Chapter 2 Questions

A

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 A.strategic leadership. B.intrapreneurship. C.Machiavellianism. D.individualism.

A

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? A.corporate strategy B.business strategy C.functional strategy D.divisional strategy E.A and B

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

Fortune Brands states they will "cut corporate overhead costs by $30 million a year." This is an example of a A.nonfinancial strategic objective. B.financial strategic objective. C.vision statement. D.mission statement.

B

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? A.We make products that run on wind energy. B.All nations around the globe should have access to a sustainable energy source. C.The company aims to make working fun and pleasurable for its employees. D.We provide energy efficient sources and services by investing in research and innovation

C

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? A.corporate strategy B.business strategy C.functional strategy D.grand strategy E.divisional strategy

D

Handy Pro, Inc. is a company that manufactures electric tools like drills, screwdrivers, and saws. Which of the following best illustrates a product-oriented vision for Handy Pro? A.to make people's lives simple and easy B.to allow everyone to have the luxury of electric tool technology C.to help people save time and energy spent using manual tools D.to be the pioneering manufacturer of electric tools

D

In the top-down strategic planning approach, all strategic intelligence and decision- making responsibilities rest primarily on the A.functional managers. B.general manager. C.external stakeholders. D.chief executive officer

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

B

Organizational 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 E.B and C

E

Strategic commitments are actions that are A.Inexpensive. B.short-term oriented. C.easy to reverse. D.easy to imitate. E.long-term oriented

E

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 easy to reverse. D.costly, short-term oriented, and difficult to reverse. E.costly, long-term oriented, and difficult to reverse.

B

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. A.corporate partner B.strategic business unit C.branch office D.house brand manufacturer

C

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? A.business strategy B.functional strategy C.corporate strategy D.divisional strategy

B

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? A.by making the user experience of the mobile Internet complex and fun B.by making the user experience of the mobile Internet easy and fun C.by making the mobile Internet an efficient tool for researchers D.by convincing employees to make the product more accessible E. employees to work with a purpose

C

The _____ is a conceptual framework that views organizational outcomes—strategic choices and performance levels—as reflections of the values of the members of the top management team, who interpret situations through the lens of their unique perspectives. A.two-factor theory B.expectancy theory C.upper-echelons theory D.value orientation theory

B

What is strategic leadership? A.the ability to delegate authority to create an effective strategic management process B.the executives' use of power and influence to direct the activities of others when pursuing an organization's goals C.the ability to inspire managers and other employees to create the best product possible D.the executives' use of power and influence to inspire workers to take responsibility for the final product

C

Which of the following is a top-down approach to the development of strategy that involves asking "what if" questions to anticipate plausible futures? A.top-down strategic planning B.bottom-up strategic thinking C.scenario planning D.reverse mentoring

A

Which of the following is an assumption that top-down strategic planning rests on? A.We can predict the future from the past. B.Time cannot be compressed at will. C.Decisions made in the past do not affect our future. D.Change is constant.

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.

D

.Vision statements are used to create a better understanding of the organization's overall purpose and direction.Vision statements A.are very specific. B.provide specific objectives. C.set organizational structure. D.evoke powerful and compelling mental images.

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

C

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.

A

According to the Level-5 leadership pyramid, a manager at Level 3 has acquired the ability to A.organize resources effectively to accomplish predetermined goals. B.build enduring greatness into the organizations he or she leads. C.identify the vision and the mission of the company. D.justify unethical activities as legal and ethical.

E

According to the Level-5 leadership pyramid, a manager turns into an executive who is capable of building lasting greatness into the organization through a combination of willpower and humility when he or she reaches A.Level 4. B.Level 3. C.Level 2. D.Level 1. E.Level 5

C

An intended strategy is best described as A.a combination of its top-down strategic intentions and bottom- up emergent strategy. B.any unplanned strategic initiative undertaken by mid-level employees of their own volition. C.the outcome of a rational and structured, top-down strategic plan. D.a strategy developed at the lower levels of management to tackle unpredictable events.

