Ch 1
Corporate level strategy focuses on what businesses to compete in and A. how business can be managed to achieve synergy. B. how business can be managed to reduce synergy. C. how the firm can work as a stand-alone entity. D. how the firm can create more value by operating alone.
A
Corporate-level strategy looks at how to manage the ______ of its businesses to create synergies. A. portfolio B. stockprices C. competitors D. marketpricing
A
The four key attributes of strategic management include the idea that strategy must A. be directed toward overall organizational goals and objectives. B. be focused only on long-term objectives. C. be focused on only one specific area of an organization. D. focus only on competitor strengths.
A
The vision and mission statements of a company set the overall direction of the organization. Strategic objectives serve what role? A. operationalize the mission statement B. modify the mission statement C. are a shorter version of the mission statement D. are only clarified by the board of directors
A
Transformational change involves A. extensive communication. B. little training. C. no employee development. D. few incentives.
A
We want to be the top-ranked supplier to our customers. (PPG) This is an example of a A. nonfinancial strategic objective. B. financial strategic objective. C. vision statement. D. mission statement.
A
T/F What constitutes socially responsible behavior changes over time.
TRUE
Community stakeholders are concerned primarily with A. product warranties. B. corporate citizenship behavior. C. capital appreciation. D. repayment of principal.
B
Effective organizational design means that firms must have ________ that are consistent with their strategy. A. designs and plans B. organizational structures and designs C. adopters and designs D. adopters and plans
B
Effective vision statements include A. all strategic directions of the organization. B. a brief statement of the company's direction. C. strategic posturing and future objectives. D. financial objectives and projected figures.
B
Sustainability programs often find their success beyond company boundaries, thus ______ systems and _____ metrics cannot capture all of the relevant numbers. A. external; bio B. internal; process C. external;external D. internal; internal
B
WellPoint Health Network states: WellPoint will redefine our industry: through a new generation of consumer-friendly products that put individuals back in control of their future. This is an example of a A. strategic objective. B. vision statement. C. vague statement of direction. D. line manager's individual goal.
B
Which of the following is not an example of a financial strategic objective? A. Increase sales growth 6% to 8%and accelerate core net earnings growth from 13% to 15% per share in each of the next 5 years. (Procter & Gamble) B. Reduce volatile air emissions 15 percent by 2015 from 2010 base year, indexed to net sales. (3M) C. Generate Internet-related revenue of $1.5billion.(AutoNation) D. Cut corporate overhead costs by $30 million per year. (Fortune Brands)
B
Whirlpool's transformation under corporate vice president Nancy Snyder included financial investments in A. share holder dividends. B. capital spending. C. community development. D. paying down borrowed debt.
B
According to the Corporate Citizenship poll conducted by Cone Communications, most Americans say they would be likely to switch brands to one associated with a good cause if there are similarities between A. price and availability. B. availability and quality. C. price and quality. D. price and durability.
C
__________ may be considered the advance work that must be done in order to effectively formulate and implement strategies. A. Goal setting B. Corporate entrepreneurship C. Strategy analysis D. Organizational design
C
A key stakeholder group that is particularly susceptible to corporate social responsibility (CSR) initiatives is A. suppliers. B. rivals. C. government agencies. D. consumers.
D
According to the external control view of leadership, which of the following factors would not be considered an external factor that might positively or negatively affect a firm's success? A. economic downturns B. governmental legislation C. outbreak of war D. company employee morale
D
The text addresses two perspectives of leadership as well as their implications. These two perspectives are A. romantic and unromantic. B. romantic and internal control. C. external control and unromantic. D. romantic and external control.
D
Two types of strategic control that firms must exercise for good strategy implementation are A. informational and confrontational. B. confrontational and behavioral. C. behavioral and financial. D. informational and behavioral.
D
Vision statements are used to create a better understanding of the overall purpose and direction of the organization. Vision statements A. are very specific. B. provide specific objectives. C. set organizational structure. D. evoke powerful and compelling mental images.
