1) The goal of strategic management is to
A) achieve competitive advantage.
B) maintain competitive advantage.
C) achieve and maintain competitive advantage.
D) eliminate competitive advantage.
E) eliminate and abolish competitive advantage.
Answer: C
Diff: 2
LO: 1.1: Describe the strategic-management process.
AACSB: Analytical thinking
2) Strategic management focuses on integrating management, ________, and information systems to achieve organizational success.
A) marketing
B) finance and accounting
C) production and operations
D) research and development
E) all of the above
Answer: E
Diff: 2
LO: 1.1: Describe the strategic-management process.
AACSB: Written and oral communication
3) What can be defined as the art and science of formulating, implementing and evaluating cross-functional decisions that enable an organization to achieve its objectives?
A) Strategy formulation
B) Strategy evaluation
C) Strategy implementation
D) Strategic management
E) Strategic leading
Answer: D
Diff: 1
LO: 1.1: Describe the strategic-management process.
AACSB: Written and oral communication
4) In recent years, the speedy flow of information through technology has
A) made it harder for people worldwide to see how others work and live.
B) strengthened national boundaries and made countries more self-contained.
C) created a borderless world with global competitors, customers, and citizens.
D) ensured that the United States is unrivaled by other companies in all industries.
E) made the real flow of financial activity align with political boundaries between countries.
Answer: C
Diff: 2
LO: 1.1: Describe the strategic-management process.
AACSB: Written and oral communication
5) The strategic-management process is becoming more widely used by
A) small firms.
B) nonprofit institutions.
C) governmental organizations.
D) multinational conglomerates.
E) all of the above
Answer: E
Diff: 2
LO: 1.1: Describe the strategic-management process.
AACSB: Written and oral communication
6) An organization should take a(n) ________ approach in its industry.
A) adversarial rather than a collegial
B) collegial rather than an adversarial
C) reactive rather than a proactive
D) proactive rather than a reactive
E) cooperative rather than a competitive
Answer: D
Diff: 2
LO: 1.1: Describe the strategic-management process.
AACSB: Written and oral communication
7) The strategic-management process represents a(n) ________, ________, and ________ approach for determining an enterprise's future direction.
A) logical; systematic; subjective
B) intuitive; disorganized; subjective
C) logical; systematic; objective
D) intuitive; disorganized; objective
E) inconsistent; systematic; subjective
Answer: C
Diff: 2
LO: 1.1: Describe the strategic-management process.
AACSB: Written and oral communication
8) The strategic-management process
A) occurs once a year.
B) is a semiannual process.
C) is a continuous process.
D) applies mostly to companies with sales greater than $100 million.
E) applies mostly to small businesses.
Answer: C
Diff: 3
LO: 1.1: Describe the strategic-management process.
AACSB: Analytical thinking
9) Strategic management focuses on integrating management, marketing, finance and accounting, production and operations, research and development, and information systems to achieve organizational success.
Answer: TRUE
Diff: 1
LO: 1.1: Describe the strategic-management process.
AACSB: Written and oral communication
10) Optimizing for tomorrow the trends of today is the purpose of strategic management.
Answer: FALSE
Diff: 2
LO: 1.1: Describe the strategic-management process.
AACSB: Written and oral communication
11) U.S. firms are not being aggressively challenged in the computer industry.
Answer: FALSE
Diff: 2
LO: 1.1: Describe the strategic-management process.
AACSB: Analytical thinking
12) Strategic management is an attempt to organize qualitative and quantitative information in a way that allows effective decisions to be made under conditions of uncertainty.
Answer: TRUE
Diff: 2
LO: 1.1: Describe the strategic-management process.
AACSB: Written and oral communication
13) By occasionally monitoring external events, companies should be able to identify when change is required.
Answer: FALSE
Diff: 3
LO: 1.1: Describe the strategic-management process.
AACSB: Analytical thinking
14) Firms, like organisms, must be "adept at adapting" or they will not survive.
Answer: TRUE
Diff: 2
LO: 1.1: Describe the strategic-management process.
AACSB: Written and oral communication
15) Once an effective strategy is designed, modifications are rarely required.
Answer: FALSE
Diff: 2
LO: 1.1: Describe the strategic-management process.
AACSB: Analytical thinking
16) Application of the strategic-management process is typically more formal in larger and well-established organizations.
Answer: TRUE
Diff: 2
LO: 1.1: Describe the strategic-management process.
AACSB: Written and oral communication
17) To be effective, strategic-management must be a process that familiarizes managers and employees with the key strategic issues facing an organization and the feasible alternatives for resolving those issues.
Answer: TRUE
Diff: 3
LO: 1.1: Describe the strategic-management process.
AACSB: Analytical thinking
18) The most effective strategic management is ritualistic, predictable, and formal.
Answer: FALSE
Diff: 3
LO: 1.1: Describe the strategic-management process.
AACSB: Analytical thinking
19) All firms have a strategy, even if it is informal, unstructured, and sporadic.
