Chapter 2 Quiz

To be effective, firms must implement their mission statements in strategic actions. The decision that Boeing made to develop the 787 Dreamliner is an example of what? A. A costly and long-term strategic commitment B. An attempt to win U.S. military contracts C. The results of an emergent strategy D. A customer-oriented mission statement

A costly and long-term strategic commitment

A company's vision primarily states: A) What the company wants to accomplish ultimately B) How the company plans to compete in its industry C) How the company plans to accomplish its goals D) What the company actually does to generate revenues

A) What the company wants to accomplish ultimately

The strategic management process follows which strategy framework? A. AFI; Analyze-Formulate-Implement B. AFE; Analyze-Formulate-Execute C. API; Analyze-Plan-Implement D. APE; Analyze-Plan-Execute

AFI; Analyze-Formulate-Implement

Japan Railways diversifying into bottled water is an example of turning a problem into a business opportunity. What type of strategy process does this represent? A. Top-down strategic planning B. An emergent strategy C. An unrealized strategy D. Scenario planning

An emergent strategy

Animals Doll Company has manufactured and sold children's dolls for 25 years. In order to keep costs low, it sources its materials from China. An employee in one of its retail stores has noticed that there is increasing concern regarding the potential toxicity of the materials in the dolls. In response, she researched and found a supplier that provides organic, non-toxic cloth and filling. She has taken this information to her manager and has suggested that the company consider producing dolls with these materials. This is an example of: A. A rational planning approach to strategy. B. An emergent strategy process. C. A good use of scenario planning. D. A new dominant action plan.

An emergent strategy process.

Planned emergence in strategy-making is when: A. An organization plans to emerge into a new market using current initiatives. B. An organization has a succession plan when the current CEO is preparing to retire. C. An organization communicates its strategy to the lower levels during a planned event. D. An organization allows bottom-up initiatives to emerge and be considered by the top.

An organization allows bottom-up initiatives to emerge and be considered by the top.

As revealed in the Teach For America case, teacher effectiveness improves if their course objectives do what? A. Follow the standardized tests B. Are creative and repetitive in nature C. Focus on material in the course D. Are student-achievement oriented

Are student-achievement oriented

Which of the following statements is true of customer-oriented visions? A) They tend to force managers to take a myopic view of the business environment. B) They define a business in terms of providing solutions to people's needs. C) They state an organization's goals in terms of a good or service provided to customers. D) They are inflexible with regard to adapting to changing environments.

B) They define a business in terms of providing solutions to people's needs.

As the chief executive officer (CEO) of Yahoo, Marissa Mayer declared Yahoo's vision to be "to make the world's daily habits more inspiring and entertaining." She wants to inspire Yahoo's employees and get its customers excited again. Which of the following approaches to the development of strategy does Yahoo best illustrate? A) Realized strategic planning B) Top-down strategic planning C) Bottom-up strategic approach D) Emergent strategic planing

B) Top-down strategic planning

Product-oriented vision statements provide managers with A. Employee goals B. Service goals C. Strategic flexibility D. Customer solutions

B. Service goals

Which of the following actions of an automobile firm will be considered as a strategic commitment? A. The firm launching an existing model of a car in red as a limited edition for six months B. The firm investing eight years and $4 billion to develop a range of hybrid cars with which it will compete in the future C. The firm spending $100,000 on renting a manufacturing facility to meet the temporary demand for its cars D. The firm promoting its new model of coupe through a free Europe trip worth $15,000 to be won as an early bird offer

B. The firm investing eight years and $4 billion to develop a range of hybrid cars with which it will compete in the future

Which of the following statements is true of customer-oriented visions? A. They tend to force managers to take a myopic view of the business environment B. They define a business in terms of providing solutions to people's needs C. They are inflexible with regard to adapting to changing environments D. They state an organization's goals in terms of a good or service provided to customers

B. They define a business in terms of providing solutions to people's needs

As the CEO of Yahoo, Marissa Mayer declare Yahoo's vision to be "to make the world's daily habits more inspiring and entertaining". She wants to inspire Yahoo's employees and its customers excited again. Which of the following approaches to the development of strategy does Yahoo best illustrate? A. Bottom-up strategic approach B. Top-down strategic planning C. Emergent strategic planning D. Realized strategic planning

B. Top-down strategic planning

In order for managers to determine the vision, mission, and values for their organization, they should: A. Begin by asking "What is our competitive advantage?" B. Determine what strategic group they belong to first. C. Begin with the "end in mind." D. Seek employee feedback.

Begin with the "end in mind."

Applying a real options perspective to strategic decision making allows for: A. Breaking investment decisions into smaller, staged phases while obtaining new information about the project viability as it continues. B. Calculating the net present value of an investment and deciding whether or not to complete the project from the start. C. Starting a project with a realistic perspective that the organization will not be able to achieve competitive advantage with. D. Making sure that the project is customer-oriented as opposed to product-oriented.

Breaking investment decisions into smaller, staged phases while obtaining new information about the project viability as it continues.

