Test Questions
The demands of strategic management are simple enough to be handled alone by the chief executive officer.
False
The triple bottom line framework ignores traditional organization profits as a measure of organizational performance.
False
There is only one single established method of conceptualizing the concept of strategy.
False
Trends and events of the external environment seldom affect the overall state of an organization.
False
Viewing strategy as position involves only the actions of a single firm.
False
Well-regarded celebrity CEOs always have totally untarnished reputations.
False
A CEO celebrity can serve as an intangible asset for the CEO's firm.
True
A well-formulated vision that is embraced by employees can give an organization an edge over its rivals.
True
An organization is more effective to the extent that its vision and its mission target employees' effort in the same direction.
True
An organization that wants to encourage autonomy should foster a work environment with high levels of employee satisfaction and low levels of turnover.
True
Celebrity CEOs tend to receive higher compensation and job perks than their colleagues.
True
Deciding what a firm is not going to do is just as important to strategy as deciding what it is going to do.
True
Developing a viable business model requires that a firm sell goods or services for more than it costs the firm to create and distribute those goods.
True
Excess of aggressiveness can undermine an organization's success.
True
Executives who make assumptions about what an adversary can and cannot do put their organizations' performance in jeopardy.
True
Firms must evaluate their own resources to understand how they might react to changes in the environment.
True
For a small firm, licensing technology to larger firms provides a second income stream and decreases the chances of imitation.
True
Intended strategies are usually described in detail within an organization's strategic plan.
True
Most entrepreneurs take action only after using planning and forecasting to reduce uncertainty.
True
One important aspect of a business model is providing customers with a good or service more cheaply than they can create it themselves.
True
Organizations need support from their key stakeholders, such as employees, owners, suppliers, and customers, in order to prosper.
True
Realized strategies are a product of a firm's intended strategy, the firm's deliberate strategy, and its emergent strategy.
True
Scoundrels are those CEOs who are closely monitored and scrutinized by the media.
True
Setting easy to reach organizational goals encourages employees to work just hard enough to reach them.
True
Some large organizations promote autonomy by empowering a division to make its own decisions, set its own objectives, and manage its own budgets.
True
Sometimes good strategies simply cannot overcome a stronger adversary.
True
Strategic management is a process that involves building a careful understanding of how changes in the world might affect a particular firm.
True
Strategic ploys can be especially beneficial when facing much stronger opponents.
True
Strategy formulation involves developing specific strategies and actions.
True
Strategy implementation entails crafting an effective organizational structure and corporate culture.
True
Strategy is a complex concept that involves many different processes and activities within an organization.
True
The balanced scorecard framework is designed to provide a "balance" between financial measures and other measures that are important for understanding organizational activities that lead to sustained, long-term performance.
True
The book, "The Principles of Scientific Management," was a response to Taylor's observation that most tasks within organizations were organized in a haphazard way.
True
The common element in all entrepreneurs is that they do something new and can make something out of opportunities that others cannot.
True
The history of strategic management can be traced back several thousand years.
True
The idea of "stratego," from which the word strategy is derived, refers to the idea of defeating an enemy by effectively using resources.
True
The most effective goals are those that are specific, measurable, aggressive, realistic, and time-bound.
True
The study of strategic management involves knowing how and when to apply creative thinking.
True
The triple bottom line framework highlights areas such as social responsibility.
True
Thinking and behaving entrepreneurially can help a person's career
True
Those organizations that are successful in their innovation efforts tend to enjoy stronger performance than those that do not.
True
Unexpected twists and turns in the external as well as the internal environment place limits on the value of strategic planning.
True
Strategy as _____ refers to how executives interpret the competitive landscape around them. a. pattern b. perspective c. ploy d. plan e. position
b. perspective
A company that manufactures soaps could not sell its products despite spending a good amount on advertisements. Therefore, management decided to use the concept of direct marketing. They thought of appointing a large number of salespersons who would do door-to-door selling of the product. This is an example of a strategic: a. ploy. b. plan. c. position. d. pattern. e. perspective.
b. plan
_____ examines how actions and events involving top executives, firms, and industries influence a firm's success or failure. a. Developmental counseling b. Disparate impact c. Strategic management d. Trend analysis e. Attitude survey
c. Strategic management
A department store consistently keeps low prices, and this strategy helps the store to attract many customers. This is an example of a strategic: a. ploy. b. plan. c. position. d. pattern. e. perspective.
d. pattern
A strategic _____ is a carefully crafted set of steps that a firm intends to follow in order to be successful. a. pattern b. perspective c. ploy d. plan e. position
d. plan
Pizzas at Home, a pizza shop, plans to deliver pizzas to households. Deliveries would be made without any extra charge. It put this plan in place.its plans to good effect. Soon, Pizzas at Home realizes it must start charging a nominal fee for delivery. Many other pizzerias start following the same strategy. Pizzas at Home then starts offering free pizzas if they are not delivered within 30 minutes of the order placement. The strategy followed by Pizzas at Home is an example of a(n) _____ strategy. a. marked b. pre-termed c. established d. realized e. arranged
d. realized
Marty's, a clothing company, has a number of outlets which are owned and managed by private individuals. These outlets are allowed to use the brand name and products of Marty's after paying a fee to the company. They also pay a part of their revenues to the clothing line. The part of the revenues paid by the outlets to Marty's is referred to as: a. acceptance fee. b. acknowledgement fee. c. franchise fee. d. royalty fee. e. establishment fee.
d. royalty fee
A viable business model requires that a firm: a. sell goods or services at the same cost the firm needs to create and distribute those goods. b. sell goods or services without paying any attention to the costs that the firm has to bear in order to create and distribute those goods. c. give away goods or services for free in order to attract more and more customers. d. sell goods or services for more than it costs the firm to create and distribute those goods. e. sell goods or services for less than it costs the firm to create and distribute those goods.
d. sells goods or services for more than it costs the firm to create and distribute those goods
Which of the following statements holds true for the "capstone" course recommended by The Ford Foundation? a. It stressed on how strategy and organizational structure need to be consistent with each other in order to ensure strong firm performance. b. It offered concepts such as Five Forces Analysis and Generic Strategies that continue to strongly influence how executives choose strategies. c. It stressed on how organizations could become more efficient through identifying the "one best way" of performing important tasks. d. It argued that many of the advantages that firms in developed countries like the United States, Japan, and Great Britain take for granted are disappearing. e. It emphasized student's critical thinking skills in general and the notion that multiple ways of addressing a problem could be equally successful in particular.
e. It emphasized student's critical thinking skills in general and the notion that multiple ways of addressing a problem could be equally successful in particular.
Roomz, a mid-range hotel, used to provide only food and accommodation facilities. It soon realized that most of its customers are foreign tourists who constantly ask for directions and advice on places to visit. The hotel then decided to start a travel desk which would help tourists select and visit places of historical and cultural significance. This is an example of a(n) _____ strategy. a. marked b. pre-termed c. intended d. realized e. emergent
e. emergent
A(n) _____ fee refers to the upfront fee paid by an organization which gets the right to use another organization's brand name, products, and processes. a. royalty b. establishment c. acceptance d. acknowledgement e. franchise
e. franchise
A _____ is an organization which grants the right to use its brand name, products, and processes to other organizations. a. legatee b. franchisee c. bailee d. bailer e. franchisor
e. franchisor
Dormer is the only fine dining restaurant in a small town. The opening of a new restaurant is viewed as a threat by some of the employees at Dormer. Others see it as an opportunity for Dormer to strengthen itself by looking out for its weaknesses and ironing them out. This is an example of strategy as: a. ploy. b. plan. c. position. d. pattern. e. perspective.
e. perspective
Strategy as _____ refers to a firm's place in the industry relative to its competitors. a. pattern b. perspective c. ploy d. plan e. position
e. position
A(n) _____ strategy is the strategy that an organization actually follows. a. established b. marked c. pre-termed d. arranged e. realized
e. realized
Alfred Chandler's book focused on: a. the SWOT analysis. b. the principles of scientific management. c. the Five Forces Analysis. d. international competition and the flat world. e. strategy and structure.
e. strategy and structure
Strategic management is neither an art nor a science.
False
Internal business process measures of performance relate to customer attraction, satisfaction, and retention.
False
Learning and growth measures of performance relate to organizational efficiency.
False
Most strategic ploys are illegal.
False
Strategic management involves a single conceptualization of the concept of strategy drawn from recent history.
False
A firm is bound to fail if it maintains flexibility in formulating strategies.
False
A mission ignores the key elements of the organization's past and present and looks mostly towards the future.
False
A proactive organization is one that waits for an opportunity to come its way rather than seek one.
False
A vision captures the key elements of the organization's past and present.
False
All firms benefit equally in substantial performance improvements created by planning.
False
Competitive aggressiveness is the tendency to avoid competitors rather than directly challenge them.
False
Customer measures of performance are commonly articulated and emphasized within an organization's annual report to shareholders.
False
Entrepreneurial thinking and doing is limited to those who begin in their garage with a new idea, financed by family members or personal savings.
False
Hidden gems are CEOs who are well-known, but vilified.
