Question 1

An external threat in a SWOT analysis refers primarily to laws that would be broken by implementing a particular strategy.

Accepted Answer

The purpose of analyzing external threats is to assess what possible negative impact socioeconomic, political, environmental, and demographic factors may have on the organization. See "Conducting a SWOT Analysis."

Question 2

A vision should point to which activities an organization should take on and which activities it should avoid.

Accepted Answer

James R. Lucas, a specialist in vision formulation, writes that a carefully considered and articulated vision helps us know who we are and who we are not. The vision also points to what we do successfully and what we do not, which activities we should take on and which we should avoid. See "The Nature of Strategic Leadership."

Question 3

A recommended method of achieving revolutionary thinking is for a firm to engage in four types of incrementalism at the same time.

Accepted Answer

To be an industry leader, a company's leaders must think in revolutionary terms. Revolutionary companies such as Amazon.com and Netflix create the rules for others to follow. See "The Nature of Strategic Leadership."

Question 4

Strategic leadership is more concerned with goal setting than with inspiration.

Accepted Answer

Strategic leadership is the process of providing the direction and inspiration necessary to create or sustain an organization. See "The Nature of Strategic Leadership."

Question 5

A key characteristic of strategic thinking is that it involves high-level cognitive activity on the part of the leader.

Accepted Answer

Thinking strategically requires high-level cognitive skills, such as the ability to think conceptually, absorb and make sense of multiple trends, and condense all of this information into a straightforward plan of action. See "The Nature of Strategic Leadership."

Question 6

As a business owner, you are using the Hedgehog concept when you diversify into several unrelated businesses.

Accepted Answer

Corporate strategist Jim Collins introduced the Hedgehog concept: becoming very good at one thing in a world of companies that spread themselves into many areas where they lack depth. See "A Sampling of Business Strategies Formulated by Leaders."

Question 7

An organization's strategy is its:

Accepted Answer

A key leadership role is to form a strategy, an integrated, overall concept of how a firm will achieve its objectives. See "The Nature of Strategic Leadership."

Question 8

The business strategy of acquisition is often used to acquire new technology that a firm needs to broaden its product line.

Accepted Answer

A standard strategy for growth is for one company to purchase others. Growth in size is important, but companies may also purchase other companies to acquire a new technology or complete a product line. See "A Sampling of Business Strategies Formulated by Leaders."

Question 9

A major purpose of strategic leadership is to:

Accepted Answer

Strategic leadership is the process of providing the direction and inspiration necessary to create or sustain an organization. See "The Nature of Strategic Leadership."

Question 10

The knowledge creation component of knowledge management is used to spur innovation.

Accepted Answer

Knowledge creation is used to spur innovation. Programs for creating knowledge solicit ideas, insights, and innovations from many sources, including rank and file workers, customers, and business partners, instead of relying exclusively on the research and development staff. See "Knowledge Management and the Learning Organization."

Question 11

The knowledge application component of knowledge management deals with workers improving their job activities.

Accepted Answer

Knowledge application is the process of getting workers better at what they do. Many organizations have discovered that the most effective way of encouraging workers to apply knowledge is through basic practices such as mentoring, on-the-job training, and workshops. See "Knowledge Management and the Learning Organization."

Question 12

The business strategy of differentiation involves making a product or service unique by offering it at an unusually low price.

Accepted Answer

A differentiation strategy seeks to offer a product or service that the customer perceives as being different from available alternatives. The organization may use advertising, distinctive features, exceptional service, or new technology to gain this perception of uniqueness. See "A Sampling of Business Strategies Formulated by Leaders."

Question 13

A major contribution of knowledge management programs is that the electronic storage and retrieval of information makes it almost unnecessary for people to develop ideas by talking face-to-face.

Accepted Answer

Knowledge management (KM) deals with a cultural focus on knowledge sharing. Managing knowledge is an important leadership role because so few organizations make systematic use of the collective wisdom of employees. Loads of information is often collected in databases, and even through text messaging, but little systematic use is made of the information. See "Knowledge Management and the Learning Organization."

Question 14

An example of contrarian thinking on the part of the owner of a pizza chain might be, "Why bother diversifying into subs and calzones like most of our competition? Let's just focus on selling excellent pizza."

Accepted Answer

The owner of the pizza chain is engaged in contrarian thinking because he does not follow his competitors. Contrarian thinking, in which the leader rejects conventional wisdom, is much like the investor who trolls for hidden value in out-of-favor stocks. See "The Nature of Strategic Leadership."

Question 15

The purpose of the strategy of competitive advantage is to hire people away from competitors.

Accepted Answer

A powerful strategy for gaining competitive advantage is to build the organization with talented, well-motivated people at every level. Talented people may need some leadership direction, but they will think of new products and services and develop effective work processes. See "A Sampling of Business Strategies Formulated by Leaders."

Question 16

An example of a strategic alliance would be a train manufacturer and an airplane manufacturer working jointly to build a train that will travel without touching the rails.

Accepted Answer

A modern business strategy is to form alliances, or joint ventures, with other companies to exploit a market opportunity. Strategic alliances have become more common as leaders in the high-tech industry attempt to capitalize on the strengths of other companies. See "A Sampling of Business Strategies Formulated by Leaders."

Question 17

Asking what-if questions is part of formulating strategies.

Accepted Answer

Emphasizing the cognitive activity of the leader helps emphasize that the leader plays a major role in strategy formulation. Creative problem solving is also important because the strategic leader has to develop alternative courses of action for shaping the organization. Furthermore, asking what-if questions requires imagination. See "The Nature of Strategic Leadership."

Question 18

An advanced approach to knowledge management is to deliver useful information to workers just at the point when the information is needed.

Accepted Answer

A very practical form of knowledge management is to deliver information just in time, or at the point at which it is most needed. See "Knowledge Management and the Learning Organization."

Question 19

An aspect of effective knowledge management is that organization members acquire power by hoarding and acquiring knowledge.

Accepted Answer

When knowledge is managed effectively, information is shared as needed, whether it be printed, stored electronically, or rests in the brains of workers. See "Knowledge Management and the Learning Organization."

Question 20

Organizational learning is facilitated when workers use political skills to make connections with others and influence them in relation to useful knowledge.

Accepted Answer

For organizational learning to proceed smoothly, workers throughout the organization must have the political skills to make connections with and influence others. See "Knowledge Management and the Learning Organization."

Quiz 13: Strategic Leadership and Knowledge Management