Strategic Management

Which of the following legal developments allow business to function as an institution? - freedom of speech - property rights - contract enforcement - voting rights

- property rights - contract enforcement

Which of the following legal developments allow business to function as an institution? - property rights - contract enforcement - voting rights - freedom of speech

- property rights - contract enforcement

Firms should identify a ______ so that employees can determine if they are making progress in addressing it. a. previous competitive advantage b. source of goal conflict c. statement of desire d. clear competitive challenge

d. clear competitive challenge

Which of the following is a tool that managers can use to address the needs of stakeholders while maintaining a competitive advantage? a. corporate citizen strategy b. stakeholder impact analysis c. ethical choice analysis d. group happiness strategy

b. stakeholder impact analysis

Walmart and Nordstrom maintain very different strategic profiles, one based on cost-leadership and the other based on differentiation through superior customer service. This is an example of ______. a. differences in industry norms b. the trade-offs required by strategic positioning c. a strategic failure by Walmart d. a strategic failure by Nordstrom

b. the trade-offs required by strategic positioning

When a firm implements a strategy that leads to superior performance relative to other companies in the same industry, it is said to have achieved ______. a. combined ideology b. prolonged management c. fiscal debilitation d. a competitive advantage

d. a competitive advantage

Internet privacy, genetic engineering, and stem-cell research are examples of areas in which a firm's ______ responsibilities exceed its legal responsibilities. a. educational b. economic c. ethical d. philanthropic

c. ethical

What are the categories of expectations that society has of the business enterprise as described in the CSR framework? - Economic - Aesthetic - Legal - Philanthropic - Ethical

- Legal - Philanthropic - Ethical - Economic

In the external analysis phase of the AFI strategy framework, what should managers ask? a. "How do external forces affect our strategy and competitive advantage?" b. "How does the firm make money? c. "What is the relationship between competitive advantage and firm performance?" d. "What effects do internal resources, capabilities, and core competencies have on the firm's competitive advantage?"

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

Stakeholder impact analysis is a decision tool that helps a company do which of the following? a. Achieve a competitive advantage b. Decide where to compete c. Act as a good corporate citizen d. Describe the role of functional managers in strategy formulation

a. Achieve a competitive advantage c. Act as a good corporate citizen

Shareholder activists, such as Bill Ackman and Carl Icahn, have much more power over a firm than individual investors, because they ______. a. can exercise block-voting rights or otherwise influence the corporate governance process b. are able to buy or sell a much larger number of shares than individuals can c. are less common and own less stock than individual investors d. have a small amount of assets under management

a. can exercise block-voting rights or otherwise influence the corporate governance process b. are able to buy or sell a much larger number of shares than individuals can

Michael's Deli is able to perform at the same level as its primary competitor. Michael's Deli has ______. a. competitive parity b. a noncompetitive business c. a competitive advantage d. a competitive disadvantage

a. competitive parity

In the ______ step of the stakeholder impact analysis the firm identifies their stakeholders' interests and claims according to the power, legitimacy, and urgency framework. a. second b. third c. first d. fourth e. fifth

a. second

Which of the following are outcomes of effective stakeholder management? a. It reduces organizational adaptability. b. It lowers the cost of business transactions by building trust. c. It leads to beneficial cooperation from stakeholders. d. It helps the firm achieve predictable and stable returns.

b. It lowers the cost of business transactions by building trust. c. It leads to beneficial cooperation from stakeholders. d. It helps the firm achieve predictable and stable returns.

Which of the four corporate social responsibilities is considered first and foremost for business enterprises? a. philanthropic b. economic c. ethical d. legal

b. economic

In the ______ step of the stakeholder impact analysis, firms identify their various social responsibilities to stakeholders. a. third b. fourth c. fifth d. first e. second

b. fourth

A firm's overall efforts to gain and sustain competitive advantage is referred to as which of the following? a. an operations strategy b. a pricing strategy c. a competitive strategy d. a marketing strategy

c. a competitive strategy

Managers have ______ resources in their quest for competitive advantage. a. unlimited b. unique c. zero d. limited

d. limited

What is the field of management that focuses on attaining competitive advantage by combining analysis, formulation, and implementation? a. management of stakeholder impact b. human resources management c. management of foundational behavior d. strategic management

d. strategic management

In the ______ step of the stakeholder impact analysis, managers need to decide the appropriate course of action for the firm in relation to stakeholder concerns.

fifth

When identifying stakeholders, a firm should focus on those stakeholders that ______. a. purchase and use its products b. are directly involved with the production or distribution of the company's products c. can be ignored with no material impact to the firm d. currently have, or could potentially have, a material effect on the firm

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

A successful business strategy creates ______ for both producers and consumers. a. wealth b. profits c. equity d. value

d. value

In the ______ step of the stakeholder impact analysis, the firm identifies the opportunities and threats that stakeholders present to the firm. a. second b. fifth c. first d. third e. fourth

e. fourth

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

true

A well-devised strategy is about which two things? - past successes or failures - what to do - what not to do - market trends in unrelated industries