Answer: TRUE
Diff: 2
LO: 1.1: Describe the strategic-management process.
AACSB: Written and oral communication
20) Despite its great popularity in the 1980s, strategic planning by corporate America is now a valuable though rare activity.
Answer: FALSE
Diff: 2
LO: 1.1: Describe the strategic-management process.
AACSB: Analytical thinking
21) The strengths and weaknesses of an organization are determined relative to the strengths and weaknesses of its competitors.
Answer: TRUE
Diff: 2
LO: 1.1: Describe the strategic-management process.
AACSB: Written and oral communication
22) Compare and contrast strategic planning with strategic management.
Answer: The term "strategic planning" is more often used in the business world, whereas "strategic management" is often used in academia. Sometimes, strategic management is used to refer to strategy formulation, implementation and evaluation, with strategic planning referring only to strategy formulation.
Diff: 2
LO: 1.1: Describe the strategic-management process.
AACSB: Written and oral communication
23) Discuss some forces that influence the formality of the strategic-management process.
Answer: Application of the strategic-management process is typically more formal in larger and well-established organizations. Formality refers to the extent that participants, responsibilities, authority, duties, and approach are specified. Smaller businesses tend to be less formal. Firms that compete in complex, rapidly changing environments, such as technology companies, tend to be more formal in strategic planning. Firms that have many divisions, products, markets and technologies also tend to be more formal in applying strategic-management concepts. Greater formality in applying the strategic-management process is usually positively associated with organizational success.
Diff: 3
LO: 1.1: Describe the strategic-management process.
AACSB: Analytical thinking
24) Sometimes ________ is used to refer to strategic formulation, implementation and evaluation, with ________ referring only to strategic formulation.
A) strategic planning; strategic management
B) strategic planning; strategic processing
C) strategic management; strategic planning
D) strategic management; strategic processing
E) strategic implementation; strategic focus
Answer: C
Diff: 2
LO: 1.2: Discuss the three stages of strategy formulation, implementation, and evaluation activities.
AACSB: Written and oral communication
25) During what stage of strategic management are a firm's specific internal strengths and weaknesses determined?
A) Formulation
B) Implementation
C) Evaluation
D) Feedback
E) Goal-setting
Answer: A
Diff: 2
LO: 1.2: Discuss the three stages of strategy formulation, implementation, and evaluation activities.
AACSB: Written and oral communication
26) An important activity in ________ is taking corrective action.
A) strategy evaluation
B) strategy implementation
C) strategy formulation
D) strategy leadership
E) all of the above
Answer: A
Diff: 2
LO: 1.2: Discuss the three stages of strategy formulation, implementation, and evaluation activities.
AACSB: Written and oral communication
27) What step in the strategic management process involves mobilizing employees and managers to put strategies into action?
A) Strategy formulation
B) Strategy evaluation
C) Strategy implementation
D) Strategic advantage
E) Competitive advantage
Answer: C
Diff: 2
LO: 1.2: Discuss the three stages of strategy formulation, implementation, and evaluation activities.
AACSB: Interpersonal relations and teamwork
28) What types of skills are especially critical for successful strategy implementation?
A) Interpersonal
B) Marketing
C) Technical
D) Conceptual
E) Visionary
Answer: A
Diff: 2
LO: 1.2: Discuss the three stages of strategy formulation, implementation, and evaluation activities.
AACSB: Interpersonal relations and teamwork
29) With which phase of strategic management is most strongly associated with "action"?
A) Strategy formulation
B) Strategy implementation
C) Strategy evaluation
D) Competing advantages
E) Measuring performance
Answer: B
Diff: 1
LO: 1.2: Discuss the three stages of strategy formulation, implementation, and evaluation activities.
AACSB: Written and oral communication
30) ________ is NOT a strategy-implementation activity.
A) Taking corrective actions
B) Establishing annual objectives
C) Devising policies
D) Allocating resources
E) Motivating employees
Answer: A
Diff: 2
LO: 1.2: Discuss the three stages of strategy formulation, implementation, and evaluation activities.
AACSB: Analytical thinking
31) Strategy evaluation is necessary because
A) internal and external factors are constantly changing.
B) the SEC requires strategy evaluation.
C) success today is a guarantee of success tomorrow.
D) the IRS requires strategy evaluation.
E) firms have limited resources.
Answer: A
Diff: 2
LO: 1.2: Discuss the three stages of strategy formulation, implementation, and evaluation activities.
AACSB: Analytical thinking
32) In which phase of strategic management are annual objectives are especially important?
A) Reduction
B) Formulation
C) Implementation
D) Evaluation
E) Policy
Answer: C
Diff: 2
LO: 1.2: Discuss the three stages of strategy formulation, implementation, and evaluation activities.
AACSB: Written and oral communication
33) In which phase of strategic management are long-term objectives especially important?
A) Formulation
B) Control
C) Evaluation
D) Implementation
E) Management
Answer: A
Diff: 2
LO: 1.2: Discuss the three stages of strategy formulation, implementation, and evaluation activities.
