Chapter 9 final
corrective actions are almost always needed except when
(1) external and internal factors have not significantly changed and (2) the firm is progressing satisfactorily toward achieving stated objectives.
Which of the following is NOT true of boards today? Question content area bottom Part 1 A. Boards are more autonomous than ever. B. Globally, most boards have ended their image as the CEO's rubber-stamping friends. C. Boards are more cognizant of compliance issues. D. Boards are more cognizant of auditing issues. E. Boards are less proactive and more reactive.
Boards are less proactive and more reactive.
Does this textbook advocate a top-down or bottom-up approach to strategic planning? Question content area bottom Part 1 A. It depends on the size of the firm. B. It depends on the workforce. C. Bottom-up D. It depends on the industry. E. Top-down
Bottom-up
Linneman and Chandran report that contingency planning gives users like DuPont, Dow Chemical, Consolidated Foods, and Emerson Electric three major benefits. It enables _____. Question content area bottom Part 1 A. managers to be proactive, more adaptive and more responsive to change B. rapid responses to change, prevents panic in crisis situations and make managers more adaptable C. rapid responses to change, prevents panic in crisis situations and makes managers less adaptable D. slower responses to change, prevents panic in crisis situations, and makes managers more proactive E. managers to be more adaptable, more responsive to change, and creates panic in crisis situations
rapid responses to change, prevents panic in crisis situations and make managers more adaptable
Part of the rationale behind balanced scorecard is the difference between financial and non-financial measures: financial measures better _____, whereas nonfinancial metrics better ______. Question content area bottom Part 1 A. show customer concerns, show production concerns B. report what has happened, predict the future C. help growth, help to sustain D. give nuance, show the big picture E. show long-term value, show short-term value
report what has happened, predict the future
The strategy-evaluation process includes three basic activities. Which activity(s) below is not one of the three? Question content area bottom Part 1 A. Take corrective actions to ensure that performance conforms to plans. B. Examine the underlying bases of a firm's strategy. C. Develop a clear vision and mission. D. Compare expected results with actual results.
Develop a clear vision and mission.
Which of the following is included in Business Week's principles of good governance? Question content area bottom Part 1 A. Do not create attendance requirements. B. Do not allow the CEO to be chairperson of the board. C. Do not prohibit interlocking directorships. D. Do not allow board members to own a large amount of the firm's equity. E. Do not allow the board to meet without top management in attendance.
Do not allow the CEO to be chairperson of the board.
Which of the following should NOT be included as a non-financial measure of a Balanced Scorecard? Question content area bottom Part 1 A. Pollution abatement B. Employee morale C. Community involvement D. EPS E. Customer service
EPS
When evaluating strategies, IFRS stands for what term? Question content area bottom Part 1 A. International financial reporting standards B. International financial ratio standards C. Interim financial ratio standards D. Interim financial reporting standards E. Interactive financial reporting standards
International financial reporting standards
Which statement below is not a guideline for effective strategic planning, according to R. T. Lenz? Question content area bottom Part 1 A. It should contain vague planning jargon. B. Keep the process simple and easily understandable. C. Do not allow technicians to monopolize the planning process. D. To the extent possible, involve managers from all areas of the firm. E. Welcome bad news and encourage devil's advocate thinking
It should contain vague planning jargon.
What is the second of the three strategy-evaluation activities? Question content area bottom Part 1 A. Survey managers and employees for input information. B. Calculate all relevant financial ratios and compare with industry norms. C. Measure organizational performance. D. Establish clear objectives. E. Review the underlying bases of strategy.
Measure organizational performance.
As described in Chapter 9, what is the first strategy-evaluation activity? Question content area bottom Part 1 A. Establish a clear vision and mission statement. B. Measure performance of the firm across all products and regions. C. Review the underlying bases of strategy. D. Establish clear objectives. E. Formulate strategies.
Review the underlying bases of strategy.
Which of the following is not true concerning contingency plans? Question content area bottom Part 1 A. Contingency plans can minimize the impact of potential threats. B. Contingency plans should be as simple as possible. C. Contingency plans are alternative plans that can be put into effect if certain key events do not occur as expected. D. Strategists should try to cover all bases for all possible contingencies. E. Only high-priority areas require the insurance of contingency plans.
