Deck 3: The Diamond-E Framework

Question 1

A viable strategy needs to be aligned with the

A) financial resources of the firm
B) organization's internal capabilities
C) priorities of the shareholders
D) organization's current market position

Answer 1

B

Question 2

Environmental risks typically arise because the

A) management misread the situation or failed to adapt to changing circumstances
B) organization was incapable of responding to the situation or its response was inadequate
C) management took too long to respond to the situation
D) organization lacked the required resources to respond to the situation

Answer 2

A

Question 3

Organizations that engage in informal strategic reviews on an on-going basis are

A) concerned about their organization's financial stability
B) having misgivings about their organization's strategic direction
C) in a position to respond in a timely manner to strategic possibilities
D) following the lead of their major competitors

Answer 3

C

Question 4

The strategic preferences of the management team need to be considered to

A) avoid conflict
B) develop an appropriate strategy
C) counter environmental threats
D) leverage internal capabilities

Question 5

A technique known as a gap analysis is used to evaluate the

A) strategy-resources linkage
B) resources-organization linkage
C) strategy-management preferences linkage
D) resources-environment linkage

Question 6

The first step in the process of strategic analysis is to

A) develop a set of mutually exclusive options
B) establish the need for action
C) evaluate the competitive environment
D) undertake a gap analysis

Question 7

Strategic tension refers to the constraints that exist between what an organization

A) has done in the past and what it could do in the future
B) could do and how the management team wants to proceed
C) should do and its product/market focus
D) should do and what it can do

Question 8

One of the key activities associated with the development of the base case is a careful analysis of the

A) capabilities of the management team
B) priorities of the Board of Directors
C) strengths of the organization's major competitors
D) current performance of the organization

Question 9

One approach that can be used to evaluate the performance of the organization is to

A) forecast future performance based on the current strategy
B) measure performance against the level of competition in the industry
C) compare the budget forecast to actual expenditures for the current period
D) measure performance against an external standard

Question 10

Strategic reviews are typically undertaken

A) as part of the annual financial audit
B) every December 31
C) in preparation for filing the corporate tax return
D) on a periodic basis, such as once a year

Question 11

The underlying logic of the Diamond-E model is consistency, meaning the

A) financial resources of the firm are matched with the priorities of the shareholders
B) strategy is in keeping with the priorities of suppliers
C) strategy is consistent with the internal and external environment
D) financial resources of the firm are matched with its strengths

Question 12

Three key components of the Diamond-E model are

A) product/market focus, corporate goals, and strategy
B) organization, strategy, and environment
C) financial resources, management preferences, and the product/market focus
D) corporate goals, internal strengths, and external threats

Question 13

Capability risks typically arise from inconsistencies between

A) strategy and the sustainability of the organization
B) the financial resources of the organization and its strengths
C) strategy and internal competencies of the organization
D) the financial resources of the organization and its culture

Question 14

The organization's external environment suggests what the organization

A) needs to do given the competitive landscape
B) has the capabilities to competently execute
C) should have done in the past
D) should implement immediately

Question 15

Environmental risks typically arise from inconsistencies between

A) strategy and the sustainability of the organization
B) the financial resources of the organization and its strengths
C) strategy and external opportunities and challenges
D) the financial resources of the organization and its technology assets

Question 16

An organization's capabilities are influenced by its

A) financial resources and employee development program
B) leadership and the priorities of the Board of Directors
C) structure and management processes
D) culture and corporate governance

Question 17

The Diamond-E model is a framework for

A) financial assessment
B) market evaluation
C) product decisions
D) strategic analysis

Question 18

The strategy-environment linkage aligns

A) strategy with the regulatory environment in which the organization operates
B) strategic opportunities and challenges with external forces
C) strategy with the financial environment of the organization
D) strategic opportunities and challenges with the internal environment

Question 19

Opportunities for the organization are found in its

A) financial statements
B) external environment
C) internal capabilities
D) the value chain activities

Question 20

When evaluating a strategic proposal, an important consideration is the implications for the organization's

A) employees
B) suppliers
C) contractors
D) current strategy

Question 21

Strategy describes the opportunities the business is pursuing in the marketplace.

Question 22

Complacency can cause an organization's internal capabilities to erode over time.

Question 23

Good strategies sometimes fail because the

A) competition moved ahead
B) industry outlook was negative
C) government called an election
D) implementation was challenging

Question 24

Strategy tends to emerge from a series of discrete decisions made over time.

Question 25

Failure to develop internal capabilities in the long term can limit the success of the strategic initiative.

Question 26

The implication of changes in the external environment is an important factor when assessing the strategy-resources linkage.

Question 27

Hidden assets can be identified from the

A) organization's financial statements
B) minutes of the Board of Directors' meetings
C) organization's internal capabilities
D) organization's external analysis

Question 28

If the strategy-organization linkage is flawed, then the organizational structure may need to be changed.

Question 29

Managerial preferences influence resource developing indirectly.

Question 30

One of the key activities associated with the strategy formulation stage of strategic analysis is to

A) generate strategic proposals
B) assess past performance
C) forecast future performance based on current strategy
D) establish need for change

Question 31

A gap analysis identifies missing resource requirements.

Question 32

Changes in the external environment can cause a strategy to become obsolete in the short term.

Question 33

When reviewing an organization's strategic proposals, one of the considerations should be the

A) uniqueness of the proposals
B) cost of retraining the workforce
C) regulatory reporting requirements
D) level of risk given the nature of the opportunity

Question 34

One of the outcomes of the environmental assessment is an identification of the strengths of the organization.

Question 35

Managerial preferences can be a strategic constraint.

Question 36

If organizational performance is not in keeping with expectations, the recommended strategic approach is to

A) check vulnerabilities
B) develop new core competencies
C) introduce cost cutting measures
D) problem solve and undertake remedial action

Question 37

A viable strategy is one that is consistent with the realities of the internal and external environment.

Question 38

Industry profits are a good indicator of environmental risks.

Question 39

A short-run environmental risk is a strategy that demands too much of an organization.

Question 40

Once a strategy has been established it seldom needs to be changed.

Question 41

The base case forecasts organizational performance for the most conservative of the strategic proposals under consideration.

Question 42

The Diamond-E model provides an effective means for formulating a new strategy.

Question 43

Once the strategic proposals have been evaluated, the next step is implementation.

Question 44

Culture is a critical variable when it comes to developing organizational capabilities.

Question 45

One of the challenges faced by the management team when developing strategy is to determine what the organization can do versus what it is capable of doing.

Question 46

A comparison of the firm's performance relative to its competitors can identify areas of strength as well as vulnerabilities.

Question 47

The process of strategic analysis should be part of the everyday agenda of the management team.

Question 48

An analysis of implementation issues should inform the formulation of strategy.

Question 49

The Diamond-E model is used primarily for developing new strategic initiatives.

Question 50

Not all businesses have a strategy, so the management team may have to create one to begin the strategic analysis process.