Question 1

Which of the following statements is true regarding an organisation's vision statement?
A)The vision statement should be focused on an organisation's short-term strategic position.
B)The vision statement should be all-purpose or generic.
C)The vision statement should be focused on the company's most outstanding past achievements.
D)The vision statement should be memorable and enduring.

Accepted Answer

The statement should not be focused on short-term goals, but rather on long-term aspirations. It should also not be all-purpose or generic, but specific to the organization's goals and values. While past achievements may be mentioned, the focus should be on future goals. Finally, the statement should be memorable and enduring, so that it can guide the organization's actions for a long time to come.

Question 2

The creation of value for customers requires:
A)a 'supply side' perspective
B)a 'demand side' perspective
C)an 'input/output' perspective
D)a 'reverse engineering' perspective

Accepted Answer

The creation of value for customers is seen from their perspective and needs, hence a 'demand side' perspective is required. A supply side perspective focuses on the production process, an input/output perspective on the transformation of inputs into outputs, and a reverse engineering perspective on taking apart a product to understand its design and function.

Question 3

The behavioural theory approach of the firm:
A)allows for the existence of a variety of stakeholders
B)controls the power of strategic stakeholders
C)simplifies the process of monitoring strategy
D)explains why key stakeholders' differing expectations are always in agreement

Accepted Answer

The behavioural theory approach of the firm recognizes the existence and influence of a variety of stakeholders, including employees, customers, suppliers, and investors, among others. It emphasizes the importance of building relationships and managing the interests of these stakeholders to achieve long-term success.

B, C, and D are incorrect because the behavioural theory approach does not control the power of strategic stakeholders, nor does it simplify the process of monitoring strategy. Additionally, it acknowledges that key stakeholders may have differing expectations and interests that may not always be in agreement.

Question 4

A vision statement is a statement that:
A)tells it like it is
B)is thorough and exhaustive
C)represents a realistic concept of the short-term position of the company
D)should be memorable and inspire employees

Accepted Answer

A vision statement should be memorable and inspire employees to work towards a common goal or purpose. Option A is the definition of a mission statement. Option B is more appropriate for a detailed strategic plan. Option C limits the scope of the statement to the short-term, while a vision statement is meant to represent a long-term vision for the company.

Question 5

The recommended ways to outperform competitors do NOT include providing a:
A)bigger range of products or services
B)better range of products or services
C)cheaper range of products or services
D)different range of products or services

Accepted Answer

Offering a bigger range of products or services does not necessarily mean outperforming competitors if the quality, cost, or differentiation is not considered.

Question 6

Which of the following is the best explanation why 'Corporate social responsibility' is increasingly being used by organisations?
A)Because corporations are trying to attract younger employees
B)Because corporations seek to focus on meeting current needs
C)Because CR is not catching on as a replacement term for CSR
D)Because corporations must balance the needs of the different stakeholders affected by corporate actions

Accepted Answer

Corporate social responsibility involves a company taking into account the impact of their actions on different stakeholders, such as employees, customers, shareholders, and the community at large. As companies recognize the importance of balancing these needs, they are increasingly adopting CSR practices.

Question 7

The five questions (5Qs)of business strategy do NOT include:
A)What products and services does the company plan to produce?
B)What customer and geographic markets does the company plan to service?
C)What generic strategy must the company avoid in a differentiated market?
D)What position in the industry does the company plan to hold in the future?

Accepted Answer

The other four questions are part of the five questions (5Qs) of business strategy, which are: 
A) What products and services does the company plan to produce? 
B) What customer and geographic markets does the company plan to service? 
D) What position in the industry does the company plan to hold in the future? 
The question about avoiding a generic strategy in a differentiated market is not one of the 5Qs.

Question 8

The value proposition rests on the requirement that:
A)the company can charge what it likes for its products
B)the customer is 'price insensitive' to the company's offering
C)the company's employees have their own prestige invested in its processes
D)the company can supply what the customers want at a price they will pay

Accepted Answer

The value proposition refers to the unique value that a company offers to its customers in order to convince them to choose its products or services over those of competitors. It is based on the idea that the company can provide what its customers want at a price they are willing to pay. Therefore, option D is the best choice. Option A is incorrect because the company cannot charge anything it wants, as the market determines the price range for its products. Option B is incorrect because even if customers are not price sensitive, they still want to get value for their money. Option C is incorrect because it refers to employee engagement, which is not directly related to the value proposition.

Question 9

According to Hubbard,Rice and Galvin,competitive advantage is:
A)profit maximisation
B)making profits similar to the competitors
C)making more profits than competitors for similar activities
D)achieving bigger market share than the competitors

Accepted Answer

Competitive advantage is the ability to generate more profits than competitors from similar activities. It is not just about achieving a bigger market share or making profits similar to competitors, but about creating a unique value proposition that exceeds what competitors offer. Profit maximization may be a desirable outcome, but it is not the only measure of competitive advantage.

Question 10

Typical 'stakeholders' of an organisation do not include its:
A)employees
B)board of directors
C)suppliers
D)World Trade Organization

Accepted Answer

The typical stakeholders of an organization include its employees, board of directors, suppliers, customers, shareholders/investors, and sometimes the government and society. However, the World Trade Organization is not a typical stakeholder of an organization, as it is an international organization that promotes free trade and does not have a direct stake in the operations of individual companies.

Question 11

Tests for a good business strategy do NOT include the requirement that the strategy:
A)creates value for customers
B)will confuse competitors
C)is unique compared with competitors
D)is enduring

Accepted Answer

Confusing competitors is not a requirement for a good business strategy. In fact, a strategy that is too complex or confusing may actually be detrimental to a company's success. The other options, creating value for customers, being unique compared to competitors, and enduring over time, are all important factors to consider when evaluating a business strategy.