AACSB: Written and oral communication
34) The decision to expand or diversify operations is a strategy-formulation issue.
Answer: TRUE
Diff: 2
LO: 1.2: Discuss the three stages of strategy formulation, implementation, and evaluation activities.
AACSB: Analytical thinking
35) The decision to merge is a strategy-formulation issue but the decision to form a joint venture is a strategy-implementation issue.
Answer: FALSE
Diff: 1
LO: 1.2: Discuss the three stages of strategy formulation, implementation, and evaluation activities.
AACSB: Written and oral communication
36) Strategy implementation is often considered to be the most difficult stage in the strategic-management process.
Answer: TRUE
Diff: 2
LO: 1.2: Discuss the three stages of strategy formulation, implementation, and evaluation activities.
AACSB: Written and oral communication
37) The final stage in strategic management is strategy implementation.
Answer: FALSE
Diff: 1
LO: 1.2: Discuss the three stages of strategy formulation, implementation, and evaluation activities.
AACSB: Written and oral communication
38) In most large organizations that engage in strategic management, the formulation, implementation, and evaluation of strategy activities occur at three hierarchical levels: corporate; divisional or strategic business unit; and functional.
Answer: TRUE
Diff: 2
LO: 1.2: Discuss the three stages of strategy formulation, implementation, and evaluation activities.
AACSB: Written and oral communication
39) One of the fundamental strategy evaluation activities is reviewing the external and internal factors on which strategies are based.
Answer: TRUE
Diff: 2
LO: 1.2: Discuss the three stages of strategy formulation, implementation, and evaluation activities.
AACSB: Written and oral communication
40) Many organizations mistakenly spend more time and effort on the implementation of a plan, than on the formulation of the plan itself.
Answer: FALSE
Diff: 3
LO: 1.2: Discuss the three stages of strategy formulation, implementation, and evaluation activities.
AACSB: Analytical thinking
41) Which stage in the strategic-management process is the most difficult? Explain why.
Answer: Strategy implementation is the most difficult stage in the strategic-management process because it requires personal discipline, commitment and sacrifice. Successful strategy implementation hinges upon managers' ability to motivate employees, which is more of an art than a science. Interpersonal skills are especially critical for successful strategy implementation.
Diff: 3
LO: 1.2: Discuss the three stages of strategy formulation, implementation, and evaluation activities.
AACSB: Written and oral communication
42) Which statement best describes intuition?
A) It alone should be used in decision-making.
B) It represents a minor factor in decision-making integrated with analysis.
C) It should be coupled with analysis in decision-making.
D) It is better than analysis in decision-making.
E) It is management by ignorance.
Answer: C
Diff: 3
LO: 1.3: Explain the need for integrating analysis and intuition in strategic management.
AACSB: Analytical thinking
43) Analytical and intuitive thinking complement each other.
Answer: TRUE
Diff: 1
LO: 1.3: Explain the need for integrating analysis and intuition in strategic management.
AACSB: Written and oral communication
44) According to Albert Einstein, "Knowledge is far more important than intuition."
Answer: FALSE
Diff: 1
LO: 1.3: Explain the need for integrating analysis and intuition in strategic management.
AACSB: Written and oral communication
45) According to Peter Drucker "Imagination is more important than knowledge, because knowledge is limited, whereas imagination embraces the entire world."
Answer: FALSE
Diff: 2
LO: 1.3: Explain the need for integrating analysis and intuition in strategic management.
AACSB: Written and oral communication
46) Management by intuition can be defined as operating from the "I've-already-made-up-my-mind-don't-bother-me-with-the-facts mode."
Answer: FALSE
Diff: 2
LO: 1.3: Explain the need for integrating analysis and intuition in strategic management.
AACSB: Written and oral communication
47) An objective, logical, systematic, & non intuitive approach for making major decisions in an organization is a way to describe the strategic-management process.
Answer: FALSE
Diff: 3
LO: 1.3: Explain the need for integrating analysis and intuition in strategic management.
AACSB: Written and oral communication
48) Discuss the value of integrating intuition and analysis.
Answer: Most organizations can benefit from strategic management, which is based on integrating intuition and analysis in decision making. Choosing an intuitive or analytic approach to decision making is not an either-or proposition. Managers at all levels in an organization inject their intuition and judgment into strategic-management analyses. Analytical thinking and intuitive thinking complement each other. Operating from the "I've-already-made-up-my-mind-don't-bother-me-with-the-facts" mode is not management by intuition; it is management by ignorance. Drucker says, "I believe in intuition only if you discipline it. 'Hunch' artists, who make a diagnosis but don't check it out with facts, are the ones in medicine who kill people, and in management kill businesses." In a sense, the strategic-management process is an attempt both to duplicate what goes on in the mind of a brilliant, intuitive person who knows the business, and assimilates and integrates that knowledge using analysis to formulate effective strategies.
