Deck 1: Basic Concepts in Strategic Management

Question 1

In the externally oriented planning phase, plans are developed by heavily involving the input of managers from lower levels.

Answer 1

False

Question 2

To be effective, strategic management must be a formal process.

Answer 2

False

Question 3

The emphasis of strategic management is on

A) long-term performance.
B) first line managers.
C) the short-run performance of the corporation.
D) an examination of the organization's internal environment.
E) an investigation of competitor actions.

Answer 3

A

Question 4

Strategic planning within a small organization

A) may be informal and irregular.
B) must be elaborate to allow for future growth.
C) should always be formalized and explicitly stated.
D) should be done by the president only.
E) is unnecessary and a waste of time.

Question 5

The integrated internationalization of markets and corporations is called

A) normalization.
B) economic integration.
C) globalization.
D) nationalization.
E) regionalization.

Question 6

Research suggests that strategic management evolves through four sequential phases in corporations. The first phase is

A) externally oriented planning.
B) basic financial planning.
C) internally oriented planning.
D) forecast-based planning.
E) strategic management.

Question 7

The term used to describe new products, services, methods, and organizational approaches that allow businesses to achieve extraordinary returns is

A) ROI.
B) innovation.
C) competitive advantage.
D) sustainability.
E) profit maximization.

Question 8

In a survey of 50 corporations, which of the following was rated as one of the three top benefits of strategic management?

A) clearer sense of strategic vision for the firm
B) higher levels of employee motivation
C) higher levels of job satisfaction
D) improved productivity
E) lower employee turnover

Question 9

Strategic planning in a multidivisional corporation

A) should be informal to allow complete understanding by the many participants.
B) should be instigated only from the main corporate office.
C) should be accomplished quickly to decrease the likelihood of it becoming outdated.
D) should encourage a clear delineation between top management and lower-level managers.
E) should be a formalized and sophisticated system.

Question 10

One of the benefits of strategic management is a clearer sense of strategic vision for the firm.

Question 11

Top-down planning that emphasizes formal strategy formulation and leaves the implementation issues to lower management levels is known as

A) forecast-based planning.
B) externally oriented planning.
C) strategic management.
D) basic financial planning.
E) none of the above

Question 12

General Electric led the transition from strategic planning to strategic management during the 1980s.

Question 13

Strategic management is the set of managerial decisions that determines the short-term performance of a corporation.

Question 14

What are the benefits of strategic management?

Question 15

In the final phase of strategic management, strategic information is available to

A) people throughout the organization.
B) the top management responsible for decision-making.
C) middle management.
D) operational personnel.
E) only those responsible for implementing the strategy.

Question 16

The free trade area composed of Argentina, Brazil, Uruguay, Venezuela, and Paraguay is called

A) EU.
B) ASEAN.
C) NAFTA.
D) Mercosur.
E) ABUP.

Question 17

Research of the planning practices of companies in the oil industry concludes that the real value of modern strategic planning is more in the ________ that is part of a future-oriented planning process than in any resulting written strategic plan.

A) planning
B) strategic thinking and organizational learning
C) resulting written strategic plan
D) formality of the process
E) improved communication within the organization

Question 18

The time horizon involved with regard to basic financial planning is usually

A) one year.
B) one quarter.
C) three to five years.
D) less than one month.
E) five to ten years.

Question 19

When an organization is evaluating its strategic position, which is not one of the strategic questions that an organization generally may ask itself?

A) Where is the organization now?
B) Are we on target to hit our financial objectives next year?
C) If no changes are made, where will the organization be in one year?
D) If the evaluation is negative, what specific actions should management take?
E) If no changes are made, where will the organization be in 10 years?

Question 20

A difference between basic financial planning and forecast-based planning is

A) the time horizon is shorter in forecast-based planning.
B) forecast-based planning incorporates environmental data and extrapolates current trends.
C) basic financial planning utilizes consultants with sophisticated techniques.
D) basic financial planning utilizes scenarios and contingency strategies.
E) basic financial planning relies heavily on input from lower levels in the organization.