In the 1980s, Japanese competitors brought better-quality chips to the market at lower cost, threatening Intel Corporation's position and strategic plan regarding the production of DRAM (dynamic random-access memory) chips. When the functional managers at Intel came up with the simple rule of producing whichever product delivered the higher margin, the front-line managers shifted Intel's production capacity away from the lower-margin DRAM business to the higher-margin semiconductor business. This ___________ emerged as a consequence of the firm's resource allocation process. A) Strategic alliance B) Intended strategy C) Bottom-up strategy D) Unrealized strategy

C) Bottom-up strategy

According to the upper-echelons theory: A) Strategic commitments made by upper-level managers are inexpensive and short-term B) top managers of a company should isolate themselves from the organizational values. C) organizational outcomes reflect the values of the top management team. D) strong strategic leadership is solely the result of learning.

C) organizational outcomes reflect the values of the top management team.

A company's vision primarily states A. How the company plans to accomplish its goals B. What the company actually does to generate revenues C. What the company wants to accomplish ultimately D. How the company plans to compete in its industry

C. What the company wants to accomplish ultimately

According to the Level-5 leadership pyramid, the Level 2 manager is a(n) A) Competent manager B) Effective leader C) Strategic leader D) Contributing team member

D) Contributing team member

_____ is best described as the behaviors and styles of executives that influence others to achieve an organization's vision and mission. A) Venture capitalism B) Machiavellianism C) Intrapreneurship D) Strategic leadership

D) Strategic leadership

If a company chooses to keep its vision customer-oriented rather than product-oriented, what will be its implication? A) The company will fail to establish a positive relationship between its vision statement and performance. B) The company will clearly define how it means to satisfy a customer need. C) The company will have a short-term, unidirectional focus. D) The company will tend to be more flexible when adapting to changing environments.

D) The company will tend to be more flexible when adapting to changing environments

Which of the following statements is true of the Level-5 leadership pyramid? - Each level of leadership builds upon the previous one in the pyramid. - Successful companies are led by Level-1 executives. - At Level 3, managers are capable of devising a vision and mission to guide the firm toward superior performance. - Once a manager moves to higher levels, he or she loses the qualities acquired in the previous levels to gain new ones.

Each level of leadership builds upon the previous one in the pyramid.

One concept behind linking RAP, decision making, and strategy is: A. How an organization uses its resources drives the decisions it makes, which can alter the strategy. B. Decision making is based on realized strategy, not the resources available. C. Firm resources and decision making do not affect intended strategy except in times of crisis. D. In line with the tenets of strategic planning on a five-year cycle.

How an organization uses its resources drives the decisions it makes, which can alter the strategy.

Organizational values help people make choices that are ethical and company-goal-oriented. These values answer which strategic management question? A. What do we want to accomplish as a firm? B. How do we accomplish our goals in the organization? C. What are we about as a firm relative to our competitors? D. What is the best way to compete in the marketplace?

How do we accomplish our goals in the organization?

Which of the following questions would a firm's business strategy ideally answer? - How should we compete? - Where should we compete? - Why should we compete? - How should we implement the functional strategy?

How should we compete?

McKesson, a $110 billion health care company, is provided as an example firm with clear and compelling organizational values. All of the following items are examples of living the values EXCEPT which one? A. The ethics and behavior models are the cornerstones of building the business. B. ICARE values are printed out on all their marketing materials for new customers. C. Employees worked long overtime hours to meet urgent needs during hurricane Katrina. D. The ICARE values serve as a framework for how to deal with their customers.

ICARE values are printed out on all their marketing materials for new customers.

Understanding the Resource Allocation Process (RAP) will have large effects on shaping a firm's realized strategy. Which of the following is an example of such an allocation of resources? A. Starbucks' launch of iced drinks B. Teach For America's mission statement C. Shell's prediction about future energy sources D. Intel's rule to "maximize margin-per-wafer-start"

Intel's rule to "maximize margin-per-wafer-start"

What is wrong with the following statement? "Intended strategies tend to be generated using a bottom-up approach." A. Intended strategies are generated through emergent ideas. B. Intended strategy is the final result of the AFI process. C. Intended strategies lose the unrealized strategies along the process. D. Intended strategies are generated using a top-down approach.

Intended strategies are generated using a top-down approach.

The strategy originally planned by senior management is known as: A. Purposed strategy B. Impact strategy C. Intended strategy D. Emergent strategy

Intended strategy

One of Henry Mintzberg's criticisms of the strategic planning process is that: A. It does not allow for strategic thinking. B. It rarely, if ever, gets implemented. C. It is too reliant on employee feedback. D. Managers do not like to use it.

It does not allow for strategic thinking.

A dominant strategic plan in the scenario planning tool is which of the following managerial options? A. It most accurately matches reality. B. It matches the intended strategy. C. It will be the only correct strategic plan. D. It will be the only correct competitive advantage plan.

It most accurately matches reality.

Strategic flexibility is achieved by: A. Managers developing a dominant plan and sticking to it. B. Managers responding when reality changes by activating alternate dominant plans. C. Ignoring feedback from the marketplace while creating new plans. D. Breaking the cycle of strategic planning-monitoring-responding.

Managers responding when reality changes by activating alternate dominant plans.

Which of the following groups is most likely to be considered a firm's internal stakeholder? - creditors - customers - alliance partners - board members

board members

In the 1980s, Japanese competitors brought better-quality chips to the market at lower cost, threatening Intel Corporation's position and strategic plan regarding the production of DRAM (dynamic random-access memory) chips. When the functional managers at Intel came up with the simple rule of producing whichever product delivered the higher margin, the front-line managers shifted Intel's production capacity away from the lower-margin DRAM business to the higher-margin semiconductor business. This _____ emerged as a consequence of the firm's resource allocation process. - unrealized strategy - strategic alliance - intended strategy - bottom-up strategy

bottom-up strategy

According to the Level-5 leadership pyramid, the Level 2 manager is a(n) - strategic leader. - competent manager. - contributing team member. - effective leader.

contributing team member.