- what to do - what not to do

Using a(n) ______ strategy formulation, managers examine where and how the firm should compete around the world. a. global b. immediate c. business d. governance

a. global

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

responsibility

Which of the following are the three important stakeholder attributes managers must pay particular attention to during stakeholder impact analysis? - legitimacy - financial standing - urgency - power

- legitimacy - urgency - power

The idea that firms should voluntarily give back to society when they are able to do so is known as ______. a. corporate profit sharing b corporate citizenship c. employee profit sharing d. legal citizenship

b corporate citizenship

How should managers prioritize stakeholder concerns in the final step of stakeholder impact analysis? a. by addressing the most vocal or visible complaints first b. by bringing the question to a vote at shareholder meetings c. by considering the power, legitimacy, and urgency of stakeholder claims d. by observing the actions of competitors

c. by considering the power, legitimacy, and urgency of stakeholder claims

A(n) ______ occurs when a firm performs below the industry average or is outperformed by its competitors. a. underperforming norm b. purchasing parity c. competitive disadvantage d. competitive parity e. negative advantage

c. competitive disadvantage

Which of the following elements comprise strategic management? -definition -analysis -realization -formulation -implementation

analysis, implementation, formulation

What is the first step in the AFI strategy framework? a. Application b. Acceptance c. Analysis d. Assurance

c. Analysis

What is the first step in the AFI strategy framework? a. Assurance b. Application c. Analysis d. Acceptance

c. Analysis

What must a firm do after diagnosing its specific competitive challenge? a Collect investments from stockholders b. Implement a set of coherent actions c. Create an effective guiding policy d. Identify its primary competitors

c. Create an effective guiding policy

Effective guiding policy is supported by and stays consistent through the use of ______. a. trade-offs b. grandiose statements c. social responsibilities d. strategic commitments

d. strategic commitments

Which of the following elements of the pyramid of corporate social responsibilities are result from a society's expectations toward business? a. philanthropic responsibilities b. ethical responsibilities c. economic responsibilities d. legal responsibilities

a. philanthropic responsibilities b. ethical responsibilities

Which statement about strategies is true? a. Vision and mission statements cannot lay the foundation for good strategies. b. A statement of desire on its own often leads to goal conflict. c. "We will be the best!" is an example of a strategy. d. Statements of desire typically address economic fundamentals.

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

Burger Bomb is a new hamburger restaurant. In order to compete successfully against its many competitors, Burger Bomb has decided to focus on quality and an interesting, unique menu that uses locally sourced, organic ingredients. These ideas are Burger Bomb's Blank______. a. vision b. strategy c. core values statement d. competitive parity

b. strategy

Managers often have to make decisions between two conflicting strategic options, otherwise known as ______. a. hot-points b. managerial dilemmas c. trade-offs d. bad choices

c. trade-offs

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

false

A strategic leader's job is to focus like a laser on shareholders. True or false

false

Although they are more vocal, activist investors have the same amount of power as individual investors. True or false

false

Which of the following topics should be considered during the analysis phase of the AFI framework? - the locations in the world where the firm should compete - the external environment and associated challenges - the role of strategic leadership and the strategy process - the firm's business model and competitive advantages - the firm's internal strengths and resources

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

Burger Bomb has been outperforming other burger restaurants in recent years. This indicates that Burger Bomb has which of the following? a. Strategic leadership b. A superior product c. A statistical advantage d. A competitive advantage

d. A competitive advantage

Which of the following questions are part of the five steps in stakeholder impact analysis? - Who are our stakeholders? - How can we gain maximum competitive advantage without taking our stakeholders into account? - What are our stakeholders' interests and claims? - What opportunities and threats do our stakeholders present? - Which stakeholders have little to no power over us?

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

Which statement about shareholders and employees is true? a. Employees are often made into shareholders through employee stock ownership plans. b. Shareholders and employees are entirely separate groups. c. The separation between the claims of management and of ownership has been increasing. d. The interests of stakeholders who are employed by a firm are the same as stakeholders who simply own stock.

a. Employees are often made into shareholders through employee stock ownership plans.

The Bright Bulb light bulb company produces a line of LED bulbs that customers consider very similar to competitors' LED bulbs. Which of the following conditions must be true for Bright Bulb to have a competitive advantage? a. The bulbs must have a lower cost than competitors' bulbs. b. The bulbs must be on the market for a longer period of time than competitors' bulbs. c. The bulbs must be more expensive than competitors' offerings. d. The bulbs must be sold by online retailers only.

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

Firms should identify a ______ so that employees can determine if they are making progress in addressing it. a. clear competitive challenge b. statement of desire c. source of goal conflict d. previous competitive advantage

a. clear competitive challenge

Stakeholder strategy argues that focusing exclusively on the needs of ______ places the firm at risk of failure. a. competitors b. managers c. shareholders d. employees

c. shareholders

Which statement is true about pricing strategies, internet strategies, alliance strategies, and brand strategies? a. They are all that a firm needs to achieve competitive advantage. b. They may be a necessary part of a firm's initiatives to support its competitive strategies. c. They often play a role in day-to-day operations, but they have no bearing on gaining competitive advantage. d. They represent a complete, consistent guiding policy and a good strategy.

b. They may be a necessary part of a firm's initiatives to support its competitive strategies.

