Chapter 1

What should organizations seek to do with stakeholders that have high levels of interest in the organization but low power? a.monitor b. keep satisfied c. Keep informed d. Manage closely

c. Keep informed

The balance between designed strategy and emergent strategy depends mostly on: a. The type of organizational structure b. The stability and predictability of a firm's environment c. Top managers' personalities d. Middle managers' autonomy

b. The stability and predictability of a firm's environment

Business strategy defines: a. The way a firm competes in a particular industry or market b. How a firm gains a competitive advantage over its rivals within a specific industry or market c. Both a and b d. Neither a nor b

c. Both a and b

Strategic goals should be: a. Simple b. Consistent c. Long term d. All of the above

d. All of the above

For most firms, although good luck may play a part, success is more likely to be a result of a soundly grounded and well executed strategy. a) True b) False

a) True

From the military arena, tactics are about actions and techniques for winning battles, whereas strategy is about winning the war. a) True b) False

a) True

In the 1970's and 1980's, strategy evolved to be viewed more in terms of positioning the company in markets and in relation to competitors in order to maximise the potential for profit.. a) True b) False

a) True

Much can be learned about a firm's actual strategy by looking at where it invests most money, and what products, services and technologies it is working on. a) True b) False

a) True

Paradoxically, the most consistently profitable companies are those whose primary goals are not stated in terms of profits. a) True b) False

a) True

Some observers have noticed that there's only a weak link between a firm's intended or stated strategy, and its actual or realised strategy. a) True b) False

a) True

Sound strategy and effective implementation largely determine the probability and extent of the success of a firm. a) True b) False

a) True

Strategic decisions are likely to have important implications for the organisation as a whole and involve major resource commitment. a) True b) False

a) True

Strategy has been forced to evolve to cope with an increasingly fast-paced and volatile environment, making inflexible long-term plans redundant. a) True b) False

a) True

Strategy has evolved from "strategy as a detailed plan" to become "strategy as direction" in the early 21st century. a) True b) False

a) True

Strategy in the 1950's and 1960's was dominated by corporate planning based on economic forecasting.. a) True b) False

a) True

Strategy is a unifying theme that gives coherence and direction to the actions and decisions of an individual or an organization. a) True b) False

a) True

In practice, strategy making is: a. A combination of centrally-driven rational design and decentralized adaptation b. A combination of luck, organizational politics, and centrally-driven planning c. The expression of political games among top managers d. None of the above

a. A combination of centrally-driven rational design and decentralized adaptation

A strategy can be described as: a. Intended, emergent, or realized b. Intended, emergent, or sustained c. Emergent, critical, or sustained d. Realized, emergent, failed

a. Intended, emergent, or realized

The difference between intended and realised strategy is: a. Significant because studies suggest that only 10 to 30% of intended strategy becomes realised b. Greater in unsuccessful companies c. Unimportant, because no-one ever expects the intended strategy to seriously be implemented d. Only a very small difference, in general

a. Significant because studies suggest that only 10 to 30% of intended strategy becomes realised

If a firm's strategy ensures it is consistent with both its internal and external environment, it achieves: a. Strategic fit b. Strategic adjustment c. Environment consistency d. Political and social fit

a. Strategic fit

Business strategy can be summarized as: a. The means by which organisations achieve their long-term objectives b. The means by which individuals achieve their objectives c. The formal detailed plans used by organizations to guide their actions d. The will of top managers to change their organization

a. The means by which organisations achieve their long-term objectives

Two basic questions concern corporate and business strategy: a. Where and how to compete? b. How and when to compete? c. What are the best arenas and structures to compete? d. When and where to compete?

a. Where and how to compete?

A sound strategy relies on four factors: measurable short-term targets; sound understanding of the competitive environment; objective appraisal of resources; and top down implementation of strategic decisions. a) True b) False

b) False

Company law throughout the developed, industrialised world obliges firms to primarily focus on profit for shareholders. a) True b) False

b) False

Corporate strategy is also called business strategy, or competitive strategy. a) True b) False

b) False

Stakeholder analysis is a useful tool for analysing how profit is distributed amongst shareholders.. a) True b) False

b) False

Strategy is predominantly about countering short-term competition. a) True b) False

b) False

Strategy today is essentially a detailed plan which every member of the organization must follow to ensure success. a) True b) False

b) False

The evolution of business strategy has been driven more by academic thinking than the practical needs of business. a) True b) False

b) False

Usually, business success has been proved to rely in the end on superior resources. a) True b) False

b) False

Strategy is fundamentally about: a. Being better than rivals b. Success in achieving long-term goals c. Satisfying all stakeholders d. Being an excellent "corporate citizen"

b) Success in achieving long-term goals

The shift in strategy from a plan to a direction leads to: a. A downgrade its role in management b. An overt quest for flexibility and responsiveness c. A need for top managers' training d. Less work for top managers

b. An overt quest for flexibility and responsiveness

Strategy and tactics: a. Are interchangeable terms b. Relate to achievement of overall long-term objectives, and multiple short-term objectives, respectively c. Can be seen as what top managers do and what lower level employees do, respectively d. None of the above

b. Relate to achievement of overall long-term objectives, and multiple short-term objectives, respectively

As the environment becomes more turbulent, or unpredictable: a. Strategy appears to not be very useful b. Strategy remains just as vital a tool to navigate the firm through "stormy seas" c. Strategy is put into the hands of external consultants d. Strategy becomes an "impossible exercise"

b. Strategy remains just as vital a tool to navigate the firm through "stormy seas"

In the military field, we generally make the following distinction between strategy and tactics: a. Tactics are the overall plan whereas strategy focuses on specific actions b. Tactics are a scheme of specific everyday actions, practices and techniques whereas strategy relates to the top-level plan c. Tactics encompass specific political actions within the firm whereas strategy is the overall plan for deploying resources to establish a favourable position d. Tactics are the overall plan whereas strategy is concerned with the manoeuvres to win battles

b. Tactics are a scheme of specific everyday actions, practices and techniques whereas strategy relates to the top-level plan

A mission statement: a. is a statement of the company's values b. is a basic statement of the organization's purpose c. outlines what the company wants to be d. articulates the company's competitive strategy

b. is a basic statement of the organization's purpose

Stakeholder analysis: a. is a useful tool for deciding the distribution of profit to shareholders b. is a useful tool for identifying, understanding and prioritizing the needs of key stakeholders c. is a useful tool for mapping potential futures for the organization d. all of the above

b. is a useful tool for identifying, understanding and prioritizing the needs of key stakeholders

Appraising a firm's resources consists of: a. Protecting the firm from its weaknesses and trying to reduce or eliminate them b. Leveraging the firm's strengths to increase market share and profit c. Being very realistic yet creative about what can be achieved with what you've got d. Completing 360-degree analytical evaluations of top managers' strengths and weaknesses

c. Being very realistic yet creative about what can be achieved with what you've got

Corporate and Business strategy differ mainly in that: a. Corporate Strategy has a broader scope, including decisions about which industries to operate in b. Business strategy is subordinate to corporate strategy c. Both a and b d. There is no real difference; they are the same thing

c. Both a and b

The shift from Corporate Planning to Strategy-Making implies: a. From the sources of profit outside the firm to the sources of profit within the firm b. To the Resource-based view of the firm c. Both a and b d. From the structure-based approach to the value-added perspective

c. Both a and b

Modern business strategy has evolved across time due to: a. Business school academics developing new theories, which are taught to new graduates b. Earlier methods have simply been seen as old-fashioned c. Changes in the practical needs of business and developments in academic thought d Computerisation and the internet age meaning that we know more about what's really going on nowadays

c. Changes in the practical needs of business and developments in academic thought

From the two illustrations describing key attributes of strategy at the beginning of the chapter, four factors stand out: a. Goals, environment, appraisal of resources, and social and cultural implications b. Goals, internal and external analysis of the environment, effective implementation, and awareness of rivals' strengths c. Consistent goals, understanding the environment, objective appraisal of resources, and effective implementation d. Goals, environment, irreversibility of decision, and effective implementation

c. Consistent goals, understanding the environment, objective appraisal of resources, and effective implementation

The fundamental role of strategy is to: a. Determine how the firm will make a profit in its industry environment: b. Determine how the firm will deploy its resources to satisfy its short-term financial goals c. Determine how the firm will deploy its resources to satisfy its long-term goals, given the conditions in the competitive environment d. Determine how the firm can organize its own activities and achieve dominance

c. Determine how the firm will deploy its resources to satisfy its long-term goals, given the conditions in the competitive environment