The board of directors of Best Digital Inc., a company that has a large product mix, has decided to get actively involved in research and development for the next three financial years. Budget for each business unit under the company will be allocated from the headquarters in proportion to its previous performance. The board has also decided to liquidate those units that have failed to perform so far. Which of the following strategies does this scenario best illustrate? - functional strategy - business strategy - divisional strategy - corporate strategy

corporate strategy

Nucor Corporation is the largest steel company in the U.S., has been profitable for decades, and has never laid off an employee. Yet, Nucor has no written strategic plan, no written mission statement and no written objectives. What does this tell us? A. Nucor should have had written these down but they were fortunate because they had first-mover advantages. B. Nucor is a monopoly and therefore it is not important to have written plans, mission statements, or objectives. C. Not having a written strategic plan does not indicate a lack of strategy; it is the pattern of actions across the organization that is important. D. Not having a written strategic plan could make Nucor vulnerable in the future because it does not have a strong organizational culture.

Not having a written strategic plan does not indicate a lack of strategy; it is the pattern of actions across the organization that is important.

Bottom-up strategies can emerge as a consequence of the firm's RAP. What is the meaning of RAP? A. Realized Allowance Process B. Resource Allowance Program C. Resource Allocation Process D. Realized Allocation Program

Resource Allocation Process

In Strategy Highlight 2.3, what type of strategy is the store manager of Starbucks using to develop new drinks for the stores? A. She is using a rational planning approach to strategy. B. She is creating a dominant strategy plan. C. She is using scenario planning. D. She is using an emergent strategy process.

She is using an emergent strategy process.

_____ is best described as executives' use of power and influence to direct the activities of others when pursuing an organization's goals. - Intrapreneurship - Venture capitalism - Strategic leadership - Machiavellianism

Strategic leadership

The process that describes the method by which managers conceive of and implement a strategy that can lead to a sustainable competitive advantage is called what? A. Strategic process B. Strategic technology C. Strategic management D. Strategic planning

Strategic management

Strategic planning differs from scenario planning in that: A. Strategic planning is long-term planning; scenario planning is not. B. Strategic planning is bottom-up from the employees, and scenario planning is top-down from the CEO. C. Strategic planning is performed by many layers in the organization, while scenario planning is limited to top executives. D. Strategic planning assumes that future success can be predicted; scenario planning allows for more unforeseen events.

Strategic planning assumes that future success can be predicted; scenario planning allows for more unforeseen events.

Strategic thinking is different than strategic planning in that: A. Strategic thinking includes "soft" information and employee experience; strategic planning does not. B. Strategic thinking relies more on hard numbers than strategic planning. C. There really isn't that much that differentiates the two. D. Strategic thinking can create an illusion of control, while strategic planning avoids this.

Strategic thinking includes "soft" information and employee experience; strategic planning does not.

Any unplanned strategic initiative undertaken by mid-level employees of their own volition is a(n) ________________. A. dominant strategic plan B. developing strategy C. emergent strategy D. strategic initiative

emergent strategy

A set of values illustrates the firm's __________. A. choice of where to do business B. definition of what business is and why it does it C. ethical standards and norms D. positioning of what the business did in the past

ethical standards and norms

A firm's _____ is likely to fall by the wayside because of unpredictable events and turn into unrealized strategy. - recognized strategy - realized strategy - dominant strategy - intended strategy

intended strategy

Unrealized strategy is when a part of the firm's strategy ________________________. A. is discontinued due to unexpected events B. is evaluated because of expected events C. is eliminated due to expected events D. is incorporated due to unexpected events

is discontinued due to unexpected events

When an organization briefly describes what its business is about and why it does it, they have articulated a _______________. A. Values statement B. Mission statement C. Strategic plan D. Competitive advantage

mission statement

The fact that many organizations were caught off-guard by the recent economic downturn reflects that: A. It is impossible to prepare for future situations. B. There is a tendency to ignore negative outcomes when creating future scenarios. C. "What if" questions are actually not that useful. D. Managers usually wait until it is too late to implement strategic initiatives.

There is a tendency to ignore negative outcomes when creating future scenarios.

A real options perspective is similar to what corporate finance tool? A. Present volume B. Future value C. Net present value D. Current yield

net present value

Strategic initiatives describe the activities of firms when they explore and develop new products and processes, and new markets or new ventures. Where do strategic initiatives come from within the organization? A. They may be the result of top-down OR bottom-up processes. B. They only emerge using a bottom-up process. C. They only result from a top-down approach. D. None of these.

They may be the result of top-down OR bottom-up processes.

