ch 1

Question 1

T/F
Strategic management focuses on integrating management, marketing, finance/accounting, production/operations, research and development, and information systems to achieve organizational success.

Answer 1

TRUE

Question 2

T/F
Optimizing for tomorrow the trends of today is the purpose of strategic management.

Answer 2

FALSE

Question 3

T/F
Even though useful, strategic planning has been cast aside by corporate America since the early 1990s.

Answer 3

FALSE

Question 4

T/F
Resource allocation is included in strategy-formulation activities.

Answer 4

TRUE

Question 5

T/F
The terms strategic management and strategic planning are synonymous in this text.

Answer 5

TRUE

Question 6

T/F
A vision statement is, in essence, a company’s game plan.

Answer 6

FALSE

Question 7

T/F
Strategy implementation is often considered to be the most difficult stage in the strategic management process because it requires personal discipline, commitment, and sacrifice.

Answer 7

TRUE

Question 8

T/F
The final stage in strategic management is strategy implementation.

Answer 8

FALSE

Question 9

T/F
Strategy formulation, implementation and evaluation activities occur at three hierarchical levels in a large diversified organization: corporate, divisional and functional.

Answer 9

TRUE

Question 10

T/F
One of the fundamental strategy evaluation activities is reviewing external and internal
factors that are the bases for current strategies.

Answer 10

TRUE

Question 11

T/F
An objective, logical, systematic approach for making major decisions in an organization is a way to describe the strategic-management process.

Answer 11

TRUE

Question 12

T/F
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 12

TRUE

Question 13

T/F
Anything the firm does especially well compared to rival firms could be considered a competitive advantage.

Answer 13

TRUE

Question 14

T/F
Once a firm acquires a competitive advantage, they are usually able to sustain the competitive advantage indefinitely.

Answer 14

FALSE

Question 15

T/F
Although the Internet has increased in popularity, it has actually led to increases in company expenses.

Answer 15

FALSE

Question 16

T/F
While the number of people shopping online has increased, the average amount spent online has decreased.

Answer 16

FALSE

Question 17

T/F
One of the ways in which the Internet has transferred power from businesses to individuals is by making comparison-shopping quick and easy.

Answer 17

TRUE

Question 18

T/F
Most traditional retailers have tried in vain to use their online sales to boost in-store sales.

Answer 18

FALSE

Question 19

T/F
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 19

TRUE

Question 20

T/F
Strategists are usually found in higher levels of management and have considerable authority for decision-making in the firm.

Answer 20

TRUE

Question 21

T/F
The middle manager is the most visible and critical strategic manager.

Answer 21

FALSE

Question 22

T/F
All strategists have similar attitudes, values, ethics and concerns for social responsibility.

Answer 22

FALSE

Question 23

T/F
A vision statement answers the question, “What is our business?” whereas a mission statement answers, “What do we want to become?”

Answer 23

FALSE

Question 24

T/F
A clear mission statement describes the values and priorities of an organization.

Answer 24

TRUE

Question 25

T/F Strengths and weaknesses are determined relative to competitors.

Answer 25

TRUE

Question 26

T/F In a multidivisional firm, objectives should be established for the overall company and not for each division.

Answer 26

FALSE

Question 27

T/F Objectives should be measurable, challenging, reasonable, consistent and clear.

Answer 27

TRUE

Question 28

T/F Annual objectives are long-term milestones that organizations must achieve to reach short- term objectives.

Answer 28

FALSE

Question 29

T/F Annual objectives are especially important in strategy formulation.

Answer 29

FALSE

Question 30

T/F According to research, a healthier workforce can more effectively and efficiently implement strategies.

Answer 30

TRUE

Question 31

T/F Identifying an organization's existing vision, mission, objectives and strategies is the final step for the strategic management process.

Answer 31

FALSE

Question 32

T/F Once an effective strategy is designed, modifications are rarely required.

Answer 32

FALSE

Question 33

T/F Application of the strategic-management process is typically more formal in larger and well- established organizations.

Answer 33

TRUE

Question 34

T/F Followed by commitment, understanding is the most important benefit of strategic management.

