Question 1

An effective vision statement will specify the market to be served.

Accepted Answer

The answer of An effective vision statement will specify the...

Question 2

A firm's mission tends to be enduring while its vision can change in light of changing environmental conditions.

Accepted Answer

The answer of A firm's mission tends to be enduring...

Question 3

The assumptions of the industrial organizational model and the resource-based model are contradictory. Therefore, organizational strategists must choose one or the other model as the basis for developing a strategic plan.

Accepted Answer

This statement is false. While the two models have different assumptions, it is possible for organizational strategists to use both models as complementary tools in developing a strategic plan. In fact, many scholars and practitioners advocate for an integrative approach that draws on both the industrial organizational model and the resource-based model.

Question 4

The resource-based model assumes that if firms have resources that are rare or costly to imitate, this is sufficient to form a basis for competitive advantage.

Accepted Answer

The answer of The resource-based model assumes that if firms...

Question 5

Organizational stakeholders are the firm's internal resources, capabilities, and core competencies that are used to accomplish what may at first appear to be unattainable goals in the competitive environment.

Accepted Answer

Organizational stakeholders are not the firm's internal resources, capabilities, and core competencies. They are individuals or groups who have an interest or are impacted by the operation of the organization, such as employees, customers, shareholders, suppliers, and the community.

Question 6

Hourly workers on the production line of a chicken-processing plant are considered organizational stakeholders.

Accepted Answer

Hourly workers on the production line are employees of the organization and therefore, considered stakeholders as they have a vested interest in the success and well-being of the company.

Question 7

Research shows that a greater percentage of a firm's profitability is explained by the I/O rather than the resource-based model.

Accepted Answer

The answer of Research shows that a greater percentage of...

Question 8

The degree to which the firm is dependent on a stakeholder group gives that stakeholder less influence.

Accepted Answer

The degree of dependence on a stakeholder group actually increases their influence over the firm. The more essential a stakeholder group is to the functioning of the firm, the more power they hold in making demands or influencing decision-making.

Question 9

Organizational mission statements typically do not include statements about profitability and earning above-average returns.

Accepted Answer

The answer of Organizational mission statements typically do not include...

Question 10

The new CEO of Opacity Enterprises is determined to make the long-established firm strategically flexible. The CEO feels that the employees of the company have the ability, training, and resources to engage in continuous learning. The main obstacle the CEO must face is inertia.

Accepted Answer

The statement mentions that the CEO wants to make the company strategically flexible and believes that the employees have the ability to engage in continuous learning. The main obstacle mentioned is inertia, which suggests that there might be resistance to change within the company. Therefore, option A is correct.

Question 11

The needs and desires of organizational stakeholders are inherently contradictory.

Accepted Answer

The needs and desires of different stakeholders (such as shareholders, employees, customers, and the community) often conflict with each other, and it can be challenging for the organization to satisfy everyone's interests simultaneously. For example, shareholders may demand higher profits, while employees may ask for better working conditions and wages, and customers may prioritize lower prices and better quality products. Organizations need to find a balance between these conflicting interests to achieve long-term sustainability and success.

Question 12

Although the fast food (or quick-service) industry is unattractive, McDonald's has earned above-average returns through product innovations, enhancing existing facilities, and buying properties outside the United States.

Accepted Answer

The answer of Although the fast food (or quick-service) industry...

Question 13

The CEO of Twin Spires, Inc., is emotionally and intellectually committed to using the resources of the firm to serve the needs of the natural gardening community by providing rare and native plants to individuals and nurseries around the United States. This commitment has carried the CEO through long periods of below average returns on investment. The perspective of the CEO of Twin Spires is consistent with the assumptions of the industrial organizational (I/O) model.

Accepted Answer

The CEO's commitment to serving the natural gardening community suggests a focus on social responsibility rather than maximizing profits, which is not consistent with the assumptions of the I/O model. The I/O model assumes that firms seek to maximize profits by focusing on efficiency, productivity, and competitive advantage.

Question 14

Organizational vision and mission statements require deep, critical, and reflective thinking to form them.

Accepted Answer

Developing a clear and meaningful vision and mission statement requires a thoughtful and deliberate process involving analysis, reflection, and strategic thinking. This involves considering the organization's purpose, values, goals, and stakeholders, as well as external factors such as the competitive landscape and the broader social context. It also requires engaging in dialogue and collaboration with various stakeholders to ensure alignment and buy-in. Overall, creating an effective vision and mission statement requires careful consideration and deep critical thinking.

Question 15

Relative power is the most critical criteria for prioritizing the demands of stakeholders.

Accepted Answer

Prioritizing the demands of stakeholders based on their relative power is important as it helps in managing the expectations and resolving conflicts between stakeholders effectively. Stakeholders with higher power have more influence and can impact the success or failure of a project or decision. Therefore, their demands must be given higher priority compared to those with lower power.

Question 16

The five forces model suggests that firms should target the industry with the highest potential for above-average returns and then implement either a cost-leadership strategy or a differentiation strategy.

Accepted Answer

The five forces model does suggest that firms should target industries with the highest potential for above-average returns but it also suggests that firms need to consider their competitive advantage (cost-leadership or differentiation) to successfully compete in that industry. Therefore, both strategies are recommended by the model.

Question 17

The uniqueness of a firm's resources and capabilities is the basis for a firm's strategy and determines its ability to earn above-average returns under the I/O view.

Accepted Answer

The statement describes the resource-based view of the firm rather than the I/O (industrial organization) view. Under the resource-based view, a firm's unique resources and capabilities are the basis for its competitive advantage and ability to earn above-average returns.

Question 18

The I/O (industrial organization) model assumes that the uniqueness of a firm's resources and capabilities are its main source of above-average returns.

Accepted Answer

The answer of The I/O (industrial organization) model assumes that...

Question 19

Resources are considered rare when they have no structural equivalent.

Accepted Answer

The answer of Resources are considered rare when they have...

Question 20

One capability characteristic of a firm with strategic flexibility is the capacity to learn.

Accepted Answer

A firm with strategic flexibility is able to adapt to changing circumstances, and this requires a capacity to learn from experience and to acquire new knowledge and skills. Without this capability, a firm may become stuck in rigid routines and be unable to respond to new challenges and opportunities.

Quiz 1: Strategic Management and Strategic Competitiveness