Many of the early U.S. railroad companies defined themselves as being in the railroad business instead of being in the transportation needs business. These companies used ______________. A. resource-based missions B. customer-oriented missions C. product-oriented missions D. responsive missions

product-oriented missions

The combination of intended and emergent strategies is called a(n) _______________. A. unrealized strategy B. realized strategy C. dominant strategy D. developing strategy

realized strategy

When managers envision different what-if scenarios to anticipate possible futures, the approach that is used is called: A. Strategic planning B. Strategy as planned emergence C. Strategy implantation D. Scenario planning

scenario planning

Employees at Google spend one day a week working on their own ideas. This is an example of a ________________. A. planned initiative B. strategic initiative C. product-oriented strategy D. consumer-oriented strategy

strategic initiative

Firms that are willing to pursue exploring and developing new products and processes, and thus new markets or new ventures, by definition use a(n) _________________. A. emergent strategy B. developing strategy C. dominant strategic plan D. strategic initiative

strategic initiative

Which of the following groups will not be considered a company's internal stakeholder? - suppliers - board members - shareholders - managers

suppliers

Questions such as "What resources do we need if this happens?" and "How can we shape our anticipated future environment?" are performed under what stage of the AFI framework? A. The formulation stage B. The forecasting stage C. The installation stage D. The iteration stage

the formulation stage

Which of the following statements related to a firm's stakeholders is not true? - While external stakeholders are those who make contributions toward the firm, internal stakeholders are those who reap all the benefits. - If internal or external stakeholders withhold participation in the firm's exchange relationships, it can have severe negative performance implications. - A firm's stakeholders include organizations and groups along with individuals who can affect or be affected by the firm's actions. - Effective stakeholder management is an example of how managers can act to enhance a firm's competitive advantage.

While external stakeholders are those who make contributions toward the firm, internal stakeholders are those who reap all the benefits.

Managers may use _____ perspective to decision making where a large investment decision is broken down into a set of smaller decisions that are staged sequentially over time to obtain more information. A. a real options B. a realized strategy C. a net present value D. scenario planning

a real options

Real options is a business decision and is seen as _______________. A. a right and an obligation B. a right and not an obligation C. risky and mandatory D. a requirement for doing business

a right and not an obligation

The 2001 collapse of Enron, resulting in one of the biggest bankruptcies in U.S. history, demonstrates that: A. An organization may have a mission statement promoting ethical behavior, but it must have strong organizational values to guide the behavior of employees. B. Employees observe managerial behavior and tend to follow it. C. Having strong ethical values inside an organization is important for long-term success. D. All of these.

all of these

Based on external and internal analyses, top-level executives design a rational and structured strategic plan that is called ____________. A. scenario planning B. an emergent strategy C. an intended strategy D. an unrealized strategy

an intended strategy

The ethical standards and norms that should govern the behavior of the individuals within the firm are called what? A. Values B. The mission C. The strategic plan D. Competitive advantage

values

A mission describes ____________. A. what a business will do in the future B. what a business actually does and why it does it C. what the norms are of the business D. what the business has done historically

what a business actually does and why it does it

In scenario planning, what is the key question to ask to begin to generate different scenarios? A. What's happening now? B. Where are we? C. What if? D. Where are we going?

what if

Which one of the following best describes a product-oriented mission? A. It defines the means of how a customer need will be met. B. It is the best type of mission for most firms to have. C. It has a higher likelihood of remaining relevant in the long-term. D. It defines a business in terms of a good or service provided.

It defines a business in terms of a good or service provided.

It has been found that visionary companies outperform other companies by more than 1,400 percent. One reason for this is: A. Their stated missions encapsulate their aspirations. B. Their employees are better trained. C. They are focused on profits. D. They are typically start-ups and are thus more highly motivated.

Their stated missions encapsulate their aspirations.

Why are black swan events such as accounting scandals and the global financial crisis perceived as caused by cheap credit and subprime mortgages offered by financial institutions, bad for business? - They allow companies to gain a competitive advantage unfairly. - They erode the implicit trust between the corporate world and society. - They contribute to competitive parity, which hinders economic growth. - They foster a false sense of prosperity, which results in economic depression.

They erode the implicit trust between the corporate world and society.

The metaphor of a black swan best applies to - small businesses that become successful enough to raise capital through initial public offering. - events that are considered highly unexpected and highly impactful when they do occur. - highly profitable business units in low growth markets that are to be sustained solely for revenue generation. - low profitable strategic business units within a large enterprise that are best divested or liquidated.

events that are considered highly unexpected and highly impactful when they do occur.

Which of the following is a philanthropic responsibility of a firm? - not infringing on other firms' patents - providing products at appropriate prices - exhibiting corporate citizenship - obeying government regulations

exhibiting corporate citizenship

Widgets Inc. is a vendor who supplies machine parts to an appliance manufacturing company. In return, Widgets Inc. relies on the company for its revenue and is affected by any decisions taken by the company. In this scenario, Widgets Inc. is a(n) _____ for the appliance manufacturing company. - external stakeholder - focus group - representative sample - internal stakeholder

external stakeholder

Which of the following is a stakeholder attribute that managers should consider at every step in a stakeholder impact analysis? - legitimacy - supremacy - literacy - solvency

legitimacy

Johnson Homes was a real estate development firm with $25 million in available capital. The owner's mission was to "develop the highest-quality housing communities that deliver the ultimate lifestyle." His goal was to build high-end homes on a lake and develop biking trails and other recreational offerings. In order to accomplish this, he needed to pay 15 million dollars for a 10-year project to put in new water facilities, pave new entry and exit roads, and hire consultants to help him navigate state, city, and county regulations. Four years into the project, the owner did not hire the consultants and had only invested 25 percent of the required capital to build the water facility. In addition, he began to travel frequently and did not listen to his employees' complaints. Not surprisingly, the company went bankrupt. Which of these statements is most likely to be true? A. The company failed because it did not have sufficient financial resources. B. The company failed because it was too diversified. C. The company failed because it was not backed up with strategic commitment. D. The company failed because it was not a visionary company.