D
Wall Street executives have received excessive bonus pay in the past. This concerns which of the following stakeholder groups most directly? A. government B. suppliers C. creditors D. stockholders
D
T/F As a stakeholder group, creditors are interested in taxes and compliance with regulations.
FALSE
T/F As a stakeholder group, customers are interested in dividends and capital appreciation.
FALSE
Focusing on a single stakeholder is a good strategic principle for managers to follow.
FALSE
T/F According to the text, a mission statement is an overarching statement that is massively inspiring, long term, and only discusses the purpose of the company.
FALSE
T/F All successful firms compete and outperform their rivals by developing bases for competitive advantage, which can be achieved only through cost leadership.
FALSE
T/F Ambidexterity refers to a manager's challenge to align resources, without having to take advantage of existing product markets or to proactively explore new opportunities.
FALSE
T/F An idealistic vision can arouse employee enthusiasm and therefore is a good vision.
FALSE
T/F Effective mission statements incorporate the concept of stakeholder management, suggesting that organizations must respond to a single constituency.
FALSE
T/F Ensuring effective corporate governance requires an effective and engaged board of directors, uninvolved shareholders, and proper managerial rewards and incentives.
FALSE
T/F Entrepreneurial activity aimed at new value creation is not a major engine for economic growth.
FALSE
T/F Firms must exercise either informational control or behavioral control in order to assure proper strategy implementation.
FALSE
T/F Focusing on the short term and efficiency is always a bad management principle.
FALSE
T/F For many successful firms, environmental values are not central to the company culture and management processes.
FALSE
T/F A good mission statement, by addressing each principal theme, must communicate why an organization is special and different.
TRUE
T/F A key stakeholder group that appears to be particularly susceptible to corporate social responsibility (CSR) initiatives is customers.
TRUE
T/F Stakeholders make various claims on a company. Their interests must be taken into account in the strategic management process.
TRUE
T/F A mission statement encompasses both the purpose of the organization as well as its basis of competition, and the basis of its competitive advantage.
TRUE
T/F According to Peter Senge, a leading strategic management author, creative tension results from the need to incorporate both short-term and long-term perspectives in strategic management.
TRUE
T/F According to a recent study involving 41 business units in 10 multinational companies, one ambidextrous behavior exhibited by managers is that of being brokers who are always looking to build internal networks.
TRUE
T/F As a stakeholder group, communities are interested in good citizenship behavior.
TRUE
T/F Auditors, banks, and analysts are external control mechanisms to ensure effective corporate governance.
TRUE
T/F Both the internal and external environments of a firm must be analyzed as well as the goals of the firm before managers can formulate and implement appropriate strategies.
TRUE
T/F Effective leadership can play a large role in fostering corporate entrepreneurship. Corporate entrepreneurship can have a very positive impact on the bottom line of a firm.
TRUE
T/F Environmental sustainability is a value embraced by the most competitive and successful multinational companies.
TRUE
T/F Hewlett-Packard's failure and success under the leadership first of Carly Fiorina and then of Mark Hurd was said to be a direct result of the quality of leadership of each of these CEOs. According to the text, this would be an example of the "romantic" perspective of leadership.
TRUE
T/F International strategy involves decisions concerning appropriate entry strategy and attaining competitive advantage in international markets.
TRUE
T/F Making trade-off decisions between effectiveness and efficiency is central to the practice of strategic management.
TRUE
T/F Management innovations such as total quality, just-in-time, benchmarking, business process reengineering, and outsourcing are important, but not enough for building sustainable competitive advantage.
TRUE
T/F Nancy Snyder, corporate vice president of Whirlpool, shifted the reputation of the firm to that of an innovator by investing financially in capital spending.
TRUE
T/F Objectives in organizations should be clear, stated, and known by employees throughout the organization.
TRUE
T/F One of the reasons a vision fails is that too much focus can lead to missed opportunities.
TRUE
T/F Partnering with governments, communities, suppliers, customers, and rivals is a way to manage conflicting stakeholder interests.
