Question 1

One of Henry Mintzberg's criticisms of the strategic planning process is that:
A) It does not allow for strategic thinking.
B) It rarely, if ever, gets implemented.
C) It is too reliant on employee feedback.
D) Managers do not like to use it.

Accepted Answer

Mintzberg argues that thinking is more important than producing a plan.

Question 2

When strategizing for competitive advantage,managers rely on different approaches that can complement one other.Which one of the following is NOT an approach a firm may use?
A) Strategic planning
B) Strategy as planned emergence
C) Strategy implantation
D) Scenario planning

Accepted Answer

Strategy implantation is not an approach for competitive advantage.

Question 3

Questions such as "What resources do we need if this happens?" and "How can we shape our anticipated future environment?" are performed under what stage of the AFI framework?
A) The formulation stage
B) The forecasting stage
C) The installation stage
D) The iteration stage

Accepted Answer

These questions are important in the formulation stage before implementation begins.

Question 4

McKesson,a $110 billion health care company,is provided as an example firm with clear and compelling organizational values.All of the following items are examples of living the values EXCEPT which one?
A) The ethics and behavior models are the cornerstones of building the business.
B) ICARE values are printed out on all their marketing materials for new customers.
C) Employees worked long overtime hours to meet urgent needs during hurricane Katrina.
D) The ICARE values serve as a framework for how to deal with their customers.

Accepted Answer

Printing out a list of values on marketing materials could be an indication that the firm is using its values purely for public relations and not really living them inside the firm. Therefore, it is not an example of "living" the values. It does not, however, preclude that the firm could be living the values if it is also performing the other actions noted here.

Question 5

A set of values illustrates the firm's __________.
A) choice of where to do business
B) definition of what business is and why it does it
C) ethical standards and norms
D) positioning of what the business did in the past

Accepted Answer

Values are ethical standards and norms that should govern the behavior of the individuals within the firm.

Question 6

Google's decision in 2010 to pull its servers out of mainland China and operate out of Hong Kong was a response to what?
A) A drive to increase profits with a broader footprint in Asia.
B) A request from the Chinese government to leave the country.
C) A move to cut costs due to intense competition with the local search firm Baidu.
D) Google's decision to stop using self-censoring, as required by the Chinese government to stay operating in mainland China.

Accepted Answer

Google decided it could no longer support censoring because it conflicted with their organizational values such as "democracy on the web works."

Question 7

To be effective,firms must implement their mission statements in strategic actions.The decision that Boeing made to develop the 787 Dreamliner is an example of what?
A) A costly and long-term strategic commitment
B) An attempt to win U.S. military contracts
C) The results of an emergent strategy
D) A customer-oriented mission statement

Accepted Answer

Missions must be supported with actions that are costly, long-term, and difficult to reverse strategic commitments to avoid being just hollow words.

Question 8

The 2001 collapse of Enron resulted in the loss of jobs for over 20,000 employees.Arthur Anderson was also impacted by the Enron collapse and 30,000 employees lost their jobs.Why was Arthur Anderson so adversely affected by Enron's collapse?
A) Enron was a major client and Arthur Anderson could not survive the business downturn from the bankruptcy.
B) The firm was an accomplice in the accounting scandal at Enron.
C) Arthur Anderson was the target of a hostile takeover directly after Enron's collapse.
D) The accounting firm decided to get out of the entire energy sector as a result of the collapse of Enron.

Accepted Answer

Anderson's reputation could not recover from the actions of a few who worked closely with Enron to advise them on illegal accounting practices.

Question 9

The 2001 collapse of Enron,resulting in one of the biggest bankruptcies in U.S.history,demonstrates that:
A) An organization may have a mission statement promoting ethical behavior, but it must have strong organizational values to guide the behavior of employees.
B) Employees observe managerial behavior and tend to follow it.
C) Having strong ethical values inside an organization is important for long-term success.
D) All of these.

Accepted Answer

Enron is a case of great public relations around its mission and values but limited leadership from the top to support them.

Question 10

The fact that many organizations were caught off-guard by the recent economic downturn reflects that:
A) It is impossible to prepare for future situations.
B) There is a tendency to ignore negative outcomes when creating future scenarios.
C) "What if" questions are actually not that useful.
D) Managers usually wait until it is too late to implement strategic initiatives.

Accepted Answer

Pessimistic scenarios are sometimes not thoroughly explored in scenario analysis.

Question 11

Strategic planning differs from scenario planning in that:
A) Strategic planning is long-term planning; scenario planning is not.
B) Strategic planning is bottom-up from the employees, and scenario planning is top-down from the CEO.
C) Strategic planning is performed by many layers in the organization, while scenario planning is limited to top executives.
D) Strategic planning assumes that future success can be predicted; scenario planning allows for more unforeseen events.

Accepted Answer

The primary difference between strategic planning and scenario planning is a difference in the underlying assumptions about the future. Strategic planning framework relies on it being more predictable while scenario planning is more dependent on flexibility to unexpected events.

Question 12

A dominant strategic plan in the scenario planning tool is which of the following managerial options?
A) It most accurately matches reality.
B) It matches the intended strategy.
C) It will be the only correct strategic plan.
D) It will be the only correct competitive advantage plan.

Accepted Answer

The dominant plan is the one viewed as the most realistic of the options considered by management.

Question 13

When managers envision different what-if scenarios to anticipate possible futures,the approach that is used is called:
A) Strategic planning
B) Strategy as planned emergence
C) Strategy implantation
D) Scenario planning

Accepted Answer

Scenario planning involves studying different what-if scenarios.

Question 14

Johnson Homes was a real estate development firm with $25 million in available capital.The owner's mission was to "develop the highest-quality housing communities that deliver the ultimate lifestyle." His goal was to build high-end homes on a lake and develop biking trails and other recreational offerings.In order to accomplish this,he needed to pay 15 million dollars for a 10-year project to put in new water facilities,pave new entry and exit roads,and hire consultants to help him navigate state,city,and county regulations.Four years into the project,the owner did not hire the consultants and had only invested 25 percent of the required capital to build the water facility.In addition,he began to travel frequently and did not listen to his employees' complaints.Not surprisingly,the company went bankrupt.Which of these statements is most likely to be true?
A) The company failed because it did not have sufficient financial resources.
B) The company failed because it was too diversified.
C) The company failed because it was not backed up with strategic commitment.
D) The company failed because it was not a visionary company.

Accepted Answer

The vignette describes a focused firm with a good vision and financial backing but a lack of commitment to get the project implemented.

Question 15

In scenario planning,what is the key question to ask to begin to generate different scenarios?
A) What's happening now?
B) Where are we?
C) What if?
D) Where are we going?

Accepted Answer

You want to have very broad-based scenarios to try to cover most contingencies, and "What if?" is a key question for thinking about different futures.

Question 16

Shell Oil is provided as an example of a firm effectively using scenario planning.In the 1960s,they prepared for a strong OPEC and therefore rising oil prices.What are they now predicting about future energy needs?
A) Energy needs will continue to grow, spurred by BRIC countries.
B) In 2025, that 20 percent of our energy will be generated from renewable technologies.
C) That the Middle East leadership will fracture and oil prices will drop.
D) In 2025, that 50 percent of our energy will be generated from renewable technologies.

Accepted Answer

Shell is predicting 80 percent of energy will still be generated by fossil fuels in 2025.

Question 17

The strategic management process follows which strategy framework?
A) AFI; Analyze-Formulate-Implement
B) AFE; Analyze-Formulate-Execute
C) API; Analyze-Plan-Implement
D) APE; Analyze-Plan-Execute

Accepted Answer

Analyze, Formulate, and Implement is the framework for strategy here.

Question 18

Organizational values help people make choices that are ethical and company-goal-oriented.These values answer which strategic management question?
A) What do we want to accomplish as a firm?
B) How do we accomplish our goals in the organization?
C) What are we about as a firm relative to our competitors?
D) What is the best way to compete in the marketplace?

Accepted Answer

The values espoused should guide employees on how to behave in accomplishing the goals of the firm.

Question 19

The ethical standards and norms that should govern the behavior of the individuals within the firm are called what?
A) Values
B) The mission
C) The strategic plan
D) Competitive advantage

Accepted Answer

Values are ethical standards and norms that should govern the behavior of the individuals within the firm.

Question 20

Intel is provided as an example of a firm that has continuously changed its mission statement,including most recently moving to a customer-focused mission.This is an indication of what?
A) Missions are best left as they were originally crafted for the firm.
B) Intel's mission likely created its superior performance over this period.
C) Missions can be inspirational for both employees and customers.
D) The mission was changed after Intel had already changed its business focus.

Accepted Answer

Intel clearly changed its mission statement several times. However, in every case the change seems to have been to catch up with a prior shift in the business model. Therefore, the mission could NOT have caused the superior firm performance.

Quiz 2: The Strategic Management Process

One of Henry Mintzberg's criticisms of the strategic planning process is that:

When strategizing for competitive advantage,managers rely on different approaches that can complement one other.Which one of the following is NOT an approach a firm may use?

Questions such as "What resources do we need if this happens?" and "How can we shape our anticipated future environment?" are performed under what stage of the AFI framework?

McKesson,a $110 billion health care company,is provided as an example firm with clear and compelling organizational values.All of the following items are examples of living the values EXCEPT which one?

A set of values illustrates the firm's __________.

Google's decision in 2010 to pull its servers out of mainland China and operate out of Hong Kong was a response to what?

To be effective,firms must implement their mission statements in strategic actions.The decision that Boeing made to develop the 787 Dreamliner is an example of what?

The 2001 collapse of Enron resulted in the loss of jobs for over 20,000 employees.Arthur Anderson was also impacted by the Enron collapse and 30,000 employees lost their jobs.Why was Arthur Anderson so adversely affected by Enron's collapse?

The 2001 collapse of Enron,resulting in one of the biggest bankruptcies in U.S.history,demonstrates that:

The fact that many organizations were caught off-guard by the recent economic downturn reflects that:

Strategic planning differs from scenario planning in that:

A dominant strategic plan in the scenario planning tool is which of the following managerial options?

When managers envision different what-if scenarios to anticipate possible futures,the approach that is used is called:

In scenario planning,what is the key question to ask to begin to generate different scenarios?

Shell Oil is provided as an example of a firm effectively using scenario planning.In the 1960s,they prepared for a strong OPEC and therefore rising oil prices.What are they now predicting about future energy needs?

The strategic management process follows which strategy framework?

Organizational values help people make choices that are ethical and company-goal-oriented.These values answer which strategic management question?

The ethical standards and norms that should govern the behavior of the individuals within the firm are called what?

Intel is provided as an example of a firm that has continuously changed its mission statement,including most recently moving to a customer-focused mission.This is an indication of what?