Strategists should try to cover all bases for all possible contingencies.
Which statement below is FALSE? Question content area bottom Part 1 A. Small companies do not need extnsive evaluative reporting systems. B. Managers in small companies often communicate daily with each other and their employees C. Strategy evaluations should be simple but cumbersome and restrictive. D. No department should fail to cooperate with another in evaluating strategies. E. Complex strategy-evaluation systems often confuse people and accomplish little
Strategy evaluations should be simple but cumbersome and restrictive.
Which statement below is FALSE? Question content area bottom Part 1 A. Successful companies see information where others see only data. B. Successful companies maintain loose financial controls. C. Successful companies have a voracious hunger for facts. D. The people at successful companies don't regard controls as an imposition of autocracy but as the benign checks and balances that allow them to be creative and free. E. Successful companies treat facts as friends and controls as liberating.
Successful companies maintain loose financial controls.
The strategy evaluation process includes three basic activities. Which of the following is one of them? Question content area bottom Part 1 A. Take corrective actions to ensure that performance conforms to plans. B. Choose which products to sell. C. Plan how productions will be produced. D. Motivate compliance with work rules. E. Set performance goals for all employees.
Take corrective actions to ensure that performance conforms to plans.
_____ is the third strategy-evaluation activity. Question content area bottom Part 1 A. Take corrective actions. B. Revise the firm's vision, mission, and objectives. C. Reward both employees and managers appropriately. D. Re-formulate strategies. E. Develop projected financial statements.
Take corrective actions.
Which strategy-evaluation activity requires making changes to competitively reposition a firm for the future? Question content area bottom Part 1 A. Comparing expected results with actual results B. Taking corrective actions C. Examining the underlying bases of a firm's strategy D. Revising the EFE matrix E. Continuously monitoring existing strategy
Taking corrective actions
Contingency plans should be established if _____. Question content area bottom Part 1 A. demand for a new product cannot be determined B. sales objectives are reached C. a major competitor liquidates D. demand for a product does as expected E. a new technological advancement makes a new product obsolete sooner than expected
a new technological advancement makes a new product obsolete sooner than expected
Developed in the early 1990s by Harvard Business School professors Robert Kaplan and David Norton and refined continually since then, the ______ is a strategy-evaluation and control technique. Question content area bottom Part 1 A. sure B. benchmarking approach C. value chain concept D. balanced scorecard E. financial ratio analysis method
balanced scorecard
The basic premise of ______ is that firms should establish objectives and evaluate strategies on criteria other than using only financial measures. Question content area bottom Part 1 A. benchmarking B. balanced scorecard C. reengineering D. value chain analysis E. cost-benefit analysis
balanced scorecard
The act of oversight and direction provided by a Board of Directors is referred to as ______. Question content area bottom Part 1 A. steering B. governing C. directing D. government E. governance
governance
Strategy-evaluation activities should be performed ______. Question content area bottom Part 1 A. at the end of every year B. at the end of specified periods of time C. on a continuing basis D. immediately after problems occur E. each month
on a continuing basis
What is considered the cornerstone of effective strategy evaluation? Question content area bottom Part 1 A. Adequate and timely feedback B. Interviews C. Planning D. Employee surveys E. Inventory control
Adequate and timely feedback
Which responsibility are board members addressing when they stimulate corporate growth so that the firm will survive, guard against equity dilution, and declare proper dividends? Question content area bottom Part 1 A. Control and oversight over management B. Adherence to legal prescriptions C. Management of the overall strategy D. Advancement of stockholders' rights E. Consideration of all stakeholders' interests
Advancement of stockholders' rights
What are the basic activities of the strategy-evaluation process? Question content area bottom Part 1 A. Examine the underlying bases of a firm's strategy, compare expected results with actual results, and take corrective actions to ensure the performance conforms to plans. B. Determine if profitability has increased and, if not, develop new expected results and take corrective actions. C. Examine the firm's existing strategy, compare it to competitors' strategies, and take corrective actions. D. Determine if assets have increased and, if not, take the appropriate corrective actions. E. Examine a firm's financial position, compare this to industry standards, and take corrective actions.
