Chapter 2 Review Quiz

CrossFit operates on an affiliate model in which individual gyms—referred to as boxes—pay to affiliate with CrossFit HQ, which, in turn, provides certain benefits such as training, certification, resources, and qualifications for elite-level sporting events. During late spring 2020, CrossFit HQ and its founder-CEO, Greg Glassman, came under pressure from some of its sponsors and affiliates for not speaking out about important social issues related to civil rights and racial equality, with questions about where the company and its leader stood on the issue of protests that were at the time underway across the United States and in other parts of the world. As a result, many sponsors and affiliates cut ties with CrossFit. Who should oversee CrossFit's response strategy? a. CrossFit's board of directors should oversee the response to approve or disapprove of the strategy formulated and proposed by the company's management. b. CrossFit's chief strategic planning officer, who should report directly to the company's CEO and board of directors. should oversee the response. c. Because each CrossFit manager has a strategy-making role (ranging from major to minor) for his or her area of responsibil

a. CrossFit's board of directors should oversee the response to approve or disapprove of the strategy formulated and proposed by the company's management.

A company's strategic plan consists of a. a vision of where it is headed, a set of performance targets, and a strategy to achieve them. b. a company's plans for improving value-creating internal processes. c. a strategic vision, a strategy, and a business model. d. its balanced scorecard and its business model. e. its strategy and management's specific, detailed plans for implementing it.

a. a vision of where it is headed, a set of performance targets, and a strategy to achieve them.

A company's direction, objectives, and strategy a. are never final, as managing strategy is an ongoing, dynamic process. b. never have to be revisited, even if time pressures or internal conditions warrant. c. are primarily a now-and-then task. d. are insulated from disruptive changes that a company might experience in its external environment. e. are set in stone as the end of the planning process.

a. are never final, as managing strategy is an ongoing, dynamic process.

Functional-area strategies a. concern the actions, approaches, and practices to be employed in managing particular functions within a business. b. are concerned with how to unify the firm's several different operating strategies into a cohesive whole. c. are normally crafted by operating-level managers. d. specify how to build and strengthen the skills, expertise, and competencies needed to execute operating-level strategies successfully. e. support and add power to the corporate-level strategy.

a. concern the actions, approaches, and practices to be employed in managing particular functions within a business.

The strategy formulation, strategy execution process a. embraces the tasks of developing a strategic vision, setting objectives, crafting a strategy, implementing and executing the strategy, and then monitoring developments and initiating corrective adjustments in light of experience, changing conditions, and new opportunities. b. is principally concerned with sizing up an organization's internal and external situation, so as to be prepared for the challenge of developing a sound business model. c. is usually delegated to members of a company's board of directors so as not to infringe on the time of busy executives. d. is primarily the responsibility of top executives and the board of directors; very few managers below this level are involved. e. includes establishing a company's mission, developing a business model aimed at making the company an industry leader, and crafting a strategy to implement and execute the business model.

a. embraces the tasks of developing a strategic vision, setting objectives, crafting a strategy, implementing and executing the strategy, and then monitoring developments and initiating corrective adjustments in light of experience, changing conditions, and new opportunities.

You have been hired to oversee the strategy execution process at Venmo, a mobile payments subsidiary of PayPal. Your primary tasks would include a. ensuring policies and procedures facilitate rather than impede effective execution. b. taking punitive actions against those staff that are unable to achieve performance objectives. c. engendering a company culture and work climate that impedes successful strategy implementation and execution. d. exerting your power to drive implementation forward and improve on how the strategy is being executed. e. surveying employees for their opinions about how to implement strategies for cost reductions and improvements in employee morale and job satisfaction.

a. ensuring policies and procedures facilitate rather than impede effective execution.

You have been asked to evaluate the vision statements of Whole Foods, Keurig Dr. Pepper, Caterpillar, and Nike. Which one of the following is not a characteristic of an effectively worded strategic vision statement? a. lengthy, too reliant on superlatives, not memorable, and unfocused b. graphic (paints a picture of the kind of company management is trying to create and the market position or positions the company is striving to stake out) c. focused (is specific enough to provide guidance to managers when making decisions and allocating resources) d. aspirational (is forward-looking, describes the strategic course that management has charted and the kinds of product-market-customer-technology changes that will help the company prepare for the future) e. easy to communicate (is explainable in 10 to 15 minutes, can be reduced to a memorable slogan)