The company failed because it was not backed up with strategic commitment.

Better World Books (BWB) wanted to fight illiteracy by donating 50 percent of its revenues, as stated in its mission. The fact that it had to later reduce the donation amount to between 7-10 percent is a reflection of the fact that: A. The declared mission of an organization can sometimes negatively impact its financial performance. B. The declared mission of an organization is often too complicated to execute. C. The declared mission of an organization needs to be product-oriented. D. The declared mission of an organization should not include financial measurements.

The declared mission of an organization can sometimes negatively impact its financial performance.

An organization's ____________ describes what the organization actually does—the products and services it plans to provide, and the markets in which it will compete. A) Mission B) Vision C) Code of conduct D) Promissory note

A) Mission

As noted in Strategy Highlight 2.1, the small Japanese company with the electric rice cooker became the highly successful firm Sony. However, more recently Sony has not performed very well. To what can this be attributed? A. Large competitive pressures in their strategic group has cost Sony much market share and thus revenue opportunity. B. A failure to set new stretch goals after accomplishing many of their older ones. C. The strategic planning process was highly flawed. D. The recent economic downturn was too much for the firm to adjust to.

A failure to set new stretch goals after accomplishing many of their older ones.

Teach For America (TFA) has an inspiring mission, which is to eliminate educational inequality in the U.S. What is a major benefit discussed that TFA garnered by effectively using this mission? A. An extensive network to use for job openings at the end of two years of service. B. Significant supplemental income for the TFA workers while in the field. C. Scholarships for graduate programs at the end of the two years. D. A large number of applicants driving a highly selective group in the teaching jobs.

A large number of applicants driving a highly selective group in the teaching jobs.

The board of directors of Best Digital Inc., a company that has a large product mix, has decided to get actively involved in research and development for the next three financial years. Budget for each business unit under the company will be allocated from the headquarters in proportion to its previous performance. The board has also decided to liquidate those units that have failed to perform so far. Which of the following strategies does this scenario best illustrate? A) Corporate strategy B) Functional strategy C) Business strategy D) Divisional strategy

A) Corporate strategy

Which of the following statements is true of the Level-5 leadership pyramid? A) Each level of leadership builds upon the previous one in the pyramid. B) Once a manager moves to higher levels, he or she loses the qualities acquired in the previous levels to gain new ones. C) Successful companies are led by Level-1 executives. D) At Level 3, managers are capable of devising a vision and mission to guide the firm toward superior performance.

A) Each level of leadership builds upon the previous one in the pyramid.

Which of the following statements does the upper-echelons theory support? A) Executives interpret situations through the lens of their unique perspectives, shaped by personal circumstances, values, and experiences. B) Strong leadership is solely the result of innate abilities and not learning. C) The leadership actions of executives are independent of their characteristics like age, education, and career experiences. D) Organizational outcomes including strategic choices and performance levels reflect the values of external stakeholders.

A) Executives interpret situations through the lens of their unique perspectives, shaped by personal circumstances, values, and experiences.

Which of the following questions does the values espoused by a company primarily answer? A) How do we accomplish our goals? B) What is the company's customer lifetime value? C) What is the value added to a good or service at each step in the production? D) Which of the value chain activities are primary?

A) How do we accomplish our goals?

Which of the following questions would a firm's business strategy ideally answer? A) How to compete? B) How to implement the functional strategy? C) Why should we compete? D) Where to compete?

A) How to compete?

Which of the following statements is true of the Level-5 leadership pyramid? A. Each level of leadership builds upon the previous one in the pyramid B. Successful companies are led by Level 1 executives C. At Level 3, managers are capable of devising a vision and mission to guide the firm toward superior performance D. Once a manager moves to higher levels, they lose the qualities acquired in the previous levels to gain new ones

A. Each level of leadership builds upon the previous one in the pyramid

Which of the following questions does the values espoused by a company primarily answer? A. How do we accomplish our goals? B. Which of the value chain activities are primary? C. What is the value added to a good or service at each step in the production? D. What is the company's customer lifetime value?

A. How do we accomplish our goals?

Which of the following questions would a firm's business strategy ideally answer? A. How to compete? B. Where to compete? C. Why should we compete? D. How to implement the functional strategy?

A. How to compete?

An organization's __________ describes what the organization does-the products and services it plans to provide, and the markets in which it will compete. A. Mission B. Vision C. Promissory note D. Code of conduct

A. Mission

If a company chooses to keep its vision customer-oriented rather than product-oriented, what will be its implication? A. The company will tend to be more flexible when adapting to changing environments B. The company will clearly define how it means to satisfy a customer need C. The company will fail to establish a positive relationship between its vision statements and performance D. The company will have a short-term, unidirectional focus

A. The company will tend to be more flexible when adapting to changing environments

Teach For America (TFA) recruits recent college graduates and professionals to teach for a two-year commitment in socially and economically disadvantaged communities. What is a major component of their recruiting campaign for applicants? A. An extensive network to use for job openings at the end of two years of service. B. An inspiring mission to eliminate educational inequality. C. Significant supplemental income for the TFA workers while in the field. D. Scholarships for graduate programs at the end of the two years.

An inspiring mission to eliminate educational inequality.

