MGT 301 Ch. 2
Which of the following statements about product-oriented visions is true? A) They tend to force managers to take a myopic view of the competitive landscape. B) They allow companies to effectively adapt to changing environments. C) They define a business in terms of providing solutions to customers. D) They allow firms to set goals that focus primarily on filling the organization's needs.
A
A ________ is best described as any activity a firm pursues to explore and develop new products and processes, new markets, or new ventures. A) strategic initiative B) value chain C) supply chain D) corrective action
A
After carefully assessing the market potential for solar-powered mobile devices, the top-level executives of We Know Inc. decided that the company would be launching a line of solar-powered tablets within the next two years. This would mean that the tablet division would need to immediately begin research and development efforts. Which of the following strategies in the planned emergence model does this best illustrate? A) intended strategy B) emergent strategy C) unrealized strategy D) tactical strategy
A
All Foods is the parent company of several chain restaurants offering a variety of cuisines. The top management at All Foods has decided to enter the frozen foods industry based on its assessment of the profit potential in that industry. Which of the following strategies does this best illustrate? A) corporate strategy B) business strategy C) functional strategy D) divisional strategy
A
Do vision statements help firms gain and sustain competitive advantage? A) It depends, because the effectiveness of vision statements differ by type. B) Yes, but only if the vision statements are short, concise and are well written. C) No, vision statements do not, but mission statements do. D) Only if the vision statement follows the strategic management process.
A
Jill is exploring multiple suppliers in order to find the best price. However, instead of calling all eight potential suppliers, she only reaches out to the first three and bases her selection on those instead of contacting all suppliers. Jill's action best describes the concept of A) cognitive limitations. B) optimal decision making .C) the illusion of control. D) escalating commitment.
A
Sam, owner of Sam's Hand Sanitizer Inc., is in the middle of the strategy formulation stage. He has already allocated a substantial amount of money that covered his employees' salaries from the prior year (sunk costs) but has failed to see any positive outcomes. Given the money he has already spent, he feels as if he needs to recover those costs and pushes forward even though the outcome seems dim. This best illustrates the concept of A) escalating commitment. B) optimal decision making. C) cognitive limitations. D) the illusion of control.
A
The CEO of All Star Corp. has decided to enter the markets of emerging nations like China and Brazil. This means that the books, magazines, and websites published under the Chyron Media banner would be made available in these nations. Which of the following strategies does this scenario best illustrate? A) corporate strategy B) functional strategy C) business strategy D) divisional strategy
A
The first step to gain and sustain a competitive advantage is to A) define a firm's vision, mission, and values. B) understand the strategies of the competitors. C) put the guiding policies of a firm into practice. D) develop functional and business-level strategies.
A
To be effective, firms need to A) back up their visions with strategic commitments that are costly and difficult to reverse. B) increase their strategic flexibility by developing product-oriented vision statements. C) isolate top managers from the organizational values. D) pursue visions that are exclusively financial and not aspirational.
A
Visionary companies differ from their competition in that A) employees in visionary organizations find meaning in their work and are motivated. B) a visionary company focuses on scenario planning and future competitive threats. C) in a visionary company it is the CEO's managerial style that gives the company its emergent strategy. D) visionary companies typically emphasize measuring financial performance.
A
Which of the following best represents a customer-oriented vision statement? A) "We provide solutions to professional communication needs." B) "We are in the typewriter business." C) "To be the safest, most progressive North American railroad." D) "We aim to build the fastest computing devices in the World."
A
Which of the following is an example of a business acting upon an organizational core value? A) Emerald Autos reduces engine emissions below federal guidelines to reduce pollution. B) Emerald Autos lowers its retail prices to gain an advantage over its closest competitor. C) Emerald Autos finances research for developing more powerful engines. D) Emerald Autos launches an ad campaign that promotes the company as being environmentally friendly.
A
Which of the following strategy plans might work best in an industry that is considered a fast-changing environment with new laws going into effect regularly? A) scenario planning B) top-down planning C) bottom-up planning D) dominant planning
A
Which of the following summarizes the difference between a firm's vision and mission? A) A vision states what a firm wants to accomplish; a mission states how a firm plans to accomplish this vision. B) A vision states the ethical values of a firm; a mission states the monetary goals of a firm. C) A vision states how much a firm wants to earn; a mission states how these earnings will be accomplished. D) A vision states the management values of a firm; a mission states the values of the other workers.