Diff: 2
LO: 1.3: Explain the need for integrating analysis and intuition in strategic management.
AACSB: Analytical thinking
49) Which individuals are most responsible for the success and failure of an organization?
A) Strategists
B) Financial planners
C) Personnel directors
D) Stakeholders
E) Human resource managers
Answer: A
Diff: 1
LO: 1.4: Define and give examples of key terms in strategic management.
AACSB: Written and oral communication
50) What are enduring statements of purpose that distinguish one business from other similar firms?
A) Policies
B) Mission statements
C) Objectives
D) Rules
E) Employee conduct guidelines
Answer: B
Diff: 2
LO: 1.4: Define and give examples of key terms in strategic management.
AACSB: Written and oral communication
51) An organization's vision statement
A) is a constant reminder to its employees of why the organization exists.
B) broadly charts the future direction of an organization.
C) addresses the basic question: "What is our business?"
D) answers the question: "What do we want to become?"
E) none of the above
Answer: D
Diff: 1
LO: 1.4: Define and give examples of key terms in strategic management.
AACSB: Written and oral communication
52) Generally, external opportunities and threats are
A) uncontrollable by a single organization.
B) unable to have a significant impact on an organization.
C) not worth monitoring and evaluating.
D) key functions in strategy implementation.
E) key functions in strategy exploitation.
Answer: A
Diff: 2
LO: 1.4: Define and give examples of key terms in strategic management.
AACSB: Written and oral communication
53) Specific results an organization seeks to achieve in pursuing its basic mission are
A) strategies.
B) rules.
C) objectives.
D) policies.
E) tenets.
Answer: C
Diff: 1
LO: 1.4: Define and give examples of key terms in strategic management.
AACSB: Written and oral communication
54) Internal ________ are controllable activities in an organization that are performed especially well.
A) opportunities
B) incompetencies
C) strengths
D) objectives
E) factors
Answer: C
Diff: 1
LO: 1.4: Define and give examples of key terms in strategic management.
AACSB: Written and oral communication
55) What are the means by which long-term objectives will be achieved?
A) Strategies
B) Strengths
C) Weaknesses
D) Policies
E) Opportunities
Answer: A
Diff: 2
LO: 1.4: Define and give examples of key terms in strategic management.
AACSB: Written and oral communication
56) Long-term objectives should be all of the following EXCEPT
A) measurable.
B) continually changing.
C) reasonable.
D) challenging.
E) consistent.
Answer: B
Diff: 2
LO: 1.4: Define and give examples of key terms in strategic management.
AACSB: Written and oral communication
57) What are guides to decision making that address repetitive or recurring situations called?
A) Strategies
B) Rules
C) Policies
D) Objectives
E) Goals
Answer: C
Diff: 1
LO: 1.4: Define and give examples of key terms in strategic management.
AACSB: Written and oral communication
58) The act of strengthening employees' sense of effectiveness by encouraging and rewarding them for participating in decision-making and exercising initiative and imagination is referred to as
A) authoritarianism.
B) proaction.
C) empowerment.
D) transformation.
E) delegation.
Answer: C
Diff: 3
LO: 1.4: Define and give examples of key terms in strategic management.
AACSB: Interpersonal relations and teamwork
59) The terms strategic management and strategic planning are used synonymously in this text.
Answer: TRUE
Diff: 1
LO: 1.4: Define and give examples of key terms in strategic management.
AACSB: Written and oral communication
60) A vision statement identifies the scope of a firm's operations in product and market terms.
Answer: FALSE
Diff: 1
LO: 1.4: Define and give examples of key terms in strategic management.
AACSB: Written and oral communication
61) A vision statement describes an organization's values and priorities.
Answer: FALSE
Diff: 1
LO: 1.4: Define and give examples of key terms in strategic management.
AACSB: Written and oral communication
62) Strategists are usually found in higher levels of management and have considerable authority for decision-making in the firm.
Answer: TRUE
Diff: 1
LO: 1.4: Define and give examples of key terms in strategic management.
AACSB: Written and oral communication
63) Middle managers are generally the most visible and critical of all strategic managers.
Answer: FALSE
Diff: 2
LO: 1.4: Define and give examples of key terms in strategic management.
AACSB: Analytical thinking
64) By the nature of what they do, strategists tend to have similar attitudes, values, ethics and concerns for social responsibility.
Answer: FALSE
Diff: 2
LO: 1.4: Define and give examples of key terms in strategic management.
AACSB: Ethical understanding and reasoning
65) A vision statement commonly answers the question, "What is our business?" whereas a mission statement is more likely to answer the question "What do we want to become?"
Answer: FALSE
Diff: 3
LO: 1.4: Define and give examples of key terms in strategic management.
AACSB: Written and oral communication
66) Because the position of Chief Executive Officer (CEO) has assumed much responsibility for strategic management in the last five years, the number of firms with the position of Chief Strategy Officer (CSO) has diminished drastically during this period.
Answer: FALSE
Diff: 2
LO: 1.4: Define and give examples of key terms in strategic management.
