Deck 1: Strategic Management: Creating Competitive Advantages

Question 1

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

Answer 1

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

Question 2

Management innovations such as total quality,just-in-time,benchmarking,business process reengineering,and outsourcing are important but not enough for building sustainable competitive advantage.

Answer 2

True
Explanation:Sustainable competitive advantage cannot be achieved through operational effectiveness alone. Popular management innovations of the last two decades like total quality, just-in-time, benchmarking, business process reengineering, and outsourcing are concerned with operational effectiveness.

Question 3

All successful firms compete and outperform their rivals by developing bases for competitive advantage,which can be achieved only through cost leadership.

Answer 3

False
Explanation:Successful firms strive to develop bases for competitive advantage, which can be achieved through cost leadership and/or differentiation as well as by focusing on a narrow or industrywide market segment.

Question 4

Strategic management consists of the analyses,decisions,and actions an organization undertakes in order to create and sustain competitive advantages.

Question 5

Richard Branson,the founder of the Virgin Group,is well known for creating an inclusive organizational structure in which anybody in the organization can be involved in generating and acting on new business ideas.

Question 6

Strategy analysis is the study of only the big picture external environments of the firm.

Question 7

Trade-off decisions between effectiveness and efficiency are important in the practice of strategic management.

Question 8

Decisions by boards of directors are always consistent with shareholder interests.

Question 9

Shell,NEC,and Procter and Gamble have been measuring their performance according to what has been called a triple bottom line.This technique involves an assessment of financial,social,and environmental performance.

Question 10

Ensuring effective corporate governance requires an effective and engaged board of directors,uninvolved shareholders,and proper managerial rewards and incentives.

Question 11

Social responsibility is the idea that organizations are only accountable to stockholders.

Question 12

The final realized strategy of a firm is a combination of deliberate and time-tested strategies only.

Question 13

According to Henry Mintzberg,a management scholar,most firms do not realize their original intended strategy.

Question 14

Lands' End's failure under the leadership of Ms.Frederica Marchionni was said to be a direct result of the quality of her leadership.According to the text,this would be an example of the "romantic" perspective of leadership.

Question 15

Much research has supported the notion that individuals work much harder when they are asked to do their best rather than when they are striving toward a specific goal.

Question 16

Strategic management requires managers at all levels of the organization to take a segregated view of the organization.

Question 17

The vision of an organization is at the top level of its hierarchy of organizational goals.The vision statement should be massively inspiring,overarching,and long term.

Question 18

Sustainability is being increasingly recognized as a source of cost efficiencies and revenue growth.

Question 19

An idealistic vision can arouse employee enthusiasm and therefore is a good vision.

Question 20

The strategic management process should be addressed only by top-level executives.Mid-level and low-level employees are best equipped to implement the strategies of the organization.

Question 21

The organizational versus the individual rationality perspective suggests that objectives that are

A) good for a functional area are always good for the overall organization.
B) good for the overall organization are always best for a functional area.
C) best for a functional area may not be best for the overall organization.
D) best for one functional area will never be best for all functional areas.

Question 22

Management innovations such as total quality,benchmarking,and business process reengineering cannot lead to sustainable competitive advantage because

A) companies that have implemented these techniques have lost money.
B) there is no proof that these techniques work.
C) they cost too much money and effort to implement.
D) every company is trying to implement them.

Question 23

Strategy formulation at the business level addresses best how to compete in a given business

A) to attain competitive advantage.
B) to reduce costs.
C) to decrease buyer power.
D) to thwart entry of new rivals.

Question 24

Ambidextrous behaviors in individuals illustrate how a dual capacity for ________ can be woven into the fabric of an organization at the individual level.

A) alignment and adaptability
B) alignment and transparency
C) alignment and internal linkages
D) alignment and efficiency

Question 25

According to the external control view of leadership,which of the following factors would not be considered an external factor that might positively or negatively affect a firm's success?

A) economic downturns
B) governmental legislation
C) outbreak of war
D) company employee morale

Question 26

Effectiveness is often defined as

A) doing things right.
B) stakeholder satisfaction.
C) doing the right thing.
D) productivity enhancement.