A
________ are considered the ethical standards and norms that govern the behavior of individuals within a firm. A) Organizational core values B) Mission statements C) Vision statements D) Strategic leadership
A
Alan has been an employee with StartsInc. for 15 years. He started with an entry-level job, and today he is a manager of an entire division. Over the years, Alan has acquired a reputation for doing the right things in the company. Hence, as an efficient leader, he is capable of effectively communicating and motivating his subordinates to work toward the company's vision and mission. According to the Level-5 leadership pyramid, which is the highest level of leadership Alan has reached so far? A) Level 5 B) Level 4 C) Level 3 D) Level 2
B
Dora's Supplies manufactures medical devices. The firm's profitability depends on several variables that are subject to occasional change, including the cost of parts and labor, changes in medical practices, and the price of oil used in both manufacturing and shipping. To account for the potential impact of changes to any of these variables, Dora's Supplies managers should implement a(n) ________ approach. A) top-down strategic planning B) scenario planning C) upper-echelon D) strategic business units
B
How do strong ethical values benefit a firm? A) They lay the groundwork for a quick increase of profits and short-term success. B) They serve as the guardrails put in place to keep the company on track when pursuing its mission. C) They provide strong public relations, which can either benefit or hinder competitive advantage. D) They emphasize benefiting stakeholders by significantly increasing profit.
B
In the top-down strategic planning approach, all strategic intelligence and decision-making responsibilities rest primarily on the A) functional managers. B) chief executive officer.C) external stakeholders. D) general manager.
B
Organizational core values are the ________ that govern the behavior of individuals within a firm or organization. A) economic measures B) ethical standards and norms C) political principles and policies D) social beliefs and actions
B
Strategic commitments are actions that are A) inexpensive. B) long-term-oriented. C) easy to reverse. D) easy to imitate.
B
To support the rise of emergent strategies, an organization should A) centralize decision making and all other activities. B) empower lower-level employees to take up autonomous actions. C) limit serendipity that is in the form of random events and accidental happenstances. D) rely solely on hard data to formulate strategies.
B
Which of the following statements is true of corporate strategy? A) The objective of corporate-level strategy is to ensure that the sum of the values of individual business units is greater than the overall corporate value. B) A corporate strategy must be able to create synergies across business units that are quite different. C) Formulating a corporate strategy involves general managers answering questions relating to how to compete in order to achieve superior performance. D) Deciding whether to adopt a differentiation or a cost-leadership strategy is part of formulating the corporate strategy.
B
A positive relationship between vision statements and firm performance is more likely to exist when A) visions are product-oriented. B) internal stakeholders are isolated from defining and revising the visions. C) organizational structures are aligned with the firm's vision statement. D) vision statements are equivalent to listening to the customers.
C
A traditional top-down strategic planning process typically begins with A) employees at the operational level identifying problems within an organization. B) functional managers formulating functional strategies for their respective departments. C) strategic leaders adjusting a company's vision and mission based on environmental analysis. D) employees who have close contact with customers taking autonomous actions.
C
As a part of strategy formulation, a firm's functional strategy primarily concerns questions relating to A) where to compete. B) when to compete. C) how to implement business strategy. D) how to enter target markets.
C
EverMart Inc. is a large company that sells a variety of products such as cosmetics, jewelry, frozen foods, navigation electronics, and airplanes. Apart from this, the company also has a strong presence in the service industry through its chain of dance studios, casinos, and nightclubs. Each of its product divisions operates as an individual business and is responsible for its own profits and losses. Thus, these product divisions under EverMart can be referred to as A) limited liability companies. B) functional departments. C) strategic business units. D) corporations.
C
Strategic commitments are actions that are A) inexpensive, long-term-oriented, and difficult to reverse. B) inexpensive, short-term-oriented, and easy to reverse. C) costly, long-term-oriented, and difficult to reverse. D) costly, short-term-oriented, and easy to reverse.