AACSB: Analytical thinking
67) A clear mission statement describes the values and priorities of an organization.
Answer: TRUE
Diff: 1
LO: 1.4: Define and give examples of key terms in strategic management.
AACSB: Written and oral communication
68) In a multidivisional firm, objectives should be established for the overall company and not for each division.
Answer: FALSE
Diff: 2
LO: 1.4: Define and give examples of key terms in strategic management.
AACSB: Written and oral communication
69) Objectives should be measurable, challenging, reasonable, consistent, and clear.
Answer: TRUE
Diff: 1
LO: 1.4: Define and give examples of key terms in strategic management.
AACSB: Written and oral communication
70) Annual objectives are long-term milestones that organizations must achieve to reach short-term objectives.
Answer: FALSE
Diff: 2
LO: 1.4: Define and give examples of key terms in strategic management.
AACSB: Written and oral communication
71) Annual objectives are especially important in strategy formulation.
Answer: FALSE
Diff: 2
LO: 1.4: Define and give examples of key terms in strategic management.
AACSB: Written and oral communication
72) Explain who strategists are and what they do in an organization.
Answer: Strategists are individuals who are most responsible for the success or failure of an organization. They help an organization gather, analyze and organize information. They track industry and competitive trends, develop forecasting models and scenario analyses, identify business threats and develop creative action plans. Strategic planners usually serve in a support or staff role. Usually found in higher levels of management, they typically have considerable authority for decision making in the firm. The CEO is the most visible and critical strategic manager. Any manager who has responsibility for a unit or division, responsibility for profit and loss outcomes, or direct authority over a major piece of the business is a strategic manager (strategist). In the last few years, the position of chief strategy officer (CSO) has emerged as a new addition to the top management ranks of many organizations. This corporate officer title represents recognition of the growing importance of strategic planning in business.
Diff: 2
LO: 1.4: Define and give examples of key terms in strategic management.
AACSB: Written and oral communication
73) Discuss the differences between vision and mission statements.
Answer: Many organizations today develop a vision statement that answers the question "What do we want to become?" Developing a vision statement is often considered the first step in strategic planning, preceding even development of a mission statement. Many vision statements are a single sentence. For example, the vision statement of Stokes Eye Clinic in Florence, South Carolina, is "Our vision is to take care of your vision." Mission statements are "enduring statements of purpose that distinguish one business from other similar firms. A mission statement identifies the scope of a firm's operations in product and market terms." It addresses the basic question that faces all strategists: "What is our business?" A clear mission statement describes the values and priorities of an organization. Developing a mission statement compels strategists to think about the nature and scope of present operations and to assess the potential attractiveness of future markets and activities. A mission statement broadly charts the future direction of an organization and serves as a constant reminder to employees of why the organization exists and what its founders envisioned.
Diff: 2
LO: 1.4: Define and give examples of key terms in strategic management.
AACSB: Analytical thinking
74) Which of the following is often considered to be the first step in strategic planning?
A) Developing a vision statement
B) Establishing goals and objectives
C) Making a profit
D) Developing a mission statement
E) Determining opportunities and threats
Answer: A
Diff: 1
LO: 1.5: Illustrate the comprehensive strategic-management model.
AACSB: Written and oral communication
75) Which of the following is part of the Strategic-Management Model?
A) Measure and evaluate performance
B) Develop mission and vision statements
C) Establish long-term objectives
D) Implement strategies
E) All of the above
Answer: E
Diff: 2
LO: 1.5: Illustrate the comprehensive strategic-management model.
AACSB: Written and oral communication
76) Identifying an organization's existing vision, mission, objectives, and strategies is the final step for the strategic management process.
Answer: FALSE
Diff: 2
LO: 1.5: Illustrate the comprehensive strategic-management model.
AACSB: Analytical thinking
77) Determining opportunities and threats is generally the first step in strategic planning.
Answer: FALSE
Diff: 2
LO: 1.5: Illustrate the comprehensive strategic-management model.
AACSB: Written and oral communication
78) Strategic management enables an organization to ________, instead of just responding to threats in its business environment.
A) be proactive
B) be immune to threats
C) avoid responsibility for shaping its future
D) relinquish control over its destiny
E) be reactive
Answer: A
Diff: 2
LO: 1.6: Describe the benefits of engaging in strategic management.
AACSB: Analytical thinking
79) How do line managers become "owners" of the strategy?
A) By attending top manager meetings
B) By executing plans formulated by other people
C) By involvement in the strategic-management process
D) By becoming a shareholder of the firm
E) By buying off top managers
Answer: C
Diff: 2
LO: 1.6: Describe the benefits of engaging in strategic management.
AACSB: Interpersonal relations and teamwork
80) Annually, ________ businesses in the United States fail.
A) exactly 100
B) less than 1,000
C) about 10,000
D) more than 100,000
E) almost 10 million
Answer: D
Diff: 1
LO: 1.6: Describe the benefits of engaging in strategic management.