To business organizations, the term 'stakeholders' refers to: a. the organizations shareholders b. all those parties the organization does business with c. all those who have an interest in the company d. all potential and actual employees

c. all those who have an interest in the company

By the early 1980s, thinking on strategy had shifted to: a. an emphasis on macro-economic forecasting and financial planning b. the development of formal corporate plans c. the positioning of firms in markets and a focus on competition d. the analysis the drivers of profitability and the development of diversification strategies

c. the positioning of firms in markets and a focus on competition

Success is fundamentally linked to: a. A soundly formulated strategy and luck b. An effectively formulated strategy and a strong awareness of the rivals' strengths c. A clear understanding of the environment and strong political skills d. A soundly formulated and effectively implemented strategy

d. A soundly formulated and effectively implemented strategy

Corporate Social Responsibility: a. Fits more readily with the central/southern Europe and Asian legal framework of broader stakeholder obligations b. Is not seen as an imperative requirement by all influential thinkers c. Is becoming more important for all firms to take account of due to the threat of adverse publicity d. All of the above

d. All of the above

In addition to just reading published information, to identify a firm's strategy you could a. Identify where the company is making most of its investments b. Identify where the company is doing most of its business c. Find out what new products and services the company is putting most effort into d. All of the above

d. All of the above

In regard to strategy making, most firms are likely to exhibit: a. A combination of design and emergence b. A process labeled as "planned emergence" c. An interaction between strategic design, through formal top-level processes, and strategic enactment through decisions made by all management levels of the organization d. All of the above

d. All of the above

The 1950's/60's style of Corporate Planning assumed that: a. There would be almost no difference between the intended strategy and the realised strategy b. The business world is essentially a predictable environment c. There was unlikely to be anything unexpected to occur of sufficient importance to disrupt the strategic plan d. All of the above

d. All of the above

The role of strategy today is claimed to be: a. A unifying role underpinning all consequent decisions b. A means by which top management can communicate and gain commitment to a sense of direction c. A means by which top management can inspire and motivate the workforce d. All of the above

d. All of the above

The success of an organization in general, depends on the following: a. Being consistently focused on an achievable goal b. Having a strong and in-depth knowledge of the competitive environment c. Realistic appraisal of its own strengths and weaknesses d. All of the above plus the ability to implement strategy with commitment, consistency and determination

d. All of the above plus the ability to implement strategy with commitment, consistency and determination

The notion of "strategic fit": a. Does not mean much, and is a common statement made in strategic literature b. Implies coherence between resources, capabilities, structure and systems c. Expresses how well a firm's strategy fits its internal and external environment d. Answers b and c

d. Answers b and c

Maximising shareholder value: a. Is the sole objective of all profit-making companies in every country b. Is the primary legal obligation only in the English-speaking countries c. Is not the only legal obligation in central & southern Europe, and in Asia. Firms here are legally obliged to take account of a broad range of stakeholder interests d. Both b and c

d. Both b and c

Profit-making firms are about creating value: a. This value is simply the profit generated at the end of the year b. They must create value for several stakeholder groups if this is to result in sustainable long-term profit generation c. Value to some stakeholders eg customers, may be difficult to quantify in money terms d. Both c and b

d. Both c and b

Modern strategy applied to the business world shares with military strategy: a. Only linguistic roots b. Some authors such as Sun Tzu and his "Art of War" c. The existence of resources, conflict, and battle between players d. Decisions of significance to overall success, and major resource commitment

d. Decisions of significance to overall success, and major resource commitment

The simplest useful definition of business strategy would be: a. A sort of plan b. A conceptual construct relating to the juxtaposition of corporate richness versus the snakes and ladders of a kaleidoscopic environment c. How to win the corporate wars; price wars, technology races, develop killer applications d. The means by which organisations achieve their long-term objectives

d. The means by which organisations achieve their long-term objectives

Shareholder interests are commonly prioritised over those of other stakeholders because: a.unless the firm earns a rate of profit that covers its cost of capital it will not survive b. decision-making is simplified and excessive political wrangling avoided c. management teams that fail to maximise the profits of their companies will be replaced by those that do d. all of the above

d. all of the above

The contemporary phenomena of "winner-takes-all markets" and "standards battles" are a feature of which of the following: a Smartphone operating systems b. online auctions c.the market for digital media storage devices d. all of the above

d. all of the above

Corporate strategy and business strategy a. Are interchangeable terms b. Relate to achievement of overall long-term objectives, and multiple short-term objectives, respectively c. Can be seen as what top managers do and what lower level employees do, respectively d. concern the scope of the firm's activities and how the firm competes in its chosen areas respectively

d. concern the scope of the firm's activities and how the firm competes in its chosen areas respectively