Question 21

The currency used to integrate the monetary systems of the European Union (EU) is called the

A) peso.
B) dollar.
C) euro.
D) franc.
E) pound.

Question 22

Boston Consulting Group (BCG) found that innovation is a top 3 priority for three-quarters of the companies in the 2014 BCG global innovation survey.

Question 23

Canada, the United States, and Mexico are affiliated economically under which trade alliance?

A) ASEAN
B) Mercosur
C) EU
D) NAFTA
E) CAFTA

Question 24

The ability of an organization to reshape its environment is described by

A) population ecology theory.
B) institution theory.
C) the strategic choice perspective.
D) organizational learning theory.
E) organizational citizenship theory.

Question 25

The goal of NAFTA is complete economic integration among Canada, the United States, and Mexico.

Question 26

Business sustainability reflects business practices to manage the firm's triple bottom line.

Question 27

As more industries become global, strategic management is becoming less important in positioning a company for long-term competitive advantage.

Question 28

Climate change has become a growing concern for businesses to include in their corporate strategies.

Question 29

One member of the European Union (EU) is Chile.

Question 30

Which theory proposes that once an organization is successfully established in a particular environmental niche, it is unable to adapt to changing conditions?

A) population ecology
B) institution
C) citizenship
D) strategic choice
E) organizational learning

Question 31

Population ecology is a theory that proposes organizations can and do adapt to change by imitating other successful organizations.

Question 32

The triple bottom line refers to which of the following?

A) water, air, and oil
B) footprints, finance, and environment
C) physical environment, traditional profit/loss, and air
D) traditional profit/loss, social responsibility, and environmental responsibility
E) social responsibility, people, and ethics

Question 33

One of the benefits of globalization is

A) economies of scale.
B) decreased outsourcing.
C) increased union negotiations.
D) increased taxes.
E) additional human resource training.

Question 34

The theory that proposes organizations can and do adapt to changing conditions by imitating other successful organizations is known as

A) population ecology.
B) institution theory.
C) citizenship theory.
D) strategic theory.
E) sample theory.

Question 35

Knowing a company is mindful of its impact on the environment seldom changes consumer buying habits.

Question 36

Globalization is the integrated internationalization of markets and corporations.

Question 37

Define globalization and identify the role of strategic management in globalization.

Question 38

A Gallup study reported that companies that focused on business sustainability had 3.9 times the EPS growth rates as compared to organizations that did not focus on business sustainability.

Question 39

Members of the European Union (EU) include all of the following EXCEPT

A) Ireland.
B) Great Britain.
C) Belgium.
D) France.
E) Slovakia.

Question 40

The ability of a corporation to shift from one dominant strategy to another is called

A) strategy implementation.
B) chaos formulation.
C) contingency management.
D) logical incrementalism.
E) strategic flexibility.

Question 41

Strategic management is that set of managerial decisions and actions that determine the long-run performance of a corporation. Which one of the following is not one of the basic elements of the strategic management process?

A) strategy formulation
B) strategy implementation
C) statistical process control
D) evaluation and control
E) environmental scanning

Question 42

What are the four main activities of a learning organization?

Question 43

The Strategic Management Model presents the following process for strategy formulation:

A) Objectives - Policies - Strategies - Mission.
B) Mission - Policies - Strategies - Objectives.
C) Policies - Mission - Strategies - Objectives.
D) Policies - Strategies - Objectives - Mission.
E) Mission - Objectives - Strategies - Policies.

Question 44

An organization skilled at creating, acquiring, and transferring knowledge, and at modifying its behavior to reflect new knowledge and insights is a(n)

A) learning organization.
B) strategically managed corporation.
C) innovative organization.
D) hypercompetitive competitor.
E) entrepreneurial firm.

Question 45

The organization's corporate mission statement

A) should have a different mission statement for each subsidiary division.
B) should be less formally stated to allow for growth.
C) should contain explicit descriptions of their competitive advantages.
D) should state what the organization would like to become.
E) should describe the organization's SWOT.

Question 46

Which one of the following is included in the firm's task environment?

A) technological factors
B) sociocultural factors
C) culture
D) stockholders
E) political-legal forces

Question 47

Strategic flexibility is the ability to shift from one dominant strategy to another.

Question 48

The corporate mission is best described by which one of the following?

A) a description of the activities carried out by the organization
B) the purpose or reason for the corporation's existence
C) a description of top management's responsibilities
D) a statement of corporate objectives
E) a statement of what the organization would like to become

Question 49

The S in SWOT stands for

A) strategies.
B) scanning.
C) strengths.
D) societal.
E) sociocultural.

Question 50

According to Alfred Chandler,

A) high-tech industries cannot be defined by "paths of learning" if they want to evolve.
B) companies spring from an individual entrepreneur's knowledge, which is composed exclusively of technical skills.
C) once a corporation has built its learning base to the point where it has become a core company in its industry, entrepreneurial start-ups are rarely able to successfully enter.
D) learned capabilities derive from organizational strengths.
E) organizational knowledge can seldom be a competitive advantage.

Question 51

All of the following reflect activities of a learning organization EXCEPT

A) experimenting with new approaches.
B) learning from its own experiences and past history.
C) solving problems systematically.
D) alienating competitors in the industry.
E) transferring knowledge quickly and efficiently throughout the organization.

Question 52

The development of long-range plans for the effective management of environmental opportunities and threats in light of corporate strengths and weaknesses is known as

A) strategy formulation.
B) strategy implementation.
C) strategy control.
D) strategic analysis.
E) strategy evaluation.

Question 53

One tenet of the learning organization is to maintain stability.

Question 54

The task environment

A) includes those elements or groups within an organization's industry.
B) encompasses the physical working areas of the organization.
C) is an accounting of the many jobs within an organization.
D) is an advisory committee to top-management.
E) includes general forces that only indirectly affect an organization's activities.

Question 55

The variables structure, culture, and resources pertain to the

A) external environment.
B) internal environment.
C) sociocultural forces.
D) task environment.
E) societal environment.

Question 56

Which one of the following is an example of a mission with a narrow scope?

A) transportation (vs. railroads)
B) computers (vs. office equipment)
C) health care (vs. hospitals)
D) real estate (vs. apartments)
E) telecommunications (vs. television)

Question 57

The monitoring, evaluating, and disseminating of information from the external and internal environments to key people within the corporation is referred to as

A) environmental scanning.
B) external scanning.
C) internal scanning.
D) strategy formulation.
E) strategy implementation.

Question 58

According to organizational learning theory, an organization uses knowledge to improve the fit between itself and its environment.

Question 59

Which one of the following is included in the firm's societal environment?

A) competitors
B) economic forces
C) resources
D) governments
E) special interest groups

Question 60

The T in SWOT stands for

A) trust.
B) technical.
C) terminal.
D) threats.
E) task.

Question 61

A set of sequential steps or techniques that describe in detail how a particular task or job is to be done is referred to as

A) a standard operating procedure.
B) a systems operating procedure.
C) a standard operating program.
D) a standard outside procedure.
E) a systems operating plan.

Question 62

The internal environment includes the variables within the organization itself that are within the short-run control of top management.

Question 63

The type of strategy, which emphasizes the improvement of the competitive position of a corporation's products or services in a particular industry or market segment served by a business unit is

A) functional.
B) operational.
C) business.
D) environmental.
E) corporate.

Question 64

Which of the following is an example of a program?