Question 12

The function(s)of key stakeholders is/are to:
A)constitute the effective corporate governance of the company
B)influence the major decisions the company will make
C)determine the current and future strategy of the company
D)all of the above

Accepted Answer

All three options are correct. Key stakeholders play a crucial role in the effective corporate governance of the company, influencing major decisions, and determining the current and future strategy of the company. Therefore, choice D is the best option.

Question 13

Petris argues that public sector organisations can be divided into three types except those:
A)concerned with profit maximisation
B)setting directions
C)transforming directions into specific policies and programs
D)implementing policies and programs

Accepted Answer

Petris categorizes public sector organizations into policy-making and administrative organizations, but neither type is concerned with profit maximization. The policy-making organizations are involved in setting directions and transforming them into specific policies and programs, while the administrative organizations are responsible for implementing those policies and programs.

Question 14

A mission statement is a statement that:
A)should be used instead of a vision statement
B)was always different from the vision statement
C)over time,became commonly focused on mundane matters
D)operationalises the vision statement for the current business situation

Accepted Answer

A mission statement is designed to operationalize the vision statement for the current business situation. It outlines the company's purpose, values, and goals, and provides direction for decision-making and strategy development. While it may touch on mundane matters, its primary focus is on the company's overarching purpose and goals. It is not intended to replace the vision statement, but rather to provide more specific guidance for achieving the vision.

Question 15

In the shareholder value/value-based management theory,management seeks to maximise:
A)market share
B)value for the shareholders
C)their retirement benefits
D)prices in the marketplace

Accepted Answer

Shareholder value/value-based management theory focuses on maximizing value for the shareholders. This means that the management's primary goal is to increase the return on investment for the shareholders by improving the company's financial performance and profitability. Maximizing market share, retirement benefits or prices in the marketplace may not necessarily lead to an increase in shareholder value.

Question 16

Reasons why business strategy may be misunderstood within an organisation do NOT include:
A)employees may not be interested in the business strategy
B)employees may not understand the business strategy
C)employees may not be convinced that the business strategy is right
D)employees may get mixed messages from a variety of managers

Accepted Answer

The answer of Reasons why business strategy may be misunderstood...

Question 17

The business model of an organisation:
A)takes the value proposition and incorporates it into a specific value chain of activities
B)is a process for modelling the success of the organisation's strategy
C)determines how the organisation will create customer value
D)can be difficult to identify in low-cost manufacturing firms

Accepted Answer

The business model takes the value proposition and incorporates it into a specific value chain of activities. It defines how the organization creates, delivers, and captures value. It includes the processes, resources, and capabilities required to create and deliver the value proposition.

Option B is incorrect because the business model is not just a process for modeling the success of the organization's strategy, but it is the strategy itself.

Option C is partially correct but not comprehensive as it misses the capturing of value part.

Option D is inappropriate as the complexity or simplicity of the business model is not dependent on the type of industry, organization, or business.

Question 18

Petris's model of the 'phases in the strategy-making process in the public sector' does NOT include:
A)setting direction through strategic frameworks
B)consulting with strategic stakeholder groups to achieve working consensus
C)transforming strategic frameworks into policies and programs
D)implementing policies and programs

Accepted Answer

Petris's model includes setting direction through strategic frameworks, transforming those frameworks into policies and programs, and implementing those policies and programs. However, it does not explicitly mention consulting with stakeholder groups to achieve consensus.

Question 19

The value chain of an organisation:
A)includes only those activities that are profitable
B)is determined by what competitors choose not to do
C)is the set of activities that the organisation undertakes or organises to deliver the product to the customer
D)is determined by collaborating firms such that value-adding activities are arranged in a chain of value creation between collaborators

Accepted Answer

The value chain refers to all the activities that an organization undertakes or organizes to deliver its product or service to the customer. It includes both primary and support activities and is not limited to just profitable activities or determined by what competitors choose not to do. Collaborating firms may contribute to the value chain, but the value chain itself refers to the organization's internal activities.

Question 20

Value is the difference between:
A)what the customer pays for and deserves
B)what the 'office of fair trading' decides a customer has a right to expect
C)what the customer pays in costs and receives in benefits
D)the customer's buying price and the company's sale price

Accepted Answer

Value is determined by comparing what the customer pays (costs) to what they receive (benefits). This is also known as the "value proposition" and is a key factor in a customer's decision to purchase a product or service. Options A and B do not fully capture the concept of value, as they focus on what the customer deserves or is entitled to, rather than what they actually receive. Option D also does not fully capture the concept of value, as it only considers the customer's buying price and the company's sale price, without considering the benefits received by the customer.

Quiz 2: Analysing Business Strategy: Creating Value

Which of the following statements is true regarding an organisation's vision statement?

The creation of value for customers requires:

The behavioural theory approach of the firm:

A vision statement is a statement that:

The recommended ways to outperform competitors do NOT include providing a:

Which of the following is the best explanation why 'Corporate social responsibility' is increasingly being used by organisations?

The five questions (5Qs) of business strategy do NOT include:

The value proposition rests on the requirement that:

According to Hubbard,Rice and Galvin,competitive advantage is:

Typical 'stakeholders' of an organisation do not include its:

Tests for a good business strategy do NOT include the requirement that the strategy:

The function(s) of key stakeholders is/are to:

Petris argues that public sector organisations can be divided into three types except those:

A mission statement is a statement that:

In the shareholder value/value-based management theory,management seeks to maximise:

Reasons why business strategy may be misunderstood within an organisation do NOT include:

The business model of an organisation:

Petris's model of the 'phases in the strategy-making process in the public sector' does NOT include:

The value chain of an organisation:

Value is the difference between: