Chapter 2: Managing the Strategy Process
Free Winds, Inc. is a company that manufactures a variety of generators that run on wind power. The company wants to ensure that wind technology replaces all forms of exhaustible energy sources in the near future. Which of the following statements will make an accurate vision for Free Winds?
All nations around the globe should have access to a sustainable energy source
Which of the following best describes a Level 5 manager in the Level-5 leadership pyramid?
Connie is the CEO of Green Machines Inc.; he has helped his company in gaining and sustaining a competitive advantage through ethical decision making.
Which of the following statements is true of customer-oriented visions?
Customer-oriented vision statements are not the same as listening to your customer.
Why is it better for firms to keep their vision statements customer-oriented rather than product-oriented?
Customer-oriented visions tend to be more flexible when adapting to changing environments.
During an assessment of employees and leaders in a company, Ethan Browne was categorized as a Level 5 manager in the Level-5 leadership pyramid. Which of the following can be inferred from this information?
Ethan is a top management executive in the company
Pioneer Pharma Inc. and GH Medicines Corp. are two competing firms in the pharmaceutical industry. While Pioneer Pharma Inc.'s vision is "to be a preeminent drug manufacturer in the industry," GH Medicines Corp.'s vision is "to make good health a reality for everyone around the world." Which of the following is an implication of these different vision?
GH Medicines will be more flexible than Pioneer Pharma when adapting to changing environments.
Which of the following is an important characteristic of a leader?
Goal-oriented; Proactive
Jorge is part of a sales team. He effectively coordinates his tasks with others in the team and willingly contributes to their efforts in achieving the team's objectives. Thus, Jorge is in _____ of the Level-5 leadership pyramid.
Level 2
To be effective, firms need to
back up their visions with strategic commitments that are costly and difficult to reverse.
Organizational values help individuals make choices that are
both ethical and effective in advancing a company's goals
White Leo Autos manufactures and markets four different cars: Leo Sport, Leo Prestige, Leo Spark, and Leo Ease. These four product variants are operated as individual business units. While the product leaders of Leo Sport, Leo Prestige, and Leo Spark have adopted a differentiation strategy to attract the niche market: the product leader of Leo Ease follows a cost-leadership strategy to suit the mass market. This decision of the product leader of Leo Ease can be ideally categorized as a _____ strategy.
business
The Chief Executive Officer (CEO) of Yahoo, Marissa Mayer, established a mission by building on her vision. Considering this, how did Mayer implement the mission of Yahoo?
by making the user experience of the mobile Internet easy and fun
The pharmaceutical company Merck's new drug Vioxx was a blockbuster, generating revenues of $2.5 billion a year by 2002 and growing fast. When allegations began to appear in the medical community, Merck announced the voluntary withdrawal of Vioxx from the market. In this example, Merck provides an example of what can happen if a company deviates from its
core values
Bauer Inc. is a company that manufactures plastics, fertilizers, tractors, and headphones under a single brand. The top management at Bauer has decided to enter the medical equipment industry based on its assessment of the profit potential in that industry. Which of the following strategies does this best illustrate?
corporate strategy
The CEO of West Products Inc. (WP) is a company that sells a wide range of products. It has decided to enter the markets of emerging nations like China and Brazil. This means that the cars, consumer electronics, and services such as hotels included under the WP banner would be made available in these nations. Which of the following strategies does this scenario best illustrate?
corporate strategy
Which of the following functions do the general managers in strategic business units primarily perform?
design generic business strategies based on guidelines received from corporate headquarters
Organizational value are the _____ that govern the behavior of individuals within a firm or organization.
ethical standards and norms
Vision statements are used to create a better understanding of the organization's overall purpose and direction. Vision statements
evoke powerful and compelling mental images
Fortune Brands states they will "cut corporate overhead costs by $30 million a year." This is an example of a
financial strategic objective
Green Rabbit Products Inc. (GRP) is a large conglomerate. The human resources department of its telecom division has decided to reduce its employee turnover by encouraging internal promotions. Which of the following strategies does this scenario best illustrate?
functional strategy
Unrealized strategy is when parts of a firm's intended strategy is
nonfunctional due to unexpected events
A positive relationship between vision statements and firm performance is more likely to exist when
organizational structures are aligned with the firm's vision statement
According to the Level-5 leadership pyramid, a manager at Level 3 has acquired the ability to
organize resources effectively to accomplish predetermined goals.
Which of the following is a top-down approach to the development of strategy that involves asking "what if" questions to anticipate plausible futures?
scenario planning
Which of the following is an assumption that top-down strategic planning rests on?
We can predict the future from the past
True Help is a nonprofit organization that works toward rehabilitating the homeless. The credo of the organization is "help us help you." For an organization like True Help, which of the following would make an appropriate mission?
We help the homeless gain and sustain financial independence by providing employment opportunities.
The CEO of Sam's Club, Rosalind Brewer, reports to Walmart's CEO, C. Douglas McMillon, who as corporate executive oversees Walmart's entire operations. Sam's Club, therefore, is a _____ of Walmart.
strategic business unit
Lower-level employees focus mainly on _____ when a firm is using top-down or scenario planning as an approach to the strategic management process.
strategic implementation
A _____ is best described as any activity a firm pursues to explore and develop new products and processes, new markets, or new ventures.
strategic initiative
A traditional top-down strategic planning process typically begins with
strategic leaders adjusting a company's vision and mission based on environmental analysis.
As the CEO of a conglomerate, Juana Mark exhibited her strong commitment toward the company's core value that customers' well-being is more important than profit when she decided to liquidate the company's tobacco subsidiary. The tobacco brand sold by her company was a major revenue earner in lesser-developed nations. However, Juana believed that her company had to be responsible toward society. In this scenario, Juana has demonstrated
strategic leadership
An intended strategy is best described as
the outcome of a rational and structured, top-down strategic plan
Visionary companies are able to outperform their competitors because
they provide more aspirational visions
Leadership is a necessary (but not sufficient) condition for organizational success. Leaders should emerge at which level(s) of an organization?
throughout the organization
The Chief Executive Officer (CEO) of Yahoo, Marissa Mayer, maintains that if a company builds the best product possible, profits will come. Identify the phrase that represents the new vision she developed for Yahoo.
to make the world's daily habits more inspiring and entertaining
When do employees fail to adopt the organizational values of a firm?
when the top managers in the firm are merely paying lip service to the firm's stated values