Answer 34

TRUE

Question 35

T/F The best thing strategists can do is develop strategic plans themselves and then present them to operating managers to execute.

Answer 35

FALSE

Question 36

T/F The changes that occurred at Disney after Robert Iger took over as CEO exemplify the fact that more and more organizations are centralizing the strategic-management process.

Answer 36

FALSE

Question 37

T/F Firms with planning systems more closely resembling strategic-management theory generally exhibit superior long-term financial performance relative to their industry.

Answer 37

TRUE

Question 38

T/F Low-performing firms typically underestimate their competitor's strengths and overestimate their own firm's strengths.

Answer 38

TRUE

Question 39

T/F According to Greenley, strategic management provides a cooperative, integrated and enthusiastic approach to tackling problems and opportunities.

Answer 39

TRUE

Question 40

T/F The poor reward structure is one reason managers do not engage in strategic planning.

Answer 40

TRUE

Question 41

T/F Crises and fires in an organization allow managers the training and time for effective strategic planning.

Answer 41

FALSE

Question 42

T/F Making many intuitive decisions that conflict with the formal plan is one pitfall top managers should avoid in strategic planning.

Answer 42

TRUE

Question 43

T/F Managers must be very formal in strategic planning because formality induces flexibility and creativity.

Answer 43

FALSE

Question 44

T/F Many organizations mistakenly spend more time and effort on the implementation of a plan, than on the formulation of the plan itself.

Answer 44

FALSE

Question 45

T/F Strategic-management must be a self-reflective learning process that familiarizes managers and employees in the organization with key strategic issues and feasible alternatives for resolving those issues.

Answer 45

TRUE

Question 46

T/F Effective strategic management is ritualistic, predictable and formal.

Answer 46

FALSE

Question 47

T/F For the strategic planning process to be effective, organizations must continually strengthen the "good ethics is good business" policy.

Answer 47

TRUE

Question 48

T/F All firms have a strategy, even if it is informal, unstructured, and sporadic.

Answer 48

TRUE

Question 49

T/F Firms can be more proactive with strategic management.

Answer 49

TRUE

Question 50

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 50

C) achieve and maintain competitive advantage.

Question 51

Strategic management focuses on integrating management, ________, and information systems to achieve organizational success. A) marketing B) finance/accounting C) production/operations D) research and development E) all of the above

Answer 51

E) all of the above

Question 52

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?

Answer 52

Strategic management

Question 53

________ is used to refer to strategic formulation, implementation and evaluation, with ________ referring only to strategic formulation.

Answer 53

Strategic management; strategic planning

Question 54

During what stage of strategic management are a firm's specific internal strengths and weaknesses determined?

Answer 54

Formulation

Question 55

An important activity in ________ is taking corrective action.

Answer 55

strategy evaluation

Question 56

What step in the strategic development process involves mobilizing employees and managers to put strategies into action?

Answer 56

Implementing strategy

Question 57

What types of skills are especially critical for successful strategy implementation?

Answer 57

Interpersonal

Question 58

________ allows firms to sell products, advertise, purchase supplies, bypass intermediaries, track inventory, and eliminate paperwork.

Answer 58

E-commerce

Question 59

The Internet has transferred power from ________ to ________.

Answer 59

businesses, individuals

Question 60

The one factor that has most significantly impacted the nature and core of buying and selling in nearly all industries has been

Answer 60

the Internet.

Question 61

Which individuals are most responsible for the success and failure of an organization?

Answer 61

Strategists

Question 62

The first step in strategic planning is generally

Answer 62

developing a vision statement.

Question 63

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 63

D) answers the question: "What do we want to become?"

Question 64

Usually, external opportunities and threats are

Answer 64

uncontrollable by a single organization.

Question 65

What are the means by which long-term objectives will be achieved?

Answer 65

Strategies

Question 66

The strategic-management process

Answer 66

is a continuous process.

Question 67

According to research, organizations using strategic management are ________ than those that do not.

Answer 67

more profitable

Question 68

What is not a reason given for poor or no strategic planning in organizations?

Answer 68

Trust of management

Question 69

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 69

A) using plans as a standard for measuring performance.

Question 70

What 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 70

B) Involving all managers rather than delegating planning to a "planner"