Strategic Management Midterm 1

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Three stages of the strategic management process

strategy formulation strategy implementation strategy evaluation

Strategic Managment Model

vision and mission statement external and internal audit establish long-term objectives select strategies implement strategies measure and evaluate

Pitfalls of strategic management examples

wanted control satisfy regulatory requirements failing to involve key employees

Examples of external threats or opportunities

Economic, social, cultural, demographic, environmental, political, legal, governmental, technological, and competitive beyond company's control

A vision statement commonly answers the question, "What is our business?" whereas a mission statement is more likely to answer the question "What do we want to become?"

False

A vision statement describes an organization's values and priorities.

False

A vision statement identifies the scope of a firm's operations in product and market terms

False

According to Albert Einstein, "Knowledge is far more important than intuition."

False

According to Peter Drucker "Imagination is more important than knowledge, because knowledge is limited, whereas imagination embraces the entire world."

False

Because the position of Chief Executive Officer (CEO) has assumed much responsibility for strategic management in the last five years, the number of firms with the position of Chief Strategy Officer (CSO) has diminished drastically during this period

False

By the nature of what they do, strategists tend to have similar attitudes, values, ethics and concerns for social responsibility.

False

Despite its great popularity in the 1980s, strategic planning by corporate America is now a valuable though rare activity.

False

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

False

Middle managers are generally the most visible and critical of all strategic managers

False

Military success is usually the happy result of accidental strategies, but business success is the product of continuous attention to changing conditions and insightful adaptations to those conditions.

False

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

False

Once a firm acquires a competitive advantage, it is usually able to sustain it indefinitely

False

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

False

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

False

The best approach for strategists is to carefully develop strategic plans themselves and then present them to operating managers to execute.

False

The most effective strategic management is ritualistic, predictable, and formal.

False

U.S. firms are not being aggressively challenged in the computer industry.

False

Management by intuition can be defined as operating from the "I've-already-made-up-my-mind-don't-bother-me-with-the-facts mode." False

False. It is management by ignorance. (Drucker)

Strategic management

The art and science of formulating, implementing, and evaluating functional decisions that enable an organization to achieve its objectives

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

True

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

True

Analytical and intuitive thinking complement each other.

True

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

True

Commitment and understanding may be the most important benefits of strategic management.

True

Firms can be more proactive with strategic management

True

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

True

Firms, like organisms, must be "adept at adapting" or they will not survive.

True

In most large organizations that engage in strategic management, the formulation, implementation, and evaluation of strategy activities occur at three hierarchical levels: corporate; divisional or strategic business unit; and functional

True

Low-performing firms typically underestimate their competitor's strengths and overestimate their own strengths

True

Objectives should be measurable, challenging, reasonable, consistent, and clear.

True

One of the fundamental strategy evaluation activities is reviewing the external and internal factors on which strategies are based.

True

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

True

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.

True

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

True

Substantial research indicates that a healthier workforce can more effectively and efficiently implement strategies.

True

The lack of monetary rewards is one cause of managers not engaging in strategic planning.

True

The strengths and weaknesses of an organization are determined relative to the strengths and weaknesses of its competitors.

True

The terms strategic management and strategic planning are used synonymously in this text.

True

To be effective, strategic-management must be a process that familiarizes managers and employees with the key strategic issues facing an organization and the feasible alternatives for resolving those issues.

True

Competitive advantage

any activity a firm does especially well compared to activities done by rival firms

Sustained Competitive Advantage

continually adapting to changes in external trends and events and internal capabilities, competencies, and resources; effectively formulating, implementing, and evaluation strategies that capitalize on those factors

Hierarchical levels of management

corporate, divisional, strategic business unit, and function

strategy formulation

developing a vision and mission statement, identifying external opportunities and threats, determining internal strengths and weaknesses, established long-term objectives, generating alternative strategies, and choosing particular strategies of pursue

Mission Statement

enduring statement of purpose that distinguish one business from other similar firms "What is our business?"

strategy implementation

establish annual objectics, devise policies, motivate employees, and allocate resources, so that strategies can be executed

By occasionally monitoring external events, companies should be able to identify when change is required.

false

Vision Statement

first step in strategic planning "What do we want to become?"

policies

means by which annual objectives will be achieved

Benefits of Strategic Managment

more proaction formulate better strategies emplowerment financila benefits nonfinancial benefits (more aware)

strategy evaluation

obtaining what strategies are not working; measuring performance; taking corrective actions


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