TRUE
T/F Procter and Gamble developed a laundry detergent compaction technique that appeals to consumers, retailers, shipping and wholesalers, and environmentalists. This is an example of stakeholder symbiosis.
TRUE
T/F Richard Branson, the founder of the Virgin Group, is well known for creating an inclusive organizational structure in which anybody in the organization can be involved in generating and activating upon new business ideas.
TRUE
T/F Shell, NEC, and Procter and Gamble have been measuring their performance according to what has been called a triple bottom line. This technique involves an assessment of financial, social, and environmental performance.
TRUE
T/F Social responsibility is the idea that organizations are not only accountable to stockholders but also to the community-at-large.
TRUE
T/F Stockholders, employees, and the community-at-large are among the stakeholders of a firm.
TRUE
T/F Strategic management consists of the analyses, decisions, and actions an organization undertakes in order to create and sustain competitive advantages.
TRUE
T/F Strategic management is concerned with the analysis of strategic goals as stated in the vision, mission, and strategic objectives of a firm.
TRUE
T/F Strategic objectives are more specific than vision statements.
TRUE
T/F Strategy formulation involves decisions made by firms regarding investments, commitments, and other aspects of operations that create and sustain competitive advantage.
TRUE
T/F Strategy implementation involves actions that carry out the formulated strategy including proper strategic controls, organizational designs, and leadership.
TRUE
T/F Sustainability is being increasingly recognized as a source of cost efficiencies and revenue growth.
TRUE
T/F Symbiosis is the ability to recognize interdependencies among the interests of multiple stakeholders within and outside an organization.
TRUE
T/F The final realized strategy of a firm is a combination of deliberate and emergent strategies.
TRUE
T/F The intangible benefits of sustainability projects, such as reducing risks, staying ahead of regulations, pleasing communities, and enhancing employee morale, are substantial even when they are difficult to quantify.
TRUE
T/F The three interrelated and principal activities of strategic management are: strategy analysis, strategy formulation, and strategy implementation.
TRUE
T/F The vision of an organization is the top level of its hierarchy of organizational goals. The vision statement should be massively inspiring, overarching, and long term.
TRUE
T/F There is a positive influence of CSR on the consumer evaluation of companies and their purchasing decisions, according to recent studies.
TRUE
T/F To develop and mobilize people and other assets, leaders are needed throughout the organization.
TRUE
T/F To inculcate a strategic management perspective, managers must often make a major effort to effect transformational change.
TRUE
T/F Visions need to be anchored in reality in order to be successful.
TRUE
T/F When formulating strategic objectives, managers need to remember that too many objectives can result in a lack of focus and diminished results.
TRUE
The Clorox Green Works line of plant-based cleaning materials captured 42 percent of the natural cleaning products market in its first year. This is an example of the benefit of A. sustainability efforts. B. cost reduction efforts. C. marketingprograms. D. process management.
A
A CEO made a lot of mistakes in assessing the market and the competitive conditions and improperly redesigning the organization into numerous business units. Such errors led to significant performance declines. According to the text, this example illustrates the __________ perspective of leadership. A. external control B. romantic C. internal mechanism D. operational
B
According to a CEO survey by Accenture, __________________ are not mutually exclusive corporate goals. A. quality and profitability B. sustainability and profitability C. ROIandquality D. availabilityandROI
B
According to the text, the strategic management process entails three ongoing processes. They are A. analyses, actions, and synthesis. B. analyses, decisions, and actions. C. analyses, evaluation, and critique. D. analyses, synthesis, and decisions.
B
Employee stakeholders are concerned with A. taxes, warranties, and regulations. B. wages, benefits, and job security. C. good citizenship behavior. D. dividends.
B
Executive leaders champion and guide ideas by A. reinforcing ideas that did not work. B. creating a learning infrastructure. C. validating their formal authority. D. increasing their personal power.
B
Fortune Brands states they will cut corporate overhead costs by $30 million a year. This is an example of a A. non financial strategic objective. B. financial strategic objective. C. vision statement. D. mission statement.