a. lengthy, too reliant on superlatives, not memorable, and unfocused

You are the owner of the Voracious Vegetarian, a single-business healthy fast-food restaurant. What would be your company's strategy-making hierarchy? a. business strategy, divisional strategies, and departmental strategies b. business strategy, functional strategies, and operating strategies c. business strategy, divisional strategy, and operating strategy d. managerial strategy, business strategy, and divisional strategies e. corporate strategy, divisional strategies, and departmental strategies

b. business strategy, functional strategies, and operating strategies

Top management's views about where the company is headed and what its future product-customer-market-technology will be a. indicates what the company's long-term strategic plan is. b. constitutes the strategic vision for the company. c. indicates what kind of business model the company is going to have in the future. d. serves to define the company's mission. e. signals what the firm's strategy will be.

b. constitutes the strategic vision for the company.

Crafting and executing a company's strategy is an ongoing, continuous process consisting primarily of a. hiring outside consultants to execute any chosen strategy. b. effectively developing a strategic vision and mission, setting objectives, monitoring developments, evaluating performance, and initiating corrective adjustments in the company's vision, mission, objectives, and strategy. c. achieving financial performance outcomes on a regular, sustainable basis. d. developing a set of values to safeguard the company from criticism of its practices. e. choosing employees who can support the strategy execution and strive for change.

b. effectively developing a strategic vision and mission, setting objectives, monitoring developments, evaluating performance, and initiating corrective adjustments in the company's vision, mission, objectives, and strategy.

The task of stitching together a strategy a. should be dictated by what is comfortable to management from a risk perspective and what is acceptable in terms of capital requirements. b. entails addressing a series of "hows": how to grow the business, how to please customers, how to outcompete rivals, how to respond to changing market conditions, and how to achieve strategic and financial objectives. c. requires trying to copy the strategies of industry leaders as closely as possible. d. is primarily an exercise in deciding which of several freshly emerging market opportunities to pursue. e. is mainly an exercise in good planning.

b. entails addressing a series of "hows": how to grow the business, how to please customers, how to outcompete rivals, how to respond to changing market conditions, and how to achieve strategic and financial objectives.

A company's values relate to such things as a. whether it will emphasize stock price appreciation or higher dividend payments to shareholders, and whether it will put more emphasis on the achievement of short-term performance targets or long-range performance targets. b. fair treatment, integrity, ethical behavior, innovativeness, teamwork, top-notch quality, superior customer service, social responsibility, and community citizenship. c. how it will balance its pursuit of financial objectives against the pursuit of its strategic objectives. d. how it will balance the pursuit of its business purpose/mission against the pursuit of its strategic vision. e. All of these choices are correct.

b. fair treatment, integrity, ethical behavior, innovativeness, teamwork, top-notch quality, superior customer service, social responsibility, and community citizenship.

Company objectives a. play the important role of establishing the direction in which the company needs to be headed. b. need to be broken down into performance targets for each of its separate businesses, product lines, functional departments, and individual work units. c. should be set in a manner that does not conflict with the performance targets of lower-level organizational units. d. are important because they help guide managers in deciding what the company's strategy map should look like. e. are needed only on a companywide basis related to a company's short-term and long-term profitability.

b. need to be broken down into performance targets for each of its separate businesses, product lines, functional departments, and individual work units.

The following scenario does not contain the key characteristics of a well-stated organizational objective: a. Jet Blue's plans to grow 150 flights a day to 200 over the coming years. b. lululemon's plans to expand its brand globally through international market penetration, opening 11 new stores in Asia and Europe, which include the first stores in China, South Korea, and Switzerland. c. Yahoo!'s created extreme stretch goals to return that company to profitability and raise its stock price. d. General Mills' plans to build a more agile organization by streamlining support functions by allowing for more fluid use of resources and idea sharing around the world, enhancing e-commerce know-how to capture more growth in this emerging channel. e. TOMS Shoes' one-for-one model builds the cost of giving away a pair of shoes into the price of each pair it sells, enabling the company to make a profit while still giving away shoes to the needy.

c. Yahoo!'s created extreme stretch goals to return that company to profitability and raise its stock price.

