Chapter 1

*b. Generalship

"Strategy" derives from a Greek word meaning: a. The art of arranging men in a battlefield b. Generalship c. The art of maintaining a state's security d. Maintaining ethical and spiritual purity

*b. Corporate level strategy is the domain of headquarters executives, while division managers are in charge of their business level strategies

Between the two levels of strategy, the division of responsibility is consistent with the following principle: a. There is no principle but only limited rationality and trial-and-error processes to find the best allocation between different levels of management b. Corporate level strategy is the domain of headquarters executives, while division managers are in charge of their business level strategies c. Corporate level strategy is the domain of the parent company; business level strategy is handled by the functional department managers d. Corporate and business level strategies are not any specific organizational level's responsibility because of the principle of maximum delegation and decentralization

*a. Strategic fit

If a firm adjusts its strategy to ensure it is consistent with its external environment, it benefits from a: a. Strategic fit b. Strategic leadership c. Location within an attractive industry d. A license to operate

*b. Sun Tzu's Art of War

The book that is considered as the first treatise on strategy is: a. Carl Von Clausewitz's Vom Kriege (On war) b. Sun Tzu's Art of War c. The Bible d. Niccolo Machiavelli's Dell'arte della Guerra (The art of war)

*d. All of the above

The essence of strategy is: a. Making choices b. Doing things differently c. Where and how to compete d. All of the above

*c. Firms increasingly depending upon other firms through outsourcing and strategic alliances

The increasingly complex business environment of the 21st century has resulted in: a. Firms shifting their emphasis towards the growth markets of Asia, Africa, and Latin America. b. Firms abandoning shareholder value maximization in favor of maximizing stakeholder interests c. Firms increasingly depending upon other firms through outsourcing and strategic alliances d. Firms embracing digital technologies

*a. Distinguishing opportunities from threats and strengths from weaknesses is often difficult

The main problem of SWOT as a framework for strategy analysis is that: a. Distinguishing opportunities from threats and strengths from weaknesses is often difficult b. It has been around for five decades and has now been superseded by more sophisticated analytical frameworks c. It is focused on strategy formulation and fails to take account of strategy implementation d. It is so widely used that it no longer has any novelty.

*c. A more turbulent business environment that became increasingly difficult to predict

The main reason for the transition from corporate planning to strategic management during the latter half of the 1970s was: a. The influence of Michael Porter b. Disappointing returns of corporate diversification c. A more turbulent business environment that became increasingly difficult to predict d. Growing disillusionment with central planning

*d. Answers a and c

The notion of "strategic fit": a. Is common in strategic literature but means different things to different experts b. Implies deep coherence across all functions within the organization c. Expresses how well a firm's strategy fits its internal environment d. Answers a and c

*b. Corporate strategy is concerned with where the firm competes; business strategy with how it competes

The primary distinction between corporate strategy and business strategy is: a. Corporate strategy is the responsibility of the CEO, business strategy is formulated by the heads of business units b. Corporate strategy is concerned with where the firm competes; business strategy with how it competes c. Corporate strategy is concerned with establishing competitive advantage; business strategy with strategy implementation in individual businesses d. Corporate strategy is concerned with the long-term performance of the firm; business strategy with resource deployment.

*c. Both of the above

Business strategy defines: a. the way a firm competes in a particular industry or market b. the way a firm establishes a competitive advantage over its rivals within a specific industry or market c. Both of the above d. Neither of the above

*a. the scope of the firm in terms of industries and markets, and the allocation of its resources

Corporate strategy is concerned with: a. the scope of the firm in terms of industries and markets, and the allocation of its resources b. a firm's relationships with its principal stakeholders c. the corporate governance of each individual business d. None of the above

*b. To the role of resources and capabilities as a foundation for firm strategy

During the 1990s, the focus of strategy analysis shifted: a. From corporate planning to strategic management b. To the role of resources and capabilities as a foundation for firm strategy c. To the application of microeconomics to analyze the sources of firm profitability d. From the structure-based approach to the value-added perspective

*b. Clear goals, deep understanding the competitive environment, careful resource appraisal, and effective implementation

For both individuals and businesses, successful strategies are characterized by: a. Unrelenting commitment to ambitious goals b. Clear goals, deep understanding the competitive environment, careful resource appraisal, and effective implementation c. Meticulous planning d. The possession of superior abilities and resources which are then deployed to build competitive advantage.

*a. Provided a battleground for the debate opposing the Design School and the Learning School

Honda's successful entry into the US motorcycle market has: a. Provided a battleground for the debate opposing the Design School and the Learning School b. Been an extraordinary epic where players were discovering the field while dealing with its traps c. Shown that the rational and analytical model was superior to the emergence model because only intensive analysis and forecasting were able to fuel this success story d. Shown the difficulty of entering the US market for Japanese firms because of the cultural, organizational, and legal gaps

*a. Corporate strategy defines the scope of a firm's activities, while business strategy focuses on how to beat the competition in a specific product market

How do corporate level strategy and business level strategy differ? a. Corporate strategy defines the scope of a firm's activities, while business strategy focuses on how to beat the competition in a specific product market b. Corporate strategy defines the scope of a firm's structure, while business strategy emphasizes the relationship of each business with its environment (state, regulators, etc.) c. Corporate strategy focuses on the overall strategic plan, while business strategy focuses on implementing strategic decisions in each product market d. Corporate level strategy is concerned with long term goals, while business level strategy focuses on short term sustainability

*a. How turbulent and unpredictable is the external environment of the organization

In all organizations, strategy making involves a combination of top-down strategy design and decentralized mergence. The balance between the two depends mainly upon: a. How turbulent and unpredictable is the external environment of the organization b. The extent to which decision making is centralized c. The commitment of the organization to experimentation d. The extent to which the organization has a formalized process of strategic planning.