B
In contrast to the vision of an organization, its mission should A. be shorter in length. B. encompass both the purpose of the company as well as the basis of competition. C. encompass all the major rules and regulations of the corporate workforce. D. be less detailed.
B
Learning organizations permit the entire organization to benefit from ____________ talents. A. internal and external B. individual and collective C. internal and collective D. external and individual
B
Members of boards of directors are A. appointed by the Securities and Exchange Commission. B. elected by the shareholders as their representatives. C. elected by the public. D. only allowed to serve one term of four years.
B
Peter Senge, of MIT, recognized three types of leaders. These individuals champion and guide ideas, create a learning infrastructure, and establish a domain for taking action. A. local line leaders B. executive leaders C. internal networkers D. shop floor leaders
B
Stakeholders are Level of Difficulty: 1 Easy Topic: The Role of Corporate Governance and Stakeholder Management A. a new way to describe stockholders. B. individuals, groups, and organizations who have a stake in the success of the organization. C. creditors who hold a lien on the assets of the organization. D. attorneys and their clients who sue the organization.
B
While working to prioritize and fulfill their responsibilities, members of the board of directors of an organization should A. represent their own interests. B. represent the interests of the shareholders. C. direct all actions of the CEO. D. emphasize the importance of short-term goals.
B
According to the text, the triple bottom line approach to corporate accounting includes which three components? A. financial, environmental, and customer B. financial, organizational, and customer C. financial, environmental, and social D. financial, organizational, and psychological
C
All of the following are ambidextrous behaviors except A. taking initiative and being alert to opportunities beyond the job description. B. being cooperative and seeking opportunities to combine personal efforts with that of others. C. intensely focusing on the responsibilities of one individual and maximizing the output of the department in the organization in which that individual works. D. being brokers, always looking to build internal linkages.
C
Effective leaders set a direction and develop an organization so that it is committed to excellence and ___________ behavior. A. performant B. strategic C. ethical D. positive
C
Effectiveness is often defined as A. doing thing sright. B. stakeholder satisfaction. C. doing the right thing. D. productivity enhancement.
C
Entering foreign markets requires firms to ascertain foremost how they will attain A. market share. B. low costs. C. competitive advantage. D. low returns on investment.
C
In large organizations, conflicts can arise between functional areas. In order to resolve these conflicts, strategic objectives A. put financial objectives above human considerations. B. align departments toward departmental goals. C. help resolve conflicts through their common purpose. D. cause debate and increase conflict.
C
Internal networks generate their power through the _____________ of their ideas. A. validity and correctness B. conviction and clarity C. validation and recognition D. approval and awareness
C
Leadership is a necessary (but not sufficient) condition for organizational success. Leaders should emerge at which level(s) of an organization? A. only at the top B. in the middle C. throughout the organization D. only during times of change
C
Local line leaders have __________ responsibility. A. local B. executive C. profit-and-loss D. no
C
Many organizations have a large number of functional areas with very diverse and sometimes competing interests. Such organizations will be most effective if A. each functional area focuses on achieving their own goals. B. goals are defined at the bottom and implemented at the top. C. functional areas work together to attain overall goals. D. management and employees have separate goals.
C
Northrup Grumman saved $2 million in energy costs at a single facility by installing reflective roofs and fluorescent lighting, replacing old equipment, and making minor temperature and humidity-level adjustments. This is an example of the benefit of A. increasing revenue efforts. B. marketing programs. C. sustainability efforts. D. process management.
C
Stockholders as a stakeholder group are interested primarily by A. payment of interest and repayment of principal. B. value and warranties. C. dividends and capital appreciation. D. taxes and compliance with regulations.
C
Strategy formulation and implementation is a challenging ongoing process. To be effective, it should not involve A. the CEO and the board of directors. B. the board of directors, CEO, and CFO. C. rivals. D. line and staff managers.