AACSB: Written and oral communication
81) Organizations using strategic management are generally ________ than those that do not.
A) more profitable
B) more complex
C) less profitable
D) less successful
E) less complex
Answer: A
Diff: 2
LO: 1.6: Describe the benefits of engaging in strategic management.
AACSB: Written and oral communication
82) According to Greenley, strategic management offers all of the following benefits EXCEPT
A) increased discipline.
B) enhanced communication.
C) increased synergy.
D) increased resistance to change.
E) more effective allocation of time and resources.
Answer: D
Diff: 2
LO: 1.6: Describe the benefits of engaging in strategic management.
AACSB: Written and oral communication
83) There is a dramatic shift in mass retailing to
A) "trading up" and taking customers from more exclusive stores.
B) selling only the most expensive merchandise.
C) opening dramatically larger supercenters.
D) operating stores with less square footage.
E) cutting back on their online presence.
Answer: D
Diff: 2
LO: 1.6: Describe the benefits of engaging in strategic management.
AACSB: Analytical thinking
84) Anything that a firm does especially well compared to rival firms is referred to as
A) competitive advantage.
B) comparative disadvantage.
C) opportunity cost.
D) unsustainable advantage.
E) an external opportunity.
Answer: A
Diff: 1
LO: 1.6: Describe the benefits of engaging in strategic management.
AACSB: Written and oral communication
85) In mass retailing, big-box companies like Walmart, Best Buy, and Sears are
A) gaining competitive advantage over smaller stores.
B) participating in a dramatic shift to becoming bigger.
C) increasing the square-footage of their retail locations.
D) finding that less brick and mortar is better.
E) noticing a sharp decline in online purchases.
Answer: D
Diff: 2
LO: 1.6: Describe the benefits of engaging in strategic management.
AACSB: Written and oral communication
86) The fact that Apple has no manufacturing facilities of its own
A) has caused it to build up massive debt on its balance sheet.
B) has enabled it to remain financially lean.
C) has been problematic for Apple in terms of debt.
D) illustrates that having more fixed assets than rival firms can provide major competitive advantages in a global recession.
E) means that it is in the same position as Sony.
Answer: B
Diff: 2
LO: 1.6: Describe the benefits of engaging in strategic management.
AACSB: Written and oral communication
87) The Internet has transferred power from ________ to ________.
A) businesses; individuals
B) governments; businesses
C) individuals; businesses
D) businesses; governments
E) individuals; governments
Answer: A
Diff: 1
LO: 1.6: Describe the benefits of engaging in strategic management.
AACSB: Written and oral communication
88) Commitment and understanding may be the most important benefits of strategic management.
Answer: TRUE
Diff: 2
LO: 1.6: Describe the benefits of engaging in strategic management.
AACSB: Analytical thinking
89) The best approach for strategists is to carefully develop strategic plans themselves and then present them to operating managers to execute.
Answer: FALSE
Diff: 3
LO: 1.6: Describe the benefits of engaging in strategic management.
AACSB: Interpersonal relations and teamwork
90) Firms with planning systems more closely resembling strategic-management theory generally exhibit superior long-term financial performance relative to their industries.
Answer: TRUE
Diff: 2
LO: 1.6: Describe the benefits of engaging in strategic management.
AACSB: Written and oral communication
91) Low-performing firms typically underestimate their competitor's strengths and overestimate their own strengths.
Answer: TRUE
Diff: 2
LO: 1.6: Describe the benefits of engaging in strategic management.
AACSB: Written and oral communication
92) According to Greenley, some of the benefits of strategic management are increased discipline, enhanced communication, and more effective allocation of time and resources.
Answer: TRUE
Diff: 2
LO: 1.6: Describe the benefits of engaging in strategic management.
AACSB: Written and oral communication
93) Firms can be more proactive with strategic management.
Answer: TRUE
Diff: 2
LO: 1.6: Describe the benefits of engaging in strategic management.
AACSB: Written and oral communication
94) Anything a firm does especially well, compared to rival firms, could be considered a competitive advantage.
Answer: TRUE
Diff: 1
LO: 1.6: Describe the benefits of engaging in strategic management.
AACSB: Written and oral communication
95) Once a firm acquires a competitive advantage, it is usually able to sustain it indefinitely.
Answer: FALSE
Diff: 3
LO: 1.6: Describe the benefits of engaging in strategic management.
AACSB: Analytical thinking
96) While the number of people shopping online has increased, the average amount spent per person online has decreased.
Answer: FALSE
Diff: 2
LO: 1.6: Describe the benefits of engaging in strategic management.
AACSB: Written and oral communication
97) Most traditional retailers have tried in vain to use their online sales to boost in-store sales.
Answer: FALSE
Diff: 2
LO: 1.6: Describe the benefits of engaging in strategic management.
AACSB: Analytical thinking
98) In order for a firm to achieve sustained competitive advantage, a firm must continually adapt to changes in external trends and events and effectively formulate, implement, and evaluate strategies that capitalize upon those factors.