Examine the underlying bases of a firm's strategy, compare expected results with actual results, and take corrective actions to ensure the performance conforms to plans.
Which statement below is FALSE regarding the strategic-planning process? Question content area bottom Part 1 A. Executives should keep assignments, team memberships, and meeting formats constant for a year. B. Pursuing too many strategies at the same time is a critical mistake. C. Strategic planning should be a learning process for all managers and employees. D. Strategic planning should be a people process more than a paper process. E. Strategic decisions require tradeoffs such as long-range versus short-range considerations and maximizing profits versus increasing shareholders' wealth.
Executives should keep assignments, team memberships, and meeting formats constant for a year.
Which publication annually publishes the "World's Most Admired Companies," which provides helpful strategy-evaluation information? Question content area bottom Part 1 A. Wall Street Journal B. Fortune C. Investor's Business Daily D. Forbes E. Business Week
Fortune
When evaluating strategies, GAAP stands for what term? Question content area bottom Part 1 A. Generally accepted accounting principles B. Generally accepted actuary procedures C. Generally accepted auditing principles D. Generally accepted accounting procedures E. Generally accepted auditing standards
Generally accepted accounting principles
When evaluating strategies, GAAS stands for what term? Question content area bottom Part 1 A. Generally accepted administrative scales B. Generally accepted auditing standards C. Generally accepted administrative standards D. Generally accepted actuary standards E. Generally accepted actuary scales
Generally accepted auditing standards
______ is the characteristic of ensuring that long-term strategic objectives and plans are established and that the proper management structure is in place to achieve those objectives, while at the same time making sure that the structure functions to maintain the corporation's integrity, reputation, and responsibility to its various constituencies. Question content area bottom Part 1 A. Reengineering B. Benchmarking C. Goverance D. Value chain analysis E. Sustainability
Goverance
Which statement below is FALSE? Question content area bottom Part 1 A. Too much pressure from top managers may result in lower managers contriving numbers they think will be satisfactory. B. The more managers attempt to evaluate the behavior of others, the less control they have. C. Too much emphasis on evaluating strategies may be expensive and counterproductive. D. In many organizations, strategy evaluation is simply an appraisal of how well an organization has performed.
In many organizations, strategy evaluation is simply an appraisal of how well an organization has performed.
Which statement below is FALSE? Question content area bottom Part 1 A. The Mintzberg philosophy insists on informality, whereas strategy scientists (and the authors of this text) insist on more formality. B. Proponents of the artistic view often consider strategic-planning exercises to be time poorly spent. C. Mintzberg refers to strategic planning as an "inevitable" process, whereas strategy scientists use the term "absolute" process. D. This textbook rejects the Mintzberg philosophy. E. Mintzberg's notion of "crafting" strategies embodies the artistic model, which suggests that strategic decision making be based primarily on holistic thinking, intuition, and creativity.
Mintzberg refers to strategic planning as an "inevitable" process, whereas strategy scientists use the term "absolute" process.
Which of the following is a current trend in the U.S. regarding Boards of Directors? Question content area bottom Part 1 A. Less board member accountability with larger boards B. Eliminating the Board of Directors C. Less board member accountability with smaller boards D. Much greater board member accountability with larger boards E. Much greater board member accountability with smaller boards
Much greater board member accountability with smaller boards
Which statement below is FALSE? Question content area bottom Part 1 A. Strategic management must not become ritualistic, stilted, orchestrated, or too formal, predictable, and rigid. B. Words supported by numbers, rather than numbers supported by words, should be the medium used to explain strategic issues and organizational responses. Your answer is not correct. C. Numbers supported by words, rather than words supported by numbers, should be the medium used to explain strategic issues and organizational responses. D. Strategic management should 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. E. R.T. Lenz says a guideline to follow in strategic planning is to welcome bad news and encourage devil's advocate thinking.