C
Successful organizations are effective in motivating people. Employees work best when A. they are asked to do their best. B. work requirements are vague and unclear. C. they are striving toward specific goals. D. they are guided by an abstract mission statement.
C
The Fairmont Royal York in Toronto invested $25,000 in an energy conservation program to replace leaky steam traps and fix leaks, which resulted in an annual savings of over $200,000. This is an example of a sustainability effort to A. increase innovation. B. decrease revenue. C. lower costs. D. increase customers.
C
The case for sustainability projects needs to be made on the basis of a more holistic and comprehensive understanding of all the _____________ benefits. A. measurable and unmeasurable B. financial and physical C. tangible and intangible D. measurable and physical
C
The hierarchy of organizational goals is in this order (least specific to most specific): A. vision statements, strategic objectives, mission statements B. mission statements, strategic objectives, vision statements C. vision statements, mission statements, strategic objectives D. mission statements, vision statements, strategic objectives
C
The organizational versus the individual rationality perspective suggests that objectives that are A. good for a functional area are always good for the overall organization. B. good for the overall organization are always best for a functional area. C. best for a functional area may not be best for the overall organization. D. best for one functional area will never be best for all functional areas.
C
The text argues that a strategic perspective in an organization should be emphasized A. at the top of the organization. B. at the middle of the organization. C. throughout the organization. D. from the bottom up.
C
The three participants in corporate governance are the shareholders, A. board of directors, and employees. B. labor unions, and employees. C. board of directors, and management. D. banks and lending institutions, and management.
C
Tim Brown, CEO of IDEO, believes that the ________ of a person should not dictate the level of influence their ideas should be accorded. A. age B. seniority C. position D. education
C
Ambidextrous behaviors in individuals illustrate how a dual capacity for _______ can be woven into the fabric of an organization at the individual level. A. alignment and adaptability B. alignment and transparency C. alignment and internal linkages D. alignment and efficiency
D
In choosing to focus on stakeholders, which of the following will not lead to success for a manager? A. shareholders and employees B. employees and suppliers C. customers and the community at large D. customers only
D
In large organizations, the potential exists for different parts of an organization to pursue its own goals rather than the overall company goals. Proper _______ can help to resolve conflicts when they arise. A. mission statements B. vision statements C. organization structure D. objectives
D
In strategic management, both the short-term and long-term perspectives need to be considered because A. shareholder value is only measured by short-term returns. B. shareholders only care about long-term returns. C. long-term vision precludes the analysis of present operating needs. D. the creative tension between the two forces managers to develop more successful strategy.
D
Management innovations such as total quality, benchmarking, and business process reengineering cannot lead to sustainable competitive advantage because A. companies that have implemented these techniques have lost money. B. there is no proof that these techniques work. C. they cost too much money and effort to implement. D. every company is trying to implement them.
D
New value creation is a major engine for economic growth and is the main focus of _______________ strategy. A. portfolio B. corporate-level C. business-level D. entrepreneurial
D
Richard Branson, founder of the Virgin Group, empowers his companies through a(n) _______ structure in which anyone can bring forth new ideas. A. formal B. hierarchal C. multi-level D. informal
D
Strategic management involves the recognition of trade-offs between effectiveness and A. cost. B. value. C. returnoninvestment. D. efficiency.
D
Strategy analysis is the starting point of the strategic management process and consists of the A. analysis only of the vision, mission, and objectives of the firm. B. analysis of the relevant internal and external environmental factors only. C. analysis of relevant competitors only. D. matching of vision, mission, and objectives with the relevant internal and external environmental factors.
D
The Sustainable Apparel Coalition accounts for more than one-third of the global A. apparel and washing product industry. B. consumer product industry. C. refinery industry. D. apparel and footwear industry.
D
The four key attributes of strategic management include all of the following except A. including multiple stakeholder interests in decision making. B. incorporating both short-term and long-term perspectives. C. recognizing the trade-offs between effectiveness and efficiency. D. emphasis on the attainment of short-term objectives.