Answer: TRUE
Diff: 2
LO: 1.6: Describe the benefits of engaging in strategic management.
AACSB: Analytical thinking
99) Substantial research indicates that a healthier workforce can more effectively and efficiently implement strategies.
Answer: TRUE
Diff: 2
LO: 1.6: Describe the benefits of engaging in strategic management.
AACSB: Written and oral communication
100) List any five nonfinancial benefits to a firm that engages in strategic management, according to Greenley.
Answer: There are eight benefits stated by Greenley. Students are to list any five of the following: 1. increased discipline; 2. improved coordination; 3. enhanced communication; 4. reduced resistance to change; 5. increased forward thinking; 6. improved decision-making; 7. increased synergy; 8. more effective allocation of time and resources.
Diff: 2
LO: 1.6: Describe the benefits of engaging in strategic management.
AACSB: Written and oral communication
101) Explain the relationship between strategic management and competitive advantage. How can a firm achieve sustained competitive advantage?
Answer: Strategic management is about gaining and maintaining competitive advantage. Competitive advantage is anything a firm does especially well compared to rival firms. When a firm can do something that rival firms cannot do, or owns something that rival firms desire, that can represent a competitive advantage. Getting and keeping competitive advantage is essential for long-term success of an organization. A firm must strive to achieve sustained competitive advantage by 1: continually adapting to changes in external trends and events and internal capabilities, competencies and resources, and by 2: effectively formulating, implementing and evaluating strategies that capitalize upon those factors.
Diff: 3
LO: 1.6: Describe the benefits of engaging in strategic management.
AACSB: Analytical thinking
102) Which of the following is NOT a reason given for poor or no strategic planning in an organization?
A) Planning is viewed as a waste of time
B) Content with current success
C) Too busy "firefighting" to plan ahead
D) No monetary rewards for planning
E) Trust of management makes it unnecessary
Answer: E
Diff: 2
LO: 1.7: Explain why some firms do no strategic planning.
AACSB: Written and oral communication
103) The lack of monetary rewards is one cause of managers not engaging in strategic planning.
Answer: TRUE
Diff: 2
LO: 1.7: Explain why some firms do no strategic planning.
AACSB: Written and oral communication
104) Internal crises give an organization's managers extra time needed to plan ahead.
Answer: FALSE
Diff: 1
LO: 1.7: Explain why some firms do no strategic planning.
AACSB: Analytical thinking
105) List any five of the reasons given for why some firms do no strategic planning.
Answer: Ten reasons are stated; students should list any five of the following: 1. no formal training in strategic management; 2. no understanding of or appreciation for the benefits of planning; 3. no monetary rewards for doing planning; 4. no punishment for not planning; 5. too busy "firefighting" (resolving internal crises) to plan ahead; 6. to view planning as a waste of time, since no product/service is made; 7. laziness; effective planning takes time and effort; time is money; 8. content with current success; failure to realize that success today is not a guarantee for success tomorrow; even Apple Inc. is an example; 9. overconfident; 10. prior bad experience with strategic planning done sometime/somewhere.
Diff: 2
LO: 1.7: Explain why some firms do no strategic planning.
AACSB: Written and oral communication
106) All of these are pitfalls an organization should avoid in strategic planning EXCEPT
A) using plans as a standard for measuring performance.
B) using strategic planning to gain control over decisions and resources.
C) failing to involve key employees in all phases of planning.
D) too hastily moving from mission development to strategy formulation.
E) being so formal in planning that flexibility and creativity are stifled.
Answer: A
Diff: 2
LO: 1.8: Describe the pitfalls in actually doing strategic planning.
AACSB: Written and oral communication
107) Which of the following is NOT a pitfall an organization should avoid in strategic planning?
A) Failing to communicate the plan to employees
B) Involving all managers rather than delegating planning to a "planner"
C) Top managers not actively supporting the strategic-planning process
D) Doing strategic planning only to satisfy accreditation or regulatory requirements
E) Failing to create a collaborative climate supportive of change
Answer: B
Diff: 2
LO: 1.8: Describe the pitfalls in actually doing strategic planning.
AACSB: Written and oral communication
108) Making many intuitive decisions that conflict with the formal plan is a pitfall in strategic planning.
Answer: TRUE
Diff: 2
LO: 1.8: Describe the pitfalls in actually doing strategic planning.
AACSB: Written and oral communication
109) Managers must be very formal in strategic planning in order to foster flexibility and creativity.
Answer: FALSE
Diff: 1
LO: 1.8: Describe the pitfalls in actually doing strategic planning.
AACSB: Analytical thinking
110) Identify any five pitfalls in strategic planning for which management should watch out.
