SB Chapter 1

The field of management that focuses on attaining competitive advantage by combining analysis, formulation, and implementation is known as ______.

strategic management

A(n) ______ occurs when a firm performs below the industry average or is outperformed by its competitors.

competitive disadvantage

Which framework helps firms to identify their economic, legal, ethical, and philanthropic obligations to society?

corporate social responsibility

In the _____ step of the stakeholder impact analysis, firms identify their various social responsibilities to stakeholders.

fourth

What must a firm do after diagnosing its specific competitive challenge?

Create an effective guiding policy

Effective guiding policy is supported by and stays consistent through the use of ______.

Strategic commitments

Place the five steps of the stakeholder impact analysis in order, with the first step at the top.

Who are our stakeholders? What are our stakeholders' interests? What opportunities and threats do our stakeholders present? What economic, legal, ethical, and philanthropic responsibilities do we have to our stakeholders? What should we do to effectively address the stakeholder concerns?

Which of the following questions are part of the five steps in stakeholder impact analysis?

Who are our stakeholders? What opportunities and threats do our stakeholders present? What are our stakeholders' interest and claims?

When a stakeholder has power over a company it is ______.

able to influence the company to do something it would otherwise not do.

To which types of organizations can we apply the principles of strategic management?

all types of organizations

Which of the following elements comprise strategic management? (Check all that apply.)

formulation implementation analysis

In the second step of the stakeholder impact analysis, managers need to identify and understand stakeholders' ______.

interests and claims

Which of the following is a tool that managers can use to address the needs of stakeholders while maintaining a competitive advantage?

stakeholder impact analysis

A competitive advantage that lasts for a long period of time is said to be ______.

sustainable

In the ______ step of the stakeholder impact analysis, the firm identifies the opportunities and threats that stakeholders present to the firm.

third

In the external analysis phase of the AFI strategy framework, managers should ask,

"How do external forces affect our strategy and competitive advantage?"

Burger Bomb has been outperforming other burger restaurants in recent years. This indicates that Burger Bomb has which of the following?

A competitive advantage

What is the first step in the AFI strategy framework?

Analysis

True or false: A statement such as, "We will be the biggest company in the world," is an example of strategy.

False

Which of the following statements regarding tasks in the AFI strategy framework is true?

The tasks are very interdependent

A stakeholder has ______ when its needs are within the bounds of the law or are otherwise relevant to the firm.

a legitimate claim

Burger Bomb is a new hamburger restaurant. In order to compete successfully against its many competitors, Burger Bomb has decided to focus on quality and an interesting, unique menu that uses locally sourced, organic ingredients. This is known as Burger Bomb's ______.

strategy

In order to determine if Home Depot has a competitive advantage, we must compare Home Depot's performance to ______.

the performance of other firms in its industry

Which of the following are the relationships that a firm has with stakeholders?

The actions of the firm can affect stakeholders. Stakeholders can affect the firm's actions

In which of the following situations can a firm providing goods and services gain a competitive advantage?

Their offerings are similar quality to competitors' offerings but can be sold at lower prices due to lower costs. Their offerings provide more value for consumers than competitors' offerings. Their offerings are similar to competitors' offerings at higher prices.

Among the various types of responsibilities a business firm has, which are specifically considered to be economic responsibilities? (Check all that apply.)

giving investors a return on invested capital. repaying debts to creditors.

In the ______ step of the stakeholder impact analysis the firm identifies their stakeholders' interests and claims according to the power, legitimacy, and urgency framework.

second

A firm's attempts to manage the web of relationships between internal and external stakeholders in order to create value is known as ______.

stakeholder strategy

The groups or individuals who can impact or be impacted by a firm's actions are known as ______.

stakeholders

Strategy is ______.

the set of actions a firm takes to achieve a competitive advantage

Walmart and Nordstrom maintain very different strategic profiles, one based on cost-leadership and the other based on differentiation through superior customer service. This is an example of ______.

the trade-offs required by strategic positioning

Managers often have to make decisions between two conflicting strategic options, otherwise known as ______.

trade-offs

Competitive parity occurs when ______.

two or more firms achieve the same performance results

The third step of stakeholder impact analysis requires managers to identify the ______ presented by internal and external stakeholders.

opportunities and threats

The overall purpose of a firm's strategy is to ______.

perform better than other companies in the same industry

Strategic positioning allows managers to ______.

provide customers value while controlling costs.

