Chapter 1 4322

Peter Senge, of MIT, recognized three types of leaders. __________ champion and guide ideas, create a learning infrastructure, and establish a domain for taking action.

Executive leaders

According to the text, a mission statement is an overarching statement that is massively inspiring, long term, and only discusses the purpose of the company

FALSE

Business-level strategy focuses on two issues, (1) what businesses to compete in, and (2) how businesses can be managed to achieve synergy.

FALSE

Corporate-level strategy addresses how firms compete and outperform their rivals as well as achieve and sustain competitive advantages

FALSE

Decisions by Boards of Directors are always consistent with shareholder interests.

FALSE

Former Chrysler vice chairman Robert Lutz stated: "We are here to serve the shareholder and create shareholder value. I insist that the only person who owns the company is the person who paid good money for it." This is an example of a symbiotic approach to stakeholder management.

FALSE

Management innovations such as total quality, benchmarking, and business process reengineering often lead to sustainable competitive advantage.

FALSE

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

FALSE

Nortel, like other firms, suffered from a drop in overall industry demand for telecommunications equipment during 2000 and 2001. According to the text, this would be an example of the "romantic" perspective of leadership.

FALSE

One of the benefits of crowdsourcing is that stakeholders are restricted to one narrow role.

FALSE

Organizational goals and objectives should be vague in order to allow for changes in strategy.

FALSE

Some excellent examples of mission statements are: "To be the happiest place on earth" (Disneyland) and "Restoring patients to full life" (Medtronic).

FALSE

Stockholders in a company are the only individuals with an interest in the financial performance in the company.

FALSE

Strategic management should only include short-term objectives. Long-term objectives are covered in the organization's vision statement.

FALSE

Strategic objectives should be measurable, specific, appropriate, and realistic, but not constrained by time deadlines.

FALSE

The best firms always realize their intended strategy.

FALSE

The concept of "shared value" redefines the purpose of the corporation as creating shared value in order to create a more even distribution of the profits to all employees, not just top level executives.

FALSE

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

FALSE

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

FALSE

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.

Internal networkers

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

Strategy analysis

__________ involves ensuring proper strategic controls and organizational designs.

Strategy implementation

A mission statement encompasses both the purpose of the company as well as the basis of competition and competitive advantage.

TRUE

According to the text, formulating strategy includes taking into consideration strategy at the business, international, and corporate levels. In addition managers must formulate effective entrepreneurial initiatives

TRUE

Effective leadership can play a large role in fostering corporate entrepreneurship. Corporate entrepreneurship can have a very positive impact on a firm's bottom line.

TRUE

Objectives in organizations should be clear, stated, and known by employees throughout the organization.

TRUE

Organizational vision statements are the beginning point for the hierarchy of goals throughout the organization. An organization's vision statement should be massively inspiring, overarching, and long term.

TRUE

Shell, NEC, and Procter & 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.

TRUE

Social responsibility is the idea that organizations are not only accountable to stockholders but also to the community-at-large.

TRUE

Stockholders, employees, and the community-at-large are among a firm's stakeholders.

TRUE

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

TRUE

Strategic management includes strategy analysis, strategy formulation, and strategy implementation.

TRUE

Strategic management recognizes the trade-offs between effectiveness and efficiency.

TRUE

Strategic objectives are more specific than vision statements.

TRUE

Symbiosis is the ability to recognize interdependencies among the interests of multiple stakeholders within and outside an organization.

TRUE

Effective vision statements include

a brief statement of the company's direction.

Strategy formulation and implementation is a challenging ongoing process. To be effective, it should involve A. the CEO and the board of directors. B. the board of directors, CEO, and CFO. C. line and staff managers. D. all of these.

all of these.

According to the text, the strategic management process entails three ongoing processes:

analyses, decisions, and actions

According to Henry Mintzberg, the realized strategies of a firm

are a combination of deliberate and emergent strategies.

"Effectiveness" is often defined as

doing the right thing.

Members of Boards of Directors are

elected by the shareholders as their representatives.

The four key attributes of strategic management include all of the following EXCEPT:

emphasis on the attainment of short-term objectives.

In contrast to an organization's vision, its mission should

encompass both the purpose of the company as well as the basis of competition.

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

every company is trying to implement them and hence it does not make a company different from others.

Vision statements are used to create a better understanding of the organization's overall purpose and direction. Vision statements

evoke powerful and compelling mental images.

Fortune Brands states they will "cut corporate overhead costs by $30 million a year." This is an example of a

financial strategic objective.

According to the text, the "triple bottom line" approach to corporate accounting includes three components:

financial, environmental, and social.

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

functional areas work together to attain overall goals.

In large organizations, conflicts can arise between functional areas. In order to resolve these conflicts, strategic objectives

help resolve conflicts through their common purpose.

Stakeholders are

individuals, groups, and organizations who have a stake in the success of the organization.

According to Henry Mintzberg, decisions following from a firm's strategic analysis are its

intended strategy.

All of the following are ambidextrous behaviors EXCEPT:

intensely focusing on one's own responsibilities and maximizing the output of one's department in an organization.

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

interests of the stockholders are not the only interests that matter.

"We want to be the top-ranked supplier to our customers." (PPG) This is an example of a

nonfinancial strategic objective.

There are several perspectives of competition. One perspective is zero-sum thinking. Zero-sum thinking means that

one can only gain at the expense of someone else.

An organization's mission statement and vision statement set the overall direction of the organization. Strategic objectives

operationalize the mission statement.

While working to prioritize and fulfill their responsibilities, members of an organization's board of directors should

represent the interests of the shareholders.

A CEO made a lot of mistakes such as committing errors in assessing the market and 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.

romantic

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

romantic and external control

Outback Steakhouse has developed a sophisticated quantitative model and found that there were positive relationships between employee satisfaction, customer satisfaction, and financial results. According to the text, this is an example of __________

stakeholder symbiosis.

Managers should do more than just focus on short-term financial performance. One concept that helps managers do this is stakeholder symbiosis. This means that

stakeholders are dependent on each other for their success.

The four key attributes of strategic management include the idea that

strategy must be directed toward overall organizational goals and objectives.

Crowdsourcing can be defined as

tapping the latent talent of the online crowd.

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

the expectation that business will strive to improve the overall welfare of society.

The three participants in corporate governance are

the shareholders, board of directors, and management.

Successful organizations are effective in motivating people. Employees work best when

they are striving toward specific goals.

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

throughout the organization

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

throughout the organization.

WellPoint Health Network states: "WellPoint will redefine our industry: through a new generation of consumer-friendly products that put individuals back in control of their future." This is an example of a

vision statement.

Examples of __________ include: "To be the happiest place on earth" (Disneyland), and "Restoring patients to full life" (Medtronic).

vision statements

The hierarchy of organizational goals is in this order (least specific to most specific):

vision statements, mission statements, strategic objectives.

The "organizational versus individual rationality" perspective suggests that

what is best for a functional area may not be best for the organization.