Answer: Thirteen pitfalls are stated. Students should list any five of the following: 1. using strategic planning to gain control over decisions and resources; 2. doing strategic planning only to satisfy accreditation or regulatory requirements; 3. too hastily moving from mission development to strategy formulation; 4. failing to communicate the plan to employees, who continue to work in the dark; 5. top managers making many intuitive decisions that conflict with the formal plan; 6. top managers not actively supporting the strategic-planning process; 7. failing to use plans as a standard for measuring performance; 8. delegating planning to a "planner" rather than involving all managers; 9. failing to involve key employees in all phases of planning; 10. failing to create a collaborative climate supportive of change; 11. viewing planning to be unnecessary or unimportant; 12. becoming so engrossed in current problems that insufficient or no planning is done; and 13. being so formal in planning that flexibility and creativity are stifled.
Diff: 2
LO: 1.8: Describe the pitfalls in actually doing strategic planning.
AACSB: Written and oral communication
111) Terms such as objectives, mission, strengths, and weaknesses were first formulated to address problems
A) on the battlefield.
B) in the boardroom.
C) on the trading floor.
D) in the military hierarchy.
E) in interpersonal relationships.
Answer: A
Diff: 2
LO: 1.9: Discuss the connection between business and military strategy.
AACSB: Written and oral communication
112) According to Webster's New World Dictionary, ________ is "the science of planning and directing large-scale military operations, of maneuvering forces into the most advantageous position prior to actual engagement with the enemy."
A) competitive advantage
B) war
C) strategy
D) formulation
E) business
Answer: C
Diff: 1
LO: 1.9: Discuss the connection between business and military strategy.
AACSB: Written and oral communication
113) Business or military success is
A) generally the happy result of accidental strategies.
B) undermined by the element of surprise.
C) the product of both attention to changing external and internal conditions and the insightful adaptations to those conditions.
D) unrelated to external conditions.
E) none of the above
Answer: C
Diff: 2
LO: 1.9: Discuss the connection between business and military strategy.
AACSB: Written and oral communication
114) Superior strategy formulation and implementation ________ an opponent's superiority in numbers and resources.
A) are irrelevant to
B) are not enough to surmount
C) can overcome
D) can lead to
E) unite
Answer: C
Diff: 1
LO: 1.9: Discuss the connection between business and military strategy.
AACSB: Written and oral communication
115) A strong ________ heritage underlies the study of strategic management.
A) military
B) government
C) political
D) social
E) cultural
Answer: A
Diff: 1
LO: 1.9: Discuss the connection between business and military strategy.
AACSB: Written and oral communication
116) Military strategy is based on an assumption of ________, whereas business strategy is based on an assumption of ________.
A) conflict; cooperation
B) conflict; competition
C) cooperation; conflict
D) competition; conflict
E) cooperation; competition
Answer: B
Diff: 2
LO: 1.9: Discuss the connection between business and military strategy.
AACSB: Written and oral communication
117) Both business and military organizations must ________ and ________ to be successful.
A) be impervious to change; continually improve
B) adapt to change; constantly improve
C) shun change; stay the course
D) be impervious to change; stay the course
E) none of the above
Answer: B
Diff: 2
LO: 1.9: Discuss the connection between business and military strategy.
AACSB: Written and oral communication
118) Military success is usually the happy result of accidental strategies, but business success is the product of continuous attention to changing conditions and insightful adaptations to those conditions.
Answer: FALSE
Diff: 1
LO: 1.9: Discuss the connection between business and military strategy.
AACSB: Written and oral communication
119) Despite some exceptions, business strategy is very different than military strategy.
Answer: FALSE
Diff: 2
LO: 1.9: Discuss the connection between business and military strategy.
AACSB: Analytical thinking
120) The element of surprise provides great competitive advantages in both military and business strategy.
Answer: TRUE
Diff: 1
LO: 1.9: Discuss the connection between business and military strategy.
AACSB: Written and oral communication
121) Both military and business strategy are formulated, implemented, and evaluated with an assumption of competition.
Answer: FALSE
Diff: 2
LO: 1.9: Discuss the connection between business and military strategy.
AACSB: Analytical thinking
122) Superior strategy formulation is an advantage, but it cannot overcome an opponent's superiority in numbers and resources.
Answer: FALSE
Diff: 2
LO: 1.9: Discuss the connection between business and military strategy.
AACSB: Analytical thinking
123) Compare and contrast business and military strategy.
Answer: In many respects, business strategy is like military strategy, and military strategists have learned much over the centuries that can benefit business strategists today. A key aim of both business and military strategy is "to gain competitive advantage." They both also try to use their own strengths to exploit competitor's weaknesses. Success is not the happy result of accidental strategies in either business or military organizations. The element of surprise provides great competitive advantages in both military and business strategy. Information systems that provide data on opponents' or competitors' strategies and resources are also vitally important. Finally, both business and military organizations must adapt to change and constantly improve to be successful. While business and military strategy are the same in many ways, they have one major difference—business strategy is formulated, implemented and evaluated with an assumption of competition, whereas military strategy is based on an assumption of conflict.
Diff: 2
LO: 1.9: Discuss the connection between business and military strategy.
AACSB: Analytical thinking