C
The CEO of EveryCar was the child of parents who had difficulty making enough money to support their family. As a result, he and his siblings did not have access to many advantages that children from wealthier families had. This CEO, therefore, emphasized making affordable, low-maintenance vehicles that could be bought by low-income households. Which of the following does this example demonstrate? A) dominant strategic planning B) Level-5 leadership pyramid C) upper-echelons theory D) scenario planning
C
Strategies developed at the departmental level, such as the accounting, human resources, production, and marketing departments, within a strategic business unit are referred to as ________ strategies. A) grand B) corporate C) business D) functional
D
When young start-up entrepreneurs make claims like, "We will be the Uber of X, where X is any other category than ride hailing" or "We will be the Airbnb of Y, where Y is any other category than hospitality services" they are best illustrating which of the following cognitive biases? A) groupthink B) escalation of commitment C) representativeness bias D) confirmation bias
C
Which of the following is a customer-oriented vision? A) to be the most progressive insurance company B) to be the best automobile company in the world C) to enable businesses to improve their employee communications D) to manufacture innovative products through continuous learning
C
Why is it better for firms to keep their vision statements customer-oriented rather than product-oriented? A) Customer-oriented visions tend to have a more short-range view of changing environments. B) Customer-oriented visions tend to have a more myopic view of changing environments. C) Customer-oriented visions tend to be more flexible when adapting to changing environments. D) Customer-oriented visions tend to be more stable when dealing with changing environments.
C
A customer-oriented vision statement focuses employees to think about how best to A) make a product easier to use. B) increase their efficiency to benefit consumers. C) improve a popular product. D) solve a problem for a consumer.
D
A(n) ________is best described as the strategic option that top managers decide most closely matches the current reality and which is then executed. A) bottom-up emergent strategy B) executive summary C) realized strategy D) dominant strategic plan
D
Brandon 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, Brandon is in ________ of the Level-5 leadership pyramid. A) Level 5 B) Level 4 C) Level 3 D) Level 2
D
Corporate executives at Fly High Inc. decide to compete in the remote model airplane industry by making the largest model planes available. By doing this, they completed part of their ________ strategy. A) implementation B) corporate C) functional D) business
D
Due to political instability in the country of Ferrero, the strategic leaders at the headquarters of Decent Manufacturing have decided to close all production facilities in the country until stability returns. Decent's managers have formulated a ________-level strategy. A) business B) divisional C) functional D) corporate
D
Strategic leadership pertains to the use of power and influence by ________ to direct the activities of others when pursuing an organization's goals. A) production workers B) lower-level managers C) external stakeholders D) corporate executives
D
To implement specific business strategies, general managers of strategic business units rely on A) external stakeholders. B) corporate executives. C) strategic leaders. D) functional managers.
D
Which of the following strategies best illustrates a generic business strategy? A) a cost-cutting strategy that corporate executives in the headquarters want all business units of a large conglomerate to implement B) a strategy to use monetary incentives to motivate employees working on a project C) a decision to computerize a firm's database in order to improve customer service D) a decision to niche market the jewelry sold by a company while the apparel division under the same company sells its products through mass marketing
D
Which of the following summarizes the difference between corporate strategy and business strategy? A) Corporate strategy deals with how to compete; business strategy deals with where to compete. B) Corporate strategy deals with when to compete; business strategy deals with how to compete. C) Corporate strategy deals with how to compete; business strategy deals with when to compete. D) Corporate strategy deals with where to compete; business strategy deals with how to compete.
D
he management of Venture Manufacturing showed a commitment to ________ by increasing the salary of many female employees to meet its goal of having equal pay for women and men who perform comparable work. A) scenario planning B) upper-echelons theory C) product-oriented vision D) organizational core values
D
It is helpful to break down strategy formulation and strategy implementation into five distinct areas.
false
Managers should create two sets of core values: one for employees and one for themselves.
false
Product-oriented vision statements are better suited than customer-oriented vision statements for helping companies to adapt to changes in the external environment.
false
Strategic leaders spend the majority of their time working alone to devise new strategies.
false
Strategy formulation concerns the choice of strategy in terms of when and who to compete with. In contrast, strategy implementation concerns the organization, coordination, and integration of how work gets done.
false
A mission describes how a firm will accomplish the broad goals set out in a vision statement.
true
A vision describes in broad, inspirational terms what an organization hopes to accomplish in the future.
true
An employee lacking some of the innate abilities to be a top-level manager can still become an effective strategic leader through hard work and experience.
true
Core values provide ethical guidelines for how individual employees will behave.
true
Executives whose visions and decisions help their companies achieve competitive advantage can be considered strategic leaders.
true