The difference between the concept of a company mission statement and the concept of a strategic vision is that a. a mission statement deals with "where we are headed," whereas a strategic vision provides the critical answer to "how will we get there." b. the mission is to make a profit, whereas a strategic vision concerns how to attract customers. c. a mission statement typically concerns a company's present business scope ("who we are and what we do"), whereas the principal concern of a strategic vision is with the company's future business scope (long-term direction and future product-customer-market-technology focus). d. a mission statement deals with what to accomplish on behalf of shareholders and a strategic vision concerns what to accomplish on behalf of customers. e. a mission statement concerns what to do to achieve short-run objectives and a strategic vision concerns what to do to achieve long-run performance targets.

c. a mission statement typically concerns a company's present business scope ("who we are and what we do"), whereas the principal concern of a strategic vision is with the company's future business scope (long-term direction and future product-customer-market-technology focus).

A balanced scorecard that includes both strategic and financial performance targets is a conceptually strong approach for judging a company's overall performance because a. a balanced scorecard approach pushes managers to avoid setting objectives that reflect the results of past decisions and organizational activities, and, instead, to set objectives that will serve as leading indicators of a company's future financial performance. b. it assists managers in putting roughly equal emphasis on short-term and long-term performance targets. c. financial performance measures are lagging indicators that reflect the results of past decisions and organizational activities, whereas strategic performance measures are leading indicators of a company's future financial performance. d. it entails putting equal emphasis on good strategy execution and good business model execution. e. it more or less forces managers to put equal emphasis on financial and strategic objectives.

c. financial performance measures are lagging indicators that reflect the results of past decisions and organizational activities, whereas strategic performance measures are leading indicators of a company's future financial performance.

Effectively communicating the strategic vision down the line to lower-level managers and employees has the value of a. making it easier for top executives to set strategic objectives. b. All of these choices are correct. c. not only explaining "where we are going and why" but, more importantly, also inspiring and energizing company personnel to unite to get the company moving in the intended direction. d. helping company personnel understand why "making a profit" is so important. e. helping lower-level managers and employees better understand the company's business model.

c. not only explaining "where we are going and why" but, more importantly, also inspiring and energizing company personnel to unite to get the company moving in the intended direction.

A benefit of a vivid, engaging, and convincing strategic vision is a. helping an organization prepare for to make short-term moves in the marketplace. b. avoiding the need for consensus in support of top management's own view about the company's long-term direction. c. providing a beacon for lower-level managers in forming departmental missions. d. increasing risk of rudderless decision making by managers at all levels of the organization. e. creating debate among company personnel behind managerial efforts to get the company moving in the intended direction.

c. providing a beacon for lower-level managers in forming departmental missions.

A company's strategic vision concerns a. why the company does certain things in trying to please its customers. b. what future actions the enterprise will likely undertake to outmaneuver rivals and achieve a sustainable competitive advantage. c. management's story line of how it intends to make a profit with the chosen strategy. d. a company's directional path and future product-customer-market-technology focus. e. "who we are and what we do."

d. a company's directional path and future product-customer-market-technology focus.

Management is obligated to monitor new external developments, evaluate the company's progress, and make corrective adjustments in order to a. determine whether the company has a balanced scorecard for judging its performance. b. determine whether the company's business model is well matched to changing market and competitive circumstances. c. determine what changes should be made to its customer value proposition. d. decide whether to continue or change the company's strategic vision, objectives, strategy and/or strategy execution methods. e. stay on track in achieving the company's mission and strategic vision.

d. decide whether to continue or change the company's strategic vision, objectives, strategy and/or strategy execution methods.

Proficient strategy execution a. is achieved unevenly, coming quickly in some areas and more slowly in others. b. entails accomplishing desired outcomes and then examining what went right and what went wrong. c. is an every-now-and-then task. d. is always the product of much organizational learning. e. directly involves only the CEO and board of directors of the firm.

d. is always the product of much organizational learning.

In spring 2022, the CEO of Delta Airlines, a major international air carrier, was contending with an uncertain rebound in business passenger traffic, while in the meantime fuel prices and labor costs are expected to rise in 2022. Meanwhile, a passenger boycott was looming because the company is located in Georgia, a U.S. state that has recently passed new restrictive voting laws. Which of the following statements best expresses how Delta Airlines should proceed to balance its goal of increasing shareholder value with its mission that states, "We employees, customers, and community partners together form a force for positive local and global change, dedicated to bettering standards of living and the environment where we and our customers live and work"? a. Delta needs to balance its pursuit of financial objectives against the pursuit of its strategic objectives. b. Delta needs to balance the pursuit of its business purpose/mission against the pursuit of its strategic vision. c. Delta needs to decide whether it will emphasize stock price appreciation or higher dividend payments to shareholders. d. Delta needs to decide whether it will put more emphasis on the achievement of short-term perf

e. Delta needs to balance its pursuit of financial objectives against its company values such as fair treatment, integrity, ethical behavior, innovativeness, teamwork, top-notch quality, superior customer service, social responsibility, and community citizenship.