Question 27

In strategic management,both the short-term and long-term perspectives need to be considered because

A) shareholder value is only measured by short-term returns.
B) shareholders only care about long-term returns.
C) long-term vision precludes the analysis of present operating needs.
D) the creative tension between the two forces managers to develop more successful strategy.

Question 28

According to Henry Mintzberg,the final realized strategy of a firm is

A) a combination of deliberate and emergent strategies.
B) a combination of deliberate and differentiation strategies.
C) not deliberate.
D) a result of unrealized intended strategy.

Question 29

All the following are ambidextrous behaviors except

A) taking initiative and being alert to opportunities beyond the job description.
B) being cooperative and seeking opportunities to combine personal efforts with that of others.
C) intensely focusing on the responsibilities of one individual and maximizing the output of the department in the organization in which that individual works.
D) being brokers, always looking to build internal linkages.

Question 30

Ms.Frederica Marchionni became CEO of Land's End in February 2015 when the company showed a 73.8 million-dollar profit.By mid-June of 2016,the company had lost 27.2 million dollars.What went wrong?

A) The new leadership did not understand the corporate culture and image.
B) The marketplace liked the new image.
C) The founder undermined the new CEO in her ability to bring about change.
D) The new goals and objectives were coherent with the company mission statement.

Question 31

Strategic management involves the recognition of trade-offs between effectiveness and

A) cost.
B) value.
C) return on investment.
D) efficiency.

Question 32

The innovation paradox implies that consistency in products and services provokes a tension with the need for new products.This results in a conflict between

A) stability and change.
B) structure and culture.
C) rewards and metrics.
D) stability and metrics.

Question 33

The text addresses two perspectives of leadership as well as their implications.These two perspectives are

A) romantic and unromantic.
B) romantic and internal control.
C) external control and unromantic.
D) romantic and external control.

Question 34

________ may be considered the advance work that must be done in order to effectively formulate and implement strategies.

A) Goal setting
B) Corporate entrepreneurship
C) Strategy analysis
D) Organizational design

Question 35

According to the text,the strategic management process entails three ongoing processes.They are

A) analyses, actions, and synthesis.
B) analyses, decisions, and actions.
C) analyses, evaluation, and critique.
D) analyses, synthesis, and decisions.

Question 36

The four key attributes of strategic management include all of the following except

A) including multiple stakeholder interests in decision making.
B) incorporating both short-term and long-term perspectives.
C) recognizing the trade-offs between effectiveness and efficiency.
D) emphasis on the attainment of short-term objectives.

Question 37

The four key attributes of strategic management include the idea that strategy must

A) be directed toward overall organizational goals and objectives.
B) be focused only on long-term objectives.
C) be focused on only one specific area of an organization.
D) focus only on competitor strengths.

Question 38

Strategy analysis is the starting point of the strategic management process and consists of the

A) analysis only of the vision, mission, and objectives of the firm.
B) analysis of the relevant internal and external environmental factors only.
C) analysis of relevant competitors only.
D) matching of vision, mission, and objectives with the relevant internal and external environmental factors.

Question 39

A CEO made a lot of mistakes in assessing the market and the competitive conditions and improperly redesigning the organization into numerous business units.Such errors led to significant performance declines.According to the text,this example illustrates the ________ perspective of leadership.

A) external control
B) romantic
C) internal mechanism
D) operational

Question 40

In choosing to focus on stakeholders,which of the following will not lead to success for a manager?

A) shareholders and employees
B) employees and suppliers
C) customers and the community at large
D) customers only

Question 41

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

Question 42

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.

Question 43

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

Question 44

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.

Question 45

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.

Question 46

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

Question 47

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

Question 48

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.

Question 49

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

Question 50

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.

Question 51

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.

Question 52

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.

Question 53

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

A) innovative
B) learning
C) implementation
D) business-level

Question 54

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.

Question 55

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.

Question 56

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.

Question 57

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

Question 58

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.

Question 59

Employee stakeholders are concerned with

A) taxes, warranties, and regulations.
B) wages, benefits, and job security.
C) good citizenship behavior.
D) dividends.

Question 60

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.

Question 61

The ROI on sustainability efforts can be difficult to quantify because

A) an excess of necessary data for accurate calculation is readily available.
B) benefits from such projects are tangible.
C) the payback period is on a different time frame.
D) the payback period is on the same time frame.