Numbers supported by words, rather than words supported by numbers, should be the medium used to explain strategic issues and organizational responses.
Advantages of keeping the strategic-planning process secret include which statement below? Question content area bottom Part 1 A. Openness is always better than secrecy. B. Participants in a visible strategy process become less attractive to rival firms that may lure them away. C. Secrecy increases criticism, second-guessing, and hindsight. D. Secrecy enables rival firms to imitate the firm's strategies and undermine the firm. E. Participants in a visible strategy process become more attractive to rival firms, that may lure them away.
Participants in a visible strategy process become more attractive to rival firms, that may lure them away.
Four reasons to be completely open with the strategy process and resultant decisions are given in the chapter; these reasons include all of the following except which one? Question content area bottom Part 1 A. Participation and openness lead to conciseness and accuracy. B. Visibility promotes democracy, whereas secrecy promotes autocracy. Domestic firms and most foreign firms prefer democracy over autocracy as a management style. C. Investors, creditors, and other stakeholders have greater basis for supporting a firm when they know what the firm is doing and where the firm is going. D. Managers, employees, and other stakeholders can readily contribute to the process. They often have excellent ideas. Secrecy would forgo many excellent ideas. E. Participation and openness enhance understanding, commitment, and communication within the firm.
Participation and openness lead to conciseness and accuracy.
Competitive advantages are generally the result of superiority in one (or more) of three areas. Which of the following is one of them? Question content area bottom Part 1 A. Position B. Short-run focus C. Transparency D. Marketing E. Feasibility
Position
Which statement below is FALSE? Question content area bottom Part 1 A. The Chinese warrior Sun Tzu and military leaders today strive to keep strategies secret, because war is based on deception; but for business organizations, secrecy may not be best. B. Strategists must decide what is best for their firms. C. Keeping strategies secret from employees and stakeholders at large could severely inhibit employee and stakeholder communication, understanding, and commitment; likewise, maintaining secrecy could mean forfeiting valuable input that employees and stakeholders could offer regarding the formulation or implementation of the strategy.. D. There are no good reasons to keep the strategy process and strategies themselves visible and open rather than hidden and secret. E. There are good reasons to keep strategies hidden from all but top-level executives.
There are no good reasons to keep the strategy process and strategies themselves visible and open rather than hidden and secret.
Which statement below is FALSE? Question content area bottom Part 1 A. Firms need to systematically assess their external and internal environments, conduct research, carefully evaluate the pros and cons of various alternatives, perform analyses, and then decide on a particular course of action. B. The Mintzberg strategic-planning approach insists on informality, whereas strategy scientists (and this text) insist on more formality. C. This textbook is framed primarily on the fact that strategic planning is an art rather than a science. D. This textbook is consistent with most of the strategy literature in advocating that strategic management be viewed more as a science than an art. E. Mintzberg's notion of "crafting" strategies embodies the artistic model, which suggests that strategic decision making be based primarily on holistic thinking, intuition, creativity, and imagination.
This textbook is framed primarily on the fact that strategic planning is an art rather than a science.
When are positional advantages self-sustaining? Question content area bottom Part 1 A. When several competitors are evenly matched B. When market entry costs are low C. When environments are dynamic D. When key external and internal factors remain stable E. When innovation is crucial to success
When key external and internal factors remain stable
What are the five issues, beyond financial, a firm uses to evaluate its strategies when developing a balanced scorecard? Question content area bottom Part 1 A. Stakeholders, Managers/Employees, Operations/ Processes, Community/Social Responsibility, and Business Ethics/Natural Environment B. Customers, Marketing, Operations/ Processes, Community/Social Responsibility, and Business Ethics/Natural Environment C. Customers, Managers/Employees, Operations/ Processes, Community/Social Responsibility, and Business Ethics/Natural Environment D. Customers, Managers, Employees, Community/Social Responsibility, and Culture E. Customers, Managers/Employees, Operations/ Processes, Social Responsibility, and Competitive Position
Customers, Managers/Employees, Operations/ Processes, Community/Social Responsibility, and Business Ethics/Natural Environment