A company's mission statement typically addresses which of the following questions? a. What approach should we take to achieve sustainable competitive advantage? b. Why have we chosen a particular business model to achieve our objectives and our vision? c. Where are we going and what should our strategy be? d. What objectives and level of performance do we want to achieve? e. Who are we? What do we do? Why are we here?

e. Who are we? What do we do? Why are we here?

You have been hired as a strategic planning manager by Brad Black and Susan Griffin-Black, cofounders and top managers of one of the last remaining large independently-owned organic beauty companies, EO Products. What business strategy could the partners use to strengthen EO Products' market position and build a competitive advantage over its rivals? a. Provide guidance to EO Products towards which new markets to enter, and how to best enter these new markets. b. Improve the combined performance of the set of businesses EO Products has diversified into by capturing cross-business synergies. c. Grow EO Products by acquisition, creation of a strategic alliance, or through internal development. d. Address the questions of what businesses EO Products should hold or divest. e. Work with business unit heads to strengthen the EO Products' market position by improving the performance of a single line of business unit.

e. Work with business unit heads to strengthen the EO Products' market position by improving the performance of a single line of business unit.

The strategic management process is shaped by a. a company's customer value proposition and profit formula. b. management's strategic vision, strategic and financial objectives, and strategy. c. actions to strengthen competitive capabilities and correct weaknesses, actions to strengthen market standing and competitiveness by acquiring or merging with other companies, and actions to enter new geographic or product markets. d. the decisions made by the compensation and audit committees of the board of directors. e. external factors such as the industry's economic and competitive conditions and internal factors such as the company's collection of resources and capabilities.

e. external factors such as the industry's economic and competitive conditions and internal factors such as the company's collection of resources and capabilities.

A company needs performance targets or objectives a. to prevent lower-level organizational units from establishing their own objectives. b. because they provide parameters for the company's strategy map. c. to help guide managers in deciding what strategic path to take in the event that a strategic inflection point is encountered. d. to unify the company's strategic vision and business model. e. for its operations as a whole and for each of its separate businesses, product lines, functional departments, and individual work units.

e. for its operations as a whole and for each of its separate businesses, product lines, functional departments, and individual work units.

You have been asked to evaluate Kampus Kombucha's mission statement, "To heal and refresh everyone we touch." You would most likely observe that Kampus Kombucha's mission statement a. portrays this company's aspirations for the future. b. specifically informs customers and employees "who we are, what we do, and why we are here." c. describes more of an objective and a result of what this company does instead of its purpose. d. specifies the buyer needs that it seeks to satisfy and the customer groups or markets it serves. e. is vague, fairly uninformative, and blurs the essence of this company's business activities.

e. is vague, fairly uninformative, and blurs the essence of this company's business activities.

St. Jude's Children's Research Hospital and Tom's Shoes' core values typically do not include such things as a. giving back to the community and doing the right thing. b. social responsibility and community citizenship. c. fair treatment, integrity, and ethical behavior. d. improving people's lives. e. minimizing innovation, rewarding individuality, and setting financial performance targets.

e. minimizing innovation, rewarding individuality, and setting financial performance targets.

Siemens AG, Hilton Hotels, Wells Fargo Bank, Ann Taylor Stores, and Ford Motor Company are examples of companies that have adopted the balanced scorecard in order to a. put equal emphasis on the achievement of financial objectives, strategic objectives, and social responsibility objectives. b. prevent the pursuit of strategic objectives from dominating the pursuit of financial objectives. c. preclude the drive for achieving financial objectives from weakening the attention paid to social responsibility, community citizenship, and other worthy goals. d. balance the pursuit of good bottom-line profit against the pursuit of nonprofit objectives (although achieving profitability targets is nearly always given greater emphasis). e. set both financial and strategic objectives and putting balanced emphasis on their achievement.

e. set both financial and strategic objectives and putting balanced emphasis on their achievement.

Business strategy concerns a. selecting a set of financial and strategic objectives for a particular line of business. b. choosing appropriate internal business processes for a specific line of business. c. ensuring consistency in strategic approach among the businesses of a diversified company. d. selecting a business model to use in pursuing business objectives. e. strengthening the company's market position and building competitive advantage.

e. strengthening the company's market position and building competitive advantage.