E

Corporate executives at LikeReal, 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 A.implementation strategy. B.corporate strategy. C.functional strategy. D.division strategy. E.business strategy.

C

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? A.Ethan is currently a team lead in the company. B.Ethan shows no signs of being a good leader. C.Ethan is a top management executive in the company. D.Ethan has just started his career as a member of a team in the company.

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 employees by significantly increasing profit.

D

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. A.Level 5 B.Level 4 C.Level 3 D.Level 2 E.Level 1

C

Lower-level employees focus mainly on _____ when a firm is using top-down or scenario planning as an approach to the strategic management process. A.strategy formulation B.strategy analysis C.strategy implementation D.strategy initiation

C

Organizational values help individuals make choices that are A.legal but unethical. B.both illegal and effective. C.both ethical and effective in advancing a company's goals. D.ethical but ineffective in achieving long-term success.

D

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 visions? A.GH Medicines' vision is more product-oriented than the vision of Pioneer Pharma. B.Pioneer Pharma is more likely to have a positive relationship between its vision and firm performance than GH Medicines. C.Pioneer Pharma's vision is more long-term and futuristic than GH Medicines' vision. D.GH Medicines will be more flexible than Pioneer Pharma when adapting to changing environments.

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 E.All of the above

E

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. A. to achieve human sustainability while having fun doing it B. to provide a high-quality product that has environmental sustainability C. to appeal to the whole person at work and at home D. to make the world's young generation's daily habits more inspiring and entertaining E. to make the world's daily habits more inspiring and entertaining

D

The critics of top-down strategic planning and scenario planning argue that A.the strategies developed through these approaches are primarily based on an inspirational vision and not on hard data. B.these approaches do not believe that we can predict the future from the past. C.the development of strategies through these approaches is highly dependent on experience of front-line employees. D.these approaches do not allow for the necessary strategic thinking.

A

The first step in the strategic management process 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. E.A and B

B

The management team at Clear Solutions, Inc. decided to build a branch office in Memphis, Tennessee. Which of the following terms correctly describes this action? A.strategy implementation B.strategy formulation C.execution of strategy D.business strategy E.atrategy action

E

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 A.voluntary responsibilities. B.realized strategy. C.core decisions. D.strategic decisions. E.core values.

A

The production department at Coral Cements that is a subsidiary of the large conglomerate Five East Corp. has decided to adopt the FIFO (first in, first out) method of inventory to dispatch its cement bags. Which of the following strategies does this scenario best illustrate? A.functional strategy B.corporate strategy C.master strategy D.business strategy

E

To be effective, firms need to A.back up their visions with mission statement 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 E.back up their visions with strategic commitments that are costly and difficult to reverse

C

To implement specific business strategies, general managers of strategic business units rely on A.external stakeholders. B.corporate executives. C.functional managers. D.strategic leaders E.employees.

C

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? A.Help us help you find a home. B.One day, everyone in this nation will have a home to protect themselves. C.We help the homeless gain and sustain financial independence by providing employment opportunities. D.Turn this not-for-profit organization into a for-profit organization so that the stakeholders are benefited.

A

Unrealized strategy is when parts of a firm's intended strategy is A.nonfunctional due to unexpected events. B.not revealed to the lower-level employees. C.implemented and controlled by front-line employees. D.planned to tackle some unforeseen events.

C

Visionary companies are able to outperform their competitors because A.their vision statements are more product-oriented. B.their visions are exclusively financial. C.they provide more aspirational visions. D.they isolate internal stakeholders in defining their visions.