The concept, or framework, of corporate social ___ guides firms in identifying and addressing their economic, legal, ethical, and philanthropic obligations to society.

responsibility

Which statement about strategies is true?

A statement of desire on its own often leads to goal conflict.

What are the categories of expectations that society has of the business enterprise as described in the CSR framework? (Check all that apply.)

Legal Economic Philanthropic Ethical

Which of the following elements of the pyramid of corporate social responsibilities are result from a society's expectations toward business? (Check all that apply.)

philanthropic responsibilities. ethical responsibilities

Stakeholder impact analysis is a _____-step process that allows managers to better understand and address stakeholders' needs.

five

Microsoft donating more than $3 billion in cash and software to people in need is an example of which type of corporate social responsibility?

Pilanthropic

Match the element of the pyramid of corporate social responsibility (on the left) with its explanation (on the right).

Philanthropic responsibilities<->corporate citizenship Ethical responsibilities<->do what is right, just, and fair Legal responsibilities<->laws and regulations are society's codified ethics; define minimum acceptable standard Economic responsibilities<->gain and sustain competitive advantage

Which of the following are aims of stakeholder strategy? (Select all that apply.)

To manage various stakeholders effectively. To gain and sustain competitive advantage

True or false: Firms should obey all the laws, including but not limited to labor, consumer protection, and the environment.

True

If a firm has a 10% return on invested capital while the industry average return on invested capital is 18%, the firm has a(n) ______.

competitive disadvantage

Michael's Deli is able to perform at the same level as its primary competitor. Michael's Deli has ______.

competitive parity

Which of the following legal developments allow business to function as an institution? (Check all that apply.)

contract enforcement property rights

Which of the following are primary strategy objectives? (Check all that apply.)

controlling costs creating value

The idea that firms should voluntarily give back to society when they are able to do so is also known as ______.

corporate citizenship

When identifying stakeholders, a firm should focus on those stakeholders that ______.

currently have, or could potentially have, a material effect on the firm

Internet privacy, genetic engineering, and stem-cell research are examples of areas in which a firm's ______ responsibilities exceed its legal responsibilities.

ethical

Starbucks's commitment to fair trade and responsible growing practices indicates that the firm takes its ______ responsibilities seriously.

ethical

In the ______ step of a stakeholder impact analysis, firms identify those stakeholders that currently have, or potentially can have, a material effect on the company.

first

A competitive advantage _____.

is assessed relative to other competitors in the industry

Which of the following elements of the pyramid of corporate social responsibility are required by society and shareholders? (Check all that apply.)

legal responsibilities economic responsibilities

Which of the following are the three important stakeholder attributes managers must pay particular attention to during stakeholder impact analysis? (Check all that apply.)

legitimacy urgency power

In a nutshell, strategy is the art and science of ______.

success and failure

Which of the following topics should be considered during the analysis phase of the AFI framework?

the external environment and associated challenges. the firm's business model and competitive advantages. the role of strategic leadership and the strategy process. the firm's internal strengths and resources.

Sustainable competitive advantage exists when a firm ______.

maintains superior performance relative to its industry over a long period of time.

Andrew's Home Center has created a unique situation for itself in its industry that allows the company to not only provide excellent value to its customers but also control its costs. This is known as ______.

strategic positioning

The Bright Bulb light bulb company produces a line of LED bulbs that customers consider very similar to competitors' LED bulbs. Which of the following conditions must be true for Bright Bulb to have a competitive advantage?

The bulb must have a lower cost than competitors' bulbs.

Which of the four corporate social responsibilities is considered first and foremost for business enterprises?

economic