False
Innovations always require brand new skills thus making existing skills obsolete.
False
Which of the following statements holds true for the book "Strategy and Structure: Chapters in the History of the Industrial Enterprise"? a. It stressed on how strategy and organizational structure need to be consistent with each other in order to ensure strong firm performance. b. It offered concepts such as Five Forces Analysis and Generic Strategies that continue to strongly influence how executives choose strategies. c. It stressed on how organizations could become more efficient through identifying the "one best way" of performing important tasks. d. It argued that many of the advantages that firms in developed countries like the United States, Japan, and Great Britain take for granted are disappearing. e. It emphasized student's critical thinking skills in general and the notion that multiple ways of addressing a problem could be equally successful in particular.
a. It stressed on how strategy and organizational structure need to be consistent with each other in order to ensure strong firm performance.
A(n) _____ strategy is an unplanned strategy that arises in response to unexpected opportunities and challenges. a. emergent b. marked c. pre-termed d. intended e. realized
a. emergent
Marty's, a clothing company, has a number of outlets which are owned and managed by private individuals. These outlets are allowed to use the brand name and products of Marty's after paying a fee to the company. They also pay a part of their revenues to Marty's. Each of these outlets is a: a. franchisee. b. bailee. c. franchisor. d. bailer. e. legatee.
a. franchisee
A clothing line company has a number of outlets which are owned and managed by private individuals. These outlets are allowed to use the brand name and products of the clothing line after paying a fee to the clothing line company. They also pay a part of their revenue to the clothing line. This is an example of: a. franchising. b. comparative scaling. c. differentiation. d. positioning. e. brand essence.
a. franchising
Strategy as _____ focuses on the extent to which a firm's actions over time are consistent. a. pattern b. perspective c. ploy d. plan e. position
a. pattern
A coffee chain was losing its customers to its competitors, and wanted to increase its sales. Therefore it started offering complimentary pastries with every cup of coffee, to outwit its competitors. Soon, the company registered an increase in its sales. This is an example of a strategic: a. ploy. b. plan. c. position. d. pattern. e. perspective.
a. ploy
A(n) _____ fee refers to the percentage of franchisees' revenues paid to an organization which has granted the right to use its brand name, products, and processes. a. royalty b. establishment c. acceptance d. acknowledgement e. franchise
a. royalty
Economies of _____ refer to a cost advantage that is created when a firm can produce a good or service at a lower per unit price due to producing the good or service in large quantities. a. scale b. demand c. scope d. brand e. integration
a. scale
Myshirts.com, a company that manufactures shirts, buys large batches of dressing material from a supplier. The supplier charges them less than what Myshirts.com would have had to pay if it had purchased the material from different sources. As a consequence, the cost of manufacturing each shirt at Myshirts.com is lower than at other manufacturers. This is an example of economies of: a. scale. b. demand. c. scope. d. brand. e. integration.
a. scale
_____ published a book titled The Principles of Scientific Management. a. Michael Porter b. Frederick W. Taylor c. Niccolò Machiavelli d. Thomas Friedman e. Alfred Chandler
b. Frederick W. Taylor
Which of the following statements holds true for the book, "Competitive Strategy: Techniques for Analyzing Industries and Competitors"? a. It stressed on how strategy and organizational structure need to be consistent with each other in order to ensure strong firm performance. b. It offered concepts such as Five Forces Analysis and Generic Strategies that continue to strongly influence how executives choose strategies. c. It stressed on how organizations could become more efficient through identifying the "one best way" of performing important tasks. d. It argued that many of the advantages that firms in developed countries like the United States, Japan, and Great Britain take for granted are disappearing. e. It emphasized student's critical thinking skills in general and the notion that multiple ways of addressing a problem could be equally successful in particular.
b. It offered concepts such as Five Forces Analysis and Generic Strategies that continue to strongly influence how executives choose strategies.
A _____ strategy is the parts of the intended strategy that an organization continues to pursue over time. a. marked b. deliberate c. make over d. non-realized e. pre-termed
b. deliberate
An organization which gets the right to use another organization's brand name, products, and processes is referred to as a _____. a. legatee b. franchisee c. bailee d. bailer e. franchisor
b. franchisee
Quattro is a pizza shop that delivers pizzas without any extra charge. It also refunded the entire amount of the order when the pizza was not delivered within 30 minutes from the order placement. After two years it stopped this policy, but it still delivers pizzas without any extra charge. The fact that it stopped the policy of refunds in case of a delay of more than 30 minutes is an example of a _____ strategy. a. make over b. non-realized c. marked d. deliberate e. pre-termed
b. non-realized
Marty's, a clothing company, has a number of outlets that are owned and managed by private individuals. These outlets are allowed to use the brand name and products of Marty's after paying a fee to the company. They also pay a part of their revenues to Marty's. The upfront payment these outlets make to Marty's for using the Marty's brand name is referred to as a(n): a. acceptance fee. b. acknowledgement fee. c. franchise fee. d. royalty fee. e. establishment fee.