A firm's _____ is likely to fall by the wayside because of unpredictable events and turn into unrealized strategy. A) Realized strategy B) Intended strategy C) Dominant strategy D) Recognized strategy

B) Intended strategy

Larry has been recently promoted to the position of a team lead at an insurance company. This promotion was based on his boss's assessment that Larry is capable of conveying the company's vision and mission to groups. As a result, he can guide groups to superior performance. From this scenario, we can say that Larry is currently at _____ of the Level-5 leadership pyramid. A) Level 5 B) Level 4 C) Level 3 D) Level 1

B) Level 4

According to the upper-echelons theory, A. Top managers of a company should isolate themselves from the organizational values B. Organizational outcomes reflect the values of the top management team C. Strong strategic leadership is solely the result of learning D. Strategic commitments made by upper-level managers are inexpensive and short-term

B. Organizational outcomes reflect the values of the top management team

Product-oriented vision statements provide managers with A) Strategic flexibility B) Customer solutions C) Service goals D) Employee goals

C) Service goals

Evaluating the data collected from environmental analysis, the corporate executives of F&S Pharma Inc. realized that it was the right time to expand the business. The company's vision was accordingly adjusted from "To Be the Best in the Pharmaceutical Industry" to "To Make Good Health Accessible to Everyone around the Globe." To support the new vision, the executives decided that the company would first enter the Asian market where its growth potential would be huge. To further support these decisions, the general managers of different SBUs and the functional managers formulated their own strategies. Which of the following approaches to the development of strategy does this best illustrate? A) Reverse mentoring B) Scenario planning C) Top-down strategic planning D) Bottom-up strategic planning

C) Top-down strategic planning

Which of the following statements accurately brings out the difference between an organization's vision and mission? A) Mission is the organization's aspirations and vision is about how these aspirations can be made true. B) Vision is short-term: oriented and related to the organization's present, whereas the mission is futuristic. C) Vision defines what the organization wants to accomplish ultimately, whereas the mission defines the means by which vision is accomplished. D) Vision is valid at the functional level of the organization, whereas mission covers the entire organization.

C) Vision defines what the organization wants to accomplish ultimately, whereas the mission defines the means by which vision is accomplished.

Which of the following actions of an automobile firm will be considered as a strategic commitment? A) the firm promoting its new model of coupe through a free Europe trip worth $15,000 to be won as an early bird offer B) the firm spending $100,000 on renting a manufacturing facility to meet the temporary demand for its cars C) the firm investing eight years and $4 billion to develop a range of hybrid cars with which it will compete in the future D) the firm launching an existing model of a car in red as a limited edition for six months

C) the firm investing eight years and $4 billion to develop a range of hybrid cars with which it will compete in the future

According to the Level-5 leadership pyramid, the Level 2 manager is a(n) A. Strategic leader B. Competent manager C. Contributing team member D. Effective leader

C. Contributing team member

Larry has been recently promoted to the position of a team lead at an insurance company. This promotion was based on his boss's assessment that Larry is capable of conveying the company's vision and mission to groups. As a result, he can guide groups to superior performance. From this scenario, we can say that Larry is currently at ______ of the Level-5 leadership pyramid. A. Level 1 B. Level 3 C. Level 4 D. Level 5

C. Level 4

______ is best described as the behaviors and styles of executives that influence others to achieve an organization's vision and mission. A. Intrapreneurship B. Venture capitalism C. Strategic leadership D. Machiavellianism

C. Strategic leadership

In the 1980s, Japanese competitors brought better-quality chips to the market at lower cost, threatening Intel Corporation's position and strategic plan regarding the production of DRAM (dynamic random-access memory) chips. When the functional managers at Intel came up with the simple rule of producing whichever product delivered the higher margin, the front-line managers shifted Intel's production capacity away from the lower-margin DRAM business to the higher-margin semiconductor business. This ______ emerged as a consequence of the firm's resource allocation process. A. Unrealized strategy B. Strategic alliance C. Intended strategy D. Bottom-up strategy

D. Bottom-up strategy

The board of directors of Best Digital Inc., a company that has a large product mix, has decided to get actively involved in research and development for the next three financial years. Budget for each business unit under the company will be allocated from the headquarters in proportion to its previous performance. The board has also decided to liquidate those units that have failed to perform so far. Which of the following strategies does this scenario best illustrate? A. Functional strategy B. Business strategy C. Divisional strategy D. Corporate strategy

D. Corporate strategy

Which of the following statements does the upper-echelons theory support? A. Organizational outcomes including strategic choices and performance levels reflect the values of external stakeholders B. The leadership actions of executives are independent of their characteristics like age, education, and career experiences C. Strong leadership is solely the result of innate abilities and not learning D. Executives interpret situations through the lens of their unique perspectives, shaped by personal circumstances, values, and experiences

D. Executives interpret situations through the lens of their unique perspectives, shaped by personal circumstances, values, and experiences

A firm's ______ is likely to fall by the wayside because of unpredictable events and turn into unrealized strategy. A. Recognized strategy B. Realized strategy C. Dominant strategy D. Intended strategy

D. Intended strategy

Evaluating the data collected from environmental analysis, the corporate executives of F&S Pharma Inc. realized that it was the right time to expand the business. The company's vision was accordingly adjusted from "To Be the Best in the Pharmaceutical Industry" to "To Make Good Health Accessible to Everyone around the Globe". To support the new vision, the executives decided that the company would first enter the Asian market where its growth potential would be huge. To further support these decisions, the general managers of different SBUs and the functional managers formulated their own strategies. Which of the following approaches to the development of strategy does this best illustrate? A. Scenario planning B. Bottom-up strategic approach C. Reverse mentoring D. Top-down strategic planning