A) diversify product line to appeal to more people
B) increase sales by ten percent over last year
C) must be "number one" wherever we compete
D) develop and sell quality appliances worldwide
E) reduce final assembly time to three days by having suppliers build plan sections

Question 65

The type of strategy, which achieves corporate and business unit objectives and strategies by maximizing resource productivity is

A) functional.
B) operational.
C) business.
D) product.
E) corporate.

Question 66

FedEx stipulates specific employee behaviors including how a driver dresses to how keys are held when approaching a customer's door. This is an example of a

A) program.
B) budget.
C) procedure.
D) policy.
E) control.

Question 67

A budget is a statement of a corporation's programs in dollar terms. Which is not true of the budgetary function?

A) It is used in planning and control.
B) It serves as a detailed plan of strategy in action.
C) Only one budget is necessary to capture all programs.
D) It details the impact on the firm's future financial situation.
E) It is used as a means of measuring success based on certain criteria.

Question 68

Which of the following is not a part of strategy implementation?

A) performance evaluation
B) budgets
C) programs and tactics
D) procedures
E) operational planning

Question 69

The process by which strategies and policies are put into action through the development of programs, budgets, and procedures is

A) strategy formulation.
B) strategy control.
C) strategy implementation.
D) strategy development.
E) strategy evaluation.

Question 70

As a part of the strategic management process, evaluation and control is concerned with all of the following, EXCEPT

A) generating feedback to decision makers.
B) monitoring corporate activities and performance.
C) stimulating a review of the corporation's strategic management.
D) pinpointing problem areas.
E) determining top management benefits packages.

Question 71

Which of the following is an example of a mission statement?

A) diversify product line to appeal to more people
B) increase sales by ten percent over last year
C) pay highest salaries to keep high quality employees
D) develop and sell quality appliances worldwide
E) divide a sales region into a group of sales districts

Question 72

Which of the following is an example of a policy?

A) Diversify product line to appeal to more people.
B) Increase sales by ten percent over last year.
C) Only acquire companies of 75 employees or more; 75 percent must be engineers.
D) Develop and sell quality appliances worldwide.
E) Diversify from retailing into delivery.

Question 73

Which of the following is an example of a corporate strategy?

A) diversify product line to appeal to more people
B) imitate products of competitors
C) pay highest salaries to keep high quality employees
D) develop and sell quality appliances worldwide
E) divide a sales region into a group of sales districts

Question 74

As defined in this course, a policy is

A) the purpose or reason for a corporation's existence.
B) a statement of activities or steps needed to accomplish a single-use plan.
C) a broad guideline for making decisions that links the formulation of strategy with its implementation.
D) a comprehensive master plan stating how a corporation will achieve its mission and objectives.
E) a statement of a corporation's programs in dollar terms.

Question 75

Which of the following is an example of an objective?

A) to diversify product line to appeal to more people
B) to increase sales by ten percent over last year
C) to pay highest salaries to keep high quality employees
D) to develop and sell quality appliances worldwide
E) to divide a sales region into a group of sales districts

Question 76

A large business has three levels in its hierarchy of strategy:

A) Corporate - Business - Functional.
B) Environmental - Corporate - Functional.
C) Environmental - Enterprise - Corporate.
D) Business - Divisional - Functional.
E) Industry - Corporate - Divisional.

Question 77

A hierarchy of strategy emphasizes the need for the three levels of strategy to complement and support one another.

Question 78

The type of strategy, which describes a company's overall direction in terms of its general attitude toward growth and the management of its various businesses is

A) functional.
B) operational.
C) business.
D) product.
E) corporate.

Question 79

A program or tactic is

A) a detailed cost statement in terms of dollars.
B) a system of sequential steps.
C) a statement of the activities needed to support a strategy.
D) the process by which strategies and policies are put into action.
E) none of the above

Question 80

A goal differs from an objective because it

A) is open-ended.
B) is quantified.
C) specifies measurable results.
D) is clearly specified.
E) provides a time horizon.