c. franchise fee
Marty's, a clothing company, has a number of outlets that are owned and managed by private individuals. These outlets are allowed to use the brand name and products of the clothing line after paying a fee to Marty's. They also pay a part of their revenues to Marty's. Marty's is an example of a: a. franchisee. b. bailee. c. franchisor. d. bailer. e. legatee.
c. franchisor
A pizza shop plans to deliver pizzas to households. The delivery would be made without any extra charge. It hopes to execute this strategy in the suburbs. This is an example of a(n) _____ strategy. a. marked b. pre-termed c. intended d. realized e. emergent
c. intended
A strategic _____ is a specific move designed to outwit or trick competitors. a. pattern b. perspective c. ploy d. plan e. position
c. ploy
A company that manufactures cars aims to sell them to customers in the premium market segment. This is an example of strategy as: a. ploy. b. plan. c. position. d. pattern. e. perspective.
c. position
The book "The Principles of Scientific Management" _____. a. stressed on how strategy and organizational structure need to be consistent with each other in order to ensure strong firm performance b. offered concepts such as Five Forces Analysis and Generic Strategies that continue to strongly influence how executives choose strategies c. stressed on how organizations could become more efficient through identifying the "one best way" of performing important tasks d. argued that many of the advantages that firms in developed countries like the United States, Japan, and Great Britain take for granted are disappearing e. emphasized student's critical thinking skills in general and the notion that multiple ways of addressing a problem could be equally successful in particular
c. stressed on how organizations could become more efficient through identifying the "one best way" of performing important tasks
Which of the following statements holds true for the book "The World is Flat: A Brief History of the Twenty-First Century"? a. It stressed on how strategy and organizational structure need to be consistent with each other in order to ensure strong firm performance. b. It offered concepts such as Five Forces Analysis and Generic Strategies that continue to strongly influence how executives choose strategies. c. It stressed on how organizations could become more efficient through identifying the "one best way" of performing important tasks. d. It argued that many of the advantages that firms in developed countries like the United States, Japan, and Great Britain take for granted are disappearing. e. It emphasized student's critical thinking skills in general and the notion that multiple ways of addressing a problem could be equally successful in particular.
d. It argued that many of the advantages that firms in developed countries like the United States, Japan, and Great Britain take for granted are disappearing.
Which two pivotal events that took place in 1980 led to the establishment of strategic management as a field of study? a. The publication of the books, The World is Flat: A Brief History of the Twenty-First Century and Strategy and Structure: Chapters in the History of the Industrial Enterprise b. The creation of the New England Journal and the publication of The World is Flat: A Brief History of the Twenty-First Century c. The publication of The Principles of Scientific Management and the "capstone" course recommended The Ford Foundation d. The creation of the Strategic Management Journal and the publication of Competitive Strategy: Techniques for Analyzing Industries and Competitors e. The publication of Strategy and Structure: Chapters in the History of the Industrial Enterprise and the release of The Ford Foundation report recommending the "capstone" course
d. The creation of the Strategic Management Journal and the publication of Competitive Strategy: Techniques for Analyzing Industries and Competitors
Who wrote the book, "The World is Flat: A Brief History of the Twenty-First Century"? a. Michael Porter b. Frederick W. Taylor c. Niccolò Machiavelli d. Thomas Friedman e. Alfred Chandler
d. Thomas Friedman
Quattro is a pizza shop that delivers pizzas without any extra charge. It also refunded the entire amount of the order when the pizza was not delivered within 30 minutes from the order placement. After two years it stopped this policy, but it still delivers pizzas without any extra charge. The fact that it continues to deliver pizzas to households without any extra charge is an example of a _____ strategy. a. make over b. non-realized c. marked d. deliberate e. pre-termed
d. deliberate
_____ involves an organization granting the right to use its brand name, products, and processes to other organizations in exchange for an upfront payment and a percentage of revenues generated by the other organizations. a. Differentiation b. Positioning c. Brand essence d. Franchising e. Comparative scaling
d. franchising
A(n) _____ strategy is the strategy that an organization hopes to execute. a. emergent b. marked c. pre-termed d. intended e. realized
d. intended
A _____ strategy refers to the parts of the intended strategy that are abandoned. a. marked b. deliberate c. make over d. non-realized e. pre-termed
d. non-realized