D. Top-down strategic planning

Which of the following statements accurately brings out the difference between an organization's vision and mission? A. Mission is the organization's aspirations and vision is about how these aspirations can be made true B. Vision is short-term: oriented and related to the organization's present, whereas the mission is futuristic C. Vision is valid at the functional level of the organization, whereas mission covers the entire organization D. Vision defines what the organization wants to accomplish ultimately, whereas the mission defines the means by which vision is accomplished

D. Vision defines what the organization wants to accomplish ultimately, whereas the mission defines the means by which vision is accomplished

When Disney says its mission is "to make people happy," they translate that mission into which of the following actions as discussed in the text? A. Employees are screened for their acting ability at all levels of the organization. B. They bought Pixar to make more movies that audiences would enjoy. C. They adjust their ticket prices seasonally to meet customer demand. D. Employees are cast members to help the customers enjoy the "show" throughout the park.

Employees are cast members to help the customers enjoy the "show" throughout the park.

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.

Employees in visionary organizations find meaning in their work and are motivated.

Which of the following statements does the upper-echelons theory support? - Organizational outcomes including strategic choices and performance levels reflect the values of external stakeholders. - The leadership actions of executives are independent of their characteristics like age, education, and career experiences. - Strong leadership is solely the result of innate abilities and not learning. - Executives interpret situations through the lens of their unique perspectives, shaped by personal circumstances, values, and experiences.

Executives interpret situations through the lens of their unique perspectives, shaped by personal circumstances, values, and experiences.

Google's decision in 2010 to pull its servers out of mainland China and operate out of Hong Kong was a response to what? A. A drive to increase profits with a broader footprint in Asia. B. A request from the Chinese government to leave the country. C. A move to cut costs due to intense competition with the local search firm Baidu. D. Google's decision to stop using self-censoring, as required by the Chinese government to stay operating in mainland China.

Google's decision to stop using self-censoring, as required by the Chinese government to stay operating in mainland China.

It is important to separate having a customer-oriented mission from listening to your customers. If Henry Ford had merely listened to his customers of 100 years ago what would he have done? A. He would have teamed up with the Wright brothers in making bicycles. B. He would have built more comfortable passenger cars for trains. C. He would have built a better horse and buggy. D. He would have invested in steam ships for riding the Ohio and Mississippi rivers.

He would have built a better horse and buggy.

Shell Oil is provided as an example of a firm effectively using scenario planning. In the 1960s, they prepared for a strong OPEC and therefore rising oil prices. What are they now predicting about future energy needs? A. Energy needs will continue to grow, spurred by BRIC countries. B. In 2025, that 20 percent of our energy will be generated from renewable technologies. C. That the Middle East leadership will fracture and oil prices will drop. D. In 2025, that 50 percent of our energy will be generated from renewable technologies.

In 2025, that 20 percent of our energy will be generated from renewable technologies.

Which of the following is NOT true concerning a customer-oriented mission? A. It defines the means of how a customer need will be met. B. It has more flexibility than a product-oriented mission. C. It has a higher likelihood of remaining relevant in the long-term. D. Organizations that have customer-oriented missions are more likely to be successful.

It defines the means of how a customer need will be met.

Larry has been recently promoted to the position of a team lead at an insurance company. This promotion was based on his boss's assessment that Larry is capable of conveying the company's vision and mission to groups. As a result, he can guide groups to superior performance. From this scenario, we can say that Larry is currently at _____ of the Level-5 leadership pyramid. - Level 1 - Level 3 - Level 4 - Level 5

Level 4

If the early U.S. railroad companies defined themselves as being in the transportation needs business, which is more customer-oriented, they might have successfully moved into what product/service before any other firm? A. Commercial aviation (such as Delta and United) B. Modern shipping and logistics (such as FedEx and UPS) C. International cargo containers on large ocean ships D. Fuel efficient automobiles (such as Toyota and Ford)

Modern shipping and logistics (such as FedEx and UPS)

When it comes to a firm's vision, mission, and values, it can be said that: A. Once instituted in the organization, the vision, mission, and values of a firm should be left alone, regardless of whether the company is successful or not. B. New firms have to create these by using a driving vision to shape their mission and values, and existing firms should fine-tune their mission and values and reaffirm their values periodically. C. New firms should modify their vision, mission, or values as they grow, but established firms should stick to what has worked in the past. D. Existing firms should regularly discard their vision and mission in a renewal process.

New firms have to create these by using a driving vision to shape their mission and values, and existing firms should fine-tune their mission and values and reaffirm their values periodically.

Mission statements can also be used to help refocus a firm on its main line of business. One example of this given in the text is: A. Ben & Jerry's expanding beyond ice cream into other food categories. B. Disney selling off its theme parks to focus on movies. C. Shell Canada selling off its chemicals and forestry businesses. D. Ford Motors moving into hybrid cars and SUVs.

Shell Canada selling off its chemicals and forestry businesses.

