and develop an organization that is committed to excellence and ethical behavior.

Question 18

The three participants in corporate governance are the shareholders,
A) board of directors, and employees.
B) labor unions, and employees.
C) board of directors, and management.
D) banks and lending institutions, and management.

Accepted Answer

The primary participants in corporate governance are:(1) the shareholders, (2) the management (led by the chief executive officer), and (3) the board of directors.

Question 19

Employee stakeholders are concerned with
A) taxes, warranties, and regulations.
B) wages, benefits, and job security.
C) good citizenship behavior.
D) dividends.

Accepted Answer

Employees as a stakeholder group are concerned with wages, benefits, safe working environment, and job security.

Question 20

Procter and Gamble has perfected a technique for compacting cleaning powder into a liquid concentration.Consumers,retailers,shipping and wholesalers,and environmentalists all have benefited from the resulting change in consumer shopping habits and the revolution in industry supply-chain economics.According to the text,this is an example of
A) zero-sum relationship among stakeholders.
B) stakeholder symbiosis.
C) rewarding stakeholders.
D) emphasizing financial returns.

Accepted Answer

Organizations can achieve mutual benefit through stakeholder symbiosis, which recognizes that stakeholders are dependent upon each other for their success and well-being.

Quiz 1: Strategic Management: Creating Competitive Advantages

Effective organizational design means that firms must have ________ that are consistent with their strategy.

There are several perspectives of competition.One perspective is zero-sum thinking.Zero-sum thinking means that

New value creation is a major engine for economic growth and is the main focus of ________ strategy.

Managers should do more than focus on short-term financial performance.One concept that helps managers do this is stakeholder symbiosis.This means that

Members of boards of directors are

Learning organizations permit the entire organization to benefit from ________ talents.

Corporate-level strategy looks at how to manage the ________ of its businesses to create synergies.

Entering foreign markets requires firms to ascertain foremost how they will attain

Strategy implementation can be the most difficult part of the strategic management process.Which of the following is not likely to be a cause of implementation failure?

Two types of strategic control that firms must exercise for good strategy implementation are

Corporate level strategy focuses on what businesses to compete in and

Strategies should be formulated that enhance foremost the ________ capacity of a firm.

Stakeholders are

An organization is responsible to many different entities.In order to meet the demands of these groups,organizations must participate in stakeholder management.Stakeholder management means that

While working to prioritize and fulfill their responsibilities,members of the board of directors of an organization should

Effective leaders set a direction and develop an organization so that it is committed to excellence and ________ behavior.

The three participants in corporate governance are the shareholders,

Employee stakeholders are concerned with