B

When do employees fail to adopt the organizational values of a firm? A.when the internal stakeholders of the firm are involved in designing the values B.when the top managers in the firm are merely paying lip service to the firm's stated values C.when the strategic leaders in the firm propagate and exhibit the same values D.when the organizational structure, such as its strategic decision making, is aligned with its values

D

Which of the following best describes a Level 5 manager in the Level- 5 leadership pyramid? A.Connie is an employee who just started her career at DK Inc.; she has already been appreciated for her knowledge and skills in the new company. B.Dmitri is an employee at Infinite Circle Inc.; he has helped his team achieve their targets by contributing to the team's efforts. C.Luigi is part of the marketing team at RT Corp.; he has been given the charge of managing a team of three, so he will be promoted to a manager's position next month. D.Asoka is the CEO of Green Machines Inc.; he has helped his company in gaining and sustaining a competitive advantage through ethical decision making.

C

Which of the following examples reflects the strongest vision? A.At Fuentes Electronics, many employees get paid well but do not feel their work is important. B.At Fuentes Electronics, most employees are motivated to make the best microwave ovens on the market. C.At Fuentes Electronics, all employees want to create a better microwave oven than their closest competitor. D.At Fuentes Electronics, some employees do not understand the main goal of the company. E.At Fuentes Electronics, few employees do not understand the main goal of the company.

A

Which of the following functions do the general managers in strategic business units primarily perform? A.design generic business strategies based on guidelines received from corporate headquarters B.set overarching strategic objectives to unify the entire conglomerate under one mission C.take responsibility for decisions and actions within a single functional area D.allocate scarce resources among different business divisions

B

Which of the following is an accurate description of a Level 1 manager? A.an individual who works effectively with others to achieve synergies and team objectives B.a highly capable individual who makes productive contributions through motivation, talent, knowledge, and skills C.an individual who "does things right," is an effective team player, and organizes resources effectively to achieve predetermined goals D.an individual who is an effective strategic leader that builds enduring greatness into the organizations he or she leads

A

Which of the following is an example of a product-oriented vision statement? A.Andrea, Ltd. wants to be the best manufacturer of picture frames in the industry. B.Andrea, Ltd. wants to always satisfy the consumers who purchase picture frames. C.Andrea, Ltd. wants to provide the best benefits for employees in the picture-frame industry. D.Andrea, Ltd. wants to be the best manufacturer of picture frames in the company. E.Andrea, Ltd. wants to adapt their picture frames to the changing demands of consumers.

B

Which of the following is an example of an organizational value? A.Burtell Oil, Inc. lowers gas prices to gain an advantage over their closest competitor. B.Burtell Oil, Inc. increases the inspection of pipelines above the legal requirement to prevent oil spills. C.Burtell Oil, Inc. finances research for finding oil deposits within the United States. D.Burtell Oil, Inc. launches an ad campaign that promotes the company as being environmentally friendly.

E

Which of the following is an important characteristic of a leader? A.goal-oriented B.satisfied with the status quo C.proactive. D.focused on past performance E. A and C

B

Which of the following statements about product-oriented visions is true? A.They allow companies to effectively adapt to changing environments. B.They tend to force managers to take a myopic view of the landscape. C.They define a business in terms of providing solutions to customers. D.They allow firms to take a need-based approach to their goals.

C

Which of the following statements is true of customer-oriented visions? A.Customer-oriented visions identify how a customer need will be met. B.Customer-oriented visions reduce a company's ability to adapt to a changing environment.. C.Customer-oriented vision statements are not the same as listening to your customer D.Customer-oriented visions define a business in terms of goods or services provided.

D

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. A.corporate B.functional C.divisional D.business

E

Who among the following is responsible for making business strategies in a large conglomerate? A.the board of directors at the headquarters B.the shareholder of the company C.the lower-level employees in the company D.the creditors that lend loans to the company E.the general managers of individual business units

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.

A

_____ is best described as a strategy process in which organizational structure and systems allow bottom-up strategic initiatives to emerge and be evaluated and coordinated by top management. A.Planned emergence B.Scenario planning C.Top-down strategic planning D.Reverse engineering