D
T/F Business-level strategy focuses on (1) what businesses to compete in and (2) the management of the business portfolio to create synergy among its businesses.
FALSE
T/F Corporate-level strategy addresses how firms compete and outperform their rivals as well as achieve and sustain competitive advantages.
FALSE
T/F Decisions by boards of directors are always consistent with shareholder interests.
FALSE
T/F Demands for greater corporate responsibility are decreasing today.
FALSE
T/F Former Chrysler vice chairman Robert Lutz observed that companies exist to serve the shareholder and create shareholder value. He insisted that the only person who owns the company is the person who paid good money for it. This is an example of a symbiotic approach to stakeholder management.
FALSE
T/F Internal networks have great positional power and formal authority.
FALSE
T/F Leaders are responsible for creating a learning organization so that the entire organization can benefit only from the individual talents.
FALSE
T/F Only shareholders in a publicly held company are stakeholders because they are the only group that has a stake in the success of the organization.
FALSE
T/F Organizational goals and objectives should be vague in order to allow for changes in strategy.
FALSE
T/F Shareholders expect only short-term value and therefore good managers should only focus on meeting short-term performance targets.
FALSE
T/F Stockholders in a company are the only individuals with an interest in the financial performance of the company.
FALSE
T/F Strategic management is not concerned with how to create competitive advantage in the marketplace.
FALSE
T/F Strategic management is only concerned with short-term perspectives.
FALSE
T/F Strategic management requires managers at all levels of the organization to take a segregated view of the organization.
FALSE
T/F Strategic management should only include short-term objectives. Long-term objectives are covered in the vision statement of the organization.
FALSE
T/F Strategic objectives should be measurable, specific, appropriate, and realistic, but not constrained by time deadlines.
FALSE
T/F Strategy analysis is the study of the external environments of the firm.
FALSE
T/F Sustainability initiatives rarely have difficulty making it through the conventional approval process within corporations because managers are not concerned about their return on investment.
FALSE
T/F Sustainability projects often require shorter-term payback windows than other projects.
FALSE
T/F The three primary participants in corporate governance are: (1) the shareholders, (2) the management (led by the chief executive officer), and (3) the employees.
FALSE
Supplier stakeholders are concerned with A. assurance of a continued relationship with the firm. B. employee benefits. C. safe working conditions. D. capital appreciation.
A
Strategy formulation at the business level addresses best how to compete in a given business: A. to attain competitive advantage B. to reduce costs C. to decrease buyer power D. to thwart entry of new rivals
A
Although such visions cannot be accurately measured by a specific indicator of how well they are being achieved, they do provide a fundamental statement of the __________ of an organization. A. values, aspirations, and goals B. expected returns and limitations C. outstanding debt D. credibility
A
An organization is responsible to many different entities. In order to meet the demands of these groups, organizations must participate in stakeholder management. Stakeholder management means that A. interests of the stockholders are not the only interests that matter. B. stakeholders are second in importance to the stockholders. C. stakeholders and managers inevitably work at cross-purposes. D. all stake holders receive financial rewards.
A
Melvin Alexander, executive director of Principled Solutions Enterprise, a management consulting firm specializing in health care, suggests that environmental changes oblige firms to make strategic changes in order to survive. Which of the following is one of the strategic changes he foresees will occur in the next three to five years? A. changes in the behavior of the health care consumers B.reduction in the number of available medical doctors C. increases in the number of locations of health care facilities D. decreases in information technology investment
A
Methods by which successful executives show their interest in learning what others are thinking include A. holding townhall meetings and consulting employees on what they would do if in charge. B. holding townhall meetings and consulting bankers on what they would do if in charge. C. holding retreats and consulting rivals on what they would do if in charge. D. consulting rivals and consulting investment bankers.
A
Some benefits of sustainability projects include A. reducing risks. B. lagging behind regulations. C. displeasing communities. D. ignoring employee morale.
A
Strategies should be formulated that enhance foremost the ____________ capacity of a firm. A. innovative B. learning C. implementation D. business-level
A