Question 62

Firms must be aware of goals other than short-term profit maximization.One area of concern should be social responsibility,which is the

A) expectation that business will strive to improve the overall welfare of society.
B) idea that organizations are solely responsible to local citizens.
C) fact that court costs could impact the financial bottom line.
D) idea that businesses are responsible for maintaining a healthy social climate for their employees.

Question 63

Traditional financial models are built around relatively easy-to-measure,monetized results; whereas,the benefits of sustainability projects involve

A) clear tangibles.
B) clear intangibles.
C) fuzzy tangibles.
D) fuzzy intangibles.

Question 64

Leadership is a necessary (but not sufficient)condition for organizational success.Leaders should emerge at which level(s)of an organization?

A) only at the top
B) in the middle
C) throughout the organization
D) only during times of change

Question 65

Stockholders as a stakeholder group are interested primarily in

A) payment of interest and repayment of principal.
B) value and warranties.
C) dividends and capital appreciation.
D) taxes and compliance with regulations.

Question 66

A key stakeholder group that is particularly susceptible to corporate social responsibility (CSR)initiatives is

A) suppliers.
B) rivals.
C) government agencies.
D) consumers.

Question 67

Peter Senge,of MIT,recognized three types of leaders.Which of the following describes individuals who champion and guide ideas,create learning infrastructure,and establish a domain for taking action?

A) local line leaders
B) executive leaders
C) internal networkers
D) shop floor leaders

Question 68

Wall Street executives have received excessive bonus pay in the past.This concerns which of the following stakeholder groups most directly?

A) government
B) suppliers
C) creditors
D) stockholders

Question 69

Supplier stakeholders are concerned with

A) assurance of a continued relationship with the firm.
B) employee benefits.
C) safe working conditions.
D) capital appreciation.

Question 70

Sustainability programs often find their success beyond company boundaries,thus ________ systems and ________ metrics cannot capture all of the relevant numbers.

A) external; bio
B) internal; process
C) external; external
D) internal; internal

Question 71

Some benefits of sustainability projects include

A) reducing risks.
B) lagging behind regulations.
C) displeasing communities.
D) ignoring employee morale.

Question 72

According to the text,the triple bottom line approach to corporate accounting includes which three components?

A) financial, environmental, and customer
B) financial, organizational, and customer
C) financial, environmental, and social
D) financial, organizational, and psychological

Question 73

Peter Senge,of MIT,recognized three types of leaders.________ are individuals that,although having little positional power and formal authority,generate their power through the conviction and clarity of their ideas.

A) Local line leaders
B) Executive leaders
C) Internal networkers
D) Shop floor leaders

Question 74

Many organizations have a large number of functional areas with very diverse and sometimes competing interests.Such organizations will be most effective if

A) each functional area focuses on achieving their own goals.
B) goals are defined at the bottom and implemented at the top.
C) functional areas work together to attain overall goals.
D) management and employees have separate goals.

Question 75

The text argues that a strategic perspective in an organization should be emphasized

A) at the top of the organization.
B) at the middle of the organization.
C) throughout the organization.
D) from the bottom up.

Question 76

According to a CEO survey by Accenture,________ are not mutually exclusive corporate goals.

A) quality and profitability
B) sustainability and profitability
C) ROI and quality
D) availability and ROI

Question 77

The case for sustainability projects needs to be made on the basis of a more holistic and comprehensive understanding of all the ________ benefits.

A) measurable and unmeasurable
B) financial and physical
C) tangible and intangible
D) measurable and physical

Question 78

Strategy formulation and implementation is a challenging ongoing process.To be effective,it should not involve

A) the CEO and the board of directors.
B) the board of directors, CEO, and CFO.
C) rivals.
D) line and staff managers.

Question 79

According to the Corporate Citizenship poll conducted by Cone Communications,most Americans say they would be likely to switch brands to one associated with a good cause,if there are similarities between

A) price and availability.
B) availability and quality.
C) price and quality.
D) price and durability.

Question 80

Community stakeholders are concerned primarily with

A) product warranties.
B) corporate citizenship behavior.
C) capital appreciation.
D) repayment of principal.