*a. A combination of design and emergence

In regard to strategy making, most firms are likely to exhibit: a. A combination of design and emergence b. A decentralized, bottom-up process c. An interaction between strategic design, through organizational processes, and strategic enactment through decisions made by all d. Limited involvement by boards of directors

*a. The application of industrial organization economics for analyzing industry profitability

In the 1980s, Michael Porter pioneered: a. The application of industrial organization economics for analyzing industry profitability b. The development of "PIMS" at the Strategic Planning Institute c. The first synthesis of the resource and capability approach d. The application of game theory to strategic management

*b. Tactics relate to specific actions whereas strategy relates to the overall plan

In the military field, we generally make the following distinction between strategy and tactics: a. Tactics comprise the overall plan whereas strategy focuses on specific actions b. Tactics relate to specific actions whereas strategy relates to the overall plan c. Tactics encompass specific political actions within the firm whereas strategy is the overall plan for deploying resources to establish a favorable position d. Tactics form the overall plan whereas strategy is concerned with the maneuvers to win battles

*c. The objective of military strategy is to defeat the enemy; business strategy seeks coexistence rather than annihilation

Military strategy and business strategy differ in that: a. There is no concept like tactics in business b. Good military strategist must first be a good military tactician - practicing it in the field first c. The objective of military strategy is to defeat the enemy; business strategy seeks coexistence rather than annihilation d. None - there is no conceptual difference

*d. An integrated, consistent set of activities designed to maximize productivity and minimize operating costs.

Ryanair's strategic position is as Europe's lowest-cost airline may be attributed to: a. The willingness of its CEO, Michael O'Leary, to challenge conventional notions of customer and employee satisfaction b. Its use of secondary airports where costs are lower c. The high operating costs of major airlines such as British Airways, Lufthansa, and Air France-KLM on short-haul routes d. An integrated, consistent set of activities designed to maximize productivity and minimize operating costs.

*b. The consistency of a firm's strategy with its external and internal environments

Strategic fit refers to: a. The need for a firm's strategy to be consistent with its vision, mission, and culture b. The consistency of a firm's strategy with its external and internal environments c. The need for a firm's strategy to be unique d. The need for a firm's strategy to meet the needs of all its stakeholders, not just shareholders

*d. All of the above

Strategic goals should be: a. Simple b. Consistent c. Long term d. All of the above

*d. All of the above

Strategy improves decision-making by: a. Reducing the number of choices being considered b. Integrating and pooling the knowledge of different members of the organization c. Facilitating the use of analytic tools d. All of the above

b. a concept that signifies the immensity of potential new markets

The expression "blue oceans" in strategic management is: a. only a figure of speech b. a concept that signifies the immensity of potential new markets c. a concept employed in the US Navy's strategic planning process d. an expression coined by business school professors to make their book more appealing to practicing managers

*c. Greater for organizations that both charge for their services and face competition than those which are monopolists providing services free of charge.

The applicability of the tools and techniques of strategy analysis to not-for-profit organizations is: a. Greater for organizations that face competitions than those that do not. b. Greater for organizations that charge for their services than those which do not c. Greater for organizations that both charge for their services and face competition than those which are monopolists providing services free of charge. d. Is severely limited by the lack of a profit motive.

*b. Achieving success

The primary purpose of strategy is: a. Being better than rivals b. Achieving success c. Satisfying all stakeholders d. Being an excellent "corporate citizen"

*b. They share common concepts and principles

The principal similarity between business and military strategy is that: a. They share the same objective: to annihilate rivals b. They share common concepts and principles c. The nature of leadership is much the same whether in a military or business context d. They are both concerned with tactical maneuvers that can establish positions of advantage.

*c. Have a consistency of direction based on clear goals

The successful careers of both Queen Elizabeth II and Lady Gaga may be attributed to the fact that both: a. Have used dressing up as a means of attracting attention and establishing identity b. Have a knack for being in the right place at the right time c. Have a consistency of direction based on clear goals d. Have built a loyal fan base based on astute use of the media.

*a. a firm's corporate and business strategies

The two questions of "where and how to compete" define: a. a firm's corporate and business strategies b. a firm's strategic management process c. a firm's vision and mission d. a firm's values and culture

*b. strategy becomes a vital tool to navigate the firm through "stormy seas"

When the environment becomes more turbulent, unpredictable, and full of new opportunities: a. strategy appears to not be very useful b. strategy becomes a vital tool to navigate the firm through "stormy seas" c. strategy should be put into the hands of external consultants d. strategy becomes an "impossible exercise"