When strategizing for competitive advantage, managers rely on different approaches that can complement one other. Which one of the following is NOT an approach a firm may use? A. Strategic planning B. Strategy as planned emergence C. Strategy implantation D. Scenario planning

Strategy implantation

Chinese companies such as BYD and Lenovo made global leadership their mission. One of the tools they used to accomplish this position is what? A. Stretch goals B. Efficient goals C. Reach goals D. Enhanced goals

Stretch goals

In which of the following cases was a company put at a major competitive disadvantage? - Facebook hired Sheryl Sandberg because Mark Zuckerberg, Facebook's founder, lacked important business skills. - The Environmental Protection Agency (EPA) banned BP from any new contracts with the U.S. government. - Sam's Club decided to prescreen its customers via required membership to establish creditworthiness. - Strategy executives at UPS used scenario planning to identify issues critical to shaping the firm's future.

The Environmental Protection Agency (EPA) banned BP from any new contracts with the U.S. government.

As noted in Strategy Highlight 2.1, the small Japanese company with the electric rice cooker faced very long odds in getting a license from Bell Labs for using their transistor. The end result of the effort to get the license was what? A. The Japanese firm got the license but was not able to produce the desired radio. B. The Japanese firm got the license and used it successfully in their rice cooker. C. The Japanese firm introduced the first pocket-sized radio, but the market was not ready for it and sales were weak. D. The Japanese firm introduced the world's first pocket-sized radio to great market success.

The Japanese firm introduced the world's first pocket-sized radio to great market success.

The 2001 collapse of Enron resulted in the loss of jobs for over 20,000 employees. Arthur Anderson was also impacted by the Enron collapse and 30,000 employees lost their jobs. Why was Arthur Anderson so adversely affected by Enron's collapse? A. Enron was a major client and Arthur Anderson could not survive the business downturn from the bankruptcy. B. The firm was an accomplice in the accounting scandal at Enron. C. Arthur Anderson was the target of a hostile takeover directly after Enron's collapse. D. The accounting firm decided to get out of the entire energy sector as a result of the collapse of Enron.

The firm was an accomplice in the accounting scandal at Enron.

Intel is provided as an example of a firm that has continuously changed its mission statement, including most recently moving to a customer-focused mission. This is an indication of what? A. Missions are best left as they were originally crafted for the firm. B. Intel's mission likely created its superior performance over this period. C. Missions can be inspirational for both employees and customers. D. The mission was changed after Intel had already changed its business focus.

The mission was changed after Intel had already changed its business focus.

The analogy about building a new home is relevant to strategy because you use vision, mission, and values to begin with the end in mind. Strategic success must be created twice. Once by creating a clear mental picture of what the firm wants to accomplish and second ____________. A. by formulating and implementing a strategy to make the vision a reality B. by holding department meetings to communicate the vision C. to create a strong value system that will bind the company together in tough times D. by creating a blueprint for the organization to use in creating new mission statements

by formulating and implementing a strategy to make the vision a reality

According to the upper-echelons theory, - top managers of a company should isolate themselves from the organizational values. - organizational outcomes reflect the values of the top management team. - strong strategic leadership is solely the result of learning. - strategic commitments made by upper-level managers are inexpensive and short-term.

organizational outcomes reflect the values of the top management team.

A business statement defined in terms of a good or service provided is called a _______________. A. customized mission B. service-centered mission C. product-oriented mission D. customer-centered mission

product-oriented mission

Customer-oriented missions are defined as __________________. A. providing solutions to employee needs B. providing solutions to customer needs C. providing solutions to executive needs D. providing solutions to stockholder needs

providing solutions to customer needs

The annual net profit after taxes for RSL Corp., a multinational conglomerate, is $5.5 billion. As legal owners, which of the following stakeholder groups has the most legitimate claim on this profit? - managers - shareholders - local communities - government

shareholders

Strategic intent is considered to be forward-looking and future-oriented. It is most useful in situations where _______________. A. large firms are close competitors with others B. all the firms competing in a market are very similar C. small firms are wanting to compete against bigger, more established firms D. the dominant plan from a scenario planning process is identified

small firms are wanting to compete against bigger, more established firms

Within the context of strategic management it is important to understand that black swan events in the past have demonstrated that - stakeholders can affect or be affected by a firm's actions. - capitalism as an economic system is highly reliable. - companies can successfully integrate cost-leadership and differentiation strategies. - globalization has reduced the need for standardized corporate ethics.

stakeholders can affect or be affected by a firm's actions.

Staking out a desired leadership position that far exceeds a company's current resources and capabilities is called what? A. Strategic planning B. Strategic management C. Strategic intent D. Strategic process

strategic intent

Evaluating the data collected from environmental analysis, the corporate executives of F&S Pharma Inc. realized that it was the right time to expand the business. The company's vision was accordingly adjusted from "To Be the Best in the Pharmaceutical Industry" to "To Make Good Health Accessible to Everyone around the Globe." To support the new vision, the executives decided that the company would first enter the Asian market where its growth potential would be huge. To further support these decisions, the general managers of different SBUs and the functional managers formulated their own strategies. Which of the following approaches to the development of strategy does this best illustrate? - scenario planning - bottom-up strategic approach - reverse mentoring - top-down strategic planning

top-down strategic planning

Mission statements have been shown to be associated with firm performance. In many cases, organizations with sound missions are more successful; however, what is far less clear is ________. A. that customer-oriented missions provide more flexibility than product-oriented ones B. whether this mission actually causes a firm to have a competitive advantage C. whether missions can be inspirational for both employees and customers D. whether the mission should describe what the firm actually does

whether this mission actually causes a firm to have a competitive advantage