Effective stakeholder management ______. a. causes a loss of trust with business partners b. helps a firm build a strong public reputation c. leads to dissatisfaction with customers d. results in greater likelihood of negative outcomes with employees

b. helps a firm build a strong public reputation

The question "How do we implement the formulated strategy through an organizational structure, culture, and control system that values and encourages ethical behavior?" would most likely be examined by managers in the ______ phase of the AFI strategy framework. a. formulation b. implementation c. analysis

b. implementation

In which step of a stakeholder impact analysis do firms identify those stakeholders that currently have, or potentially can have, a material effect on the company? a. fifth b. fourth c. third d. second e. first

e. first

Who among the following are considered internal stakeholders? - Stockholders - Customers - Governments - Unions - Competitors - Board members - Employees

- Stockholders - Board members - Employees

A firm that successfully executes a strategy benefits society by ______. - eliminating legal restrictions on controversial practices - reinvesting profits and increasing employment - creating value - limiting competition

- reinvesting profits and increasing employment - creating value

Among the various types of responsibilities a business firm has, which are specifically considered to be economic responsibilities? - giving investors a return on invested capital - repaying debts to creditors - Voluntarily giving back to society - doing what society deems just and fair

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

If a firm has a 10% return on invested capital while the industry average return on invested capital is 18%, the firm has a(n) ______. a. competitive disadvantage b. overperforming norm c. purchasing parity d. competitive parity

a. competitive disadvantage

Based on its long dominance as a coffeehouse chain, Starbucks has ______. a. competitive parity b. a competitive disadvantage c. a sustainable competitive advantage d. an absolute advantage

c. a sustainable competitive advantage

Which of the following are aims of stakeholder strategy? (Select all that apply.) a. To persuade internal stakeholders to cede control to external stakeholders b. To reduce the number of stakeholders of a firm c. To manage various stakeholders effectively d. To gain and sustain competitive advantage

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

A good strategy consists of three elements. The first element is accomplished through analysis of the firm's external and internal environments. We also call this______. a. a guiding policy to address the competitive advantage b. a set of coherent actions to implement the firms' guiding policy c. a diagnosis of the competitive advantage

c. a diagnosis of the competitive advantage

When a stakeholder has power over a company that stakeholder is ______. a. able to get the company more profit b. helping to improve the sales of the company by implementing new strategies c. able to influence the company to do something it would otherwise not do d. helping to implement the firm's strategy

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

Which of the following incentivize workers by offering them discounted shares or retirement plans based on company stock? a. employee welfare benefit plans b. stock buyback plans c. employee stock ownership plans d. initial public offerings

c. employee stock ownership plans

Starbucks's actions to educate its workers and management about racism indicates that the firm takes its ______ responsibilities seriously. a. economic b. philanthropic c. ethical d. legal

c. ethical

Customers, suppliers, creditors, unions, and governments are known as ______. a. rivals b. crowdsurfers c. external stakeholders d. internal stakeholders

c. external stakeholders

The stakeholders of a firm are ______. a. only those who directly profit from a firm's success b. only those firms that contribute to the production and distribution of a company's products c. individuals or groups that can affect and are affected by the actions of the firm d. individuals or groups who own at least one share of a firm's stock

c. individuals or groups that can affect and are affected by the actions of the firm

In which of the following situations can a firm providing goods and services gain a competitive advantage? -Their offerings provide more value for consumers than competitors' offerings. -Their offerings are similar to competitors' offerings at higher prices. -Their offerings cost more to produce than competitors' offerings. -Their offerings are of similar quality to competitors' offerings but can be sold at lower prices due to lower costs.

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

what are the five steps of the stakeholder impact analysis in order.

1. Who are our stakeholders? 2. What are our stakeholders' interests? 3. What opportunities and threats do our stakeholders present? 4. What economic, legal, ethical, and philanthropic responsibilities do we have to our stakeholders? 5. What should we do to effectively address the stakeholder concerns?

Which of the following statements regarding tasks in the AFI strategy framework is true? a. The tasks happen in sequence as separate steps. b. The tasks are interchangeable. c. The tasks are very interdependent. d. Only two of the tasks need to be followed for success.

c. The tasks are very interdependent.

In a(n) ______ strategy formulation, managers focus on deciding HOW the firm should compete. a. external b. global c. business d. corporate

c. business

When does a situation of competitive parity exist? a. Two or more firms enter into a strategic alliance. b. Two or more firms rely on international outsourcing to remain competitive. c. The performance of two or more firms is superior to the industry average. d. Two or more firms achieve the same performance results.

d. Two or more firms achieve the same performance results.

The third step of stakeholder impact analysis requires managers to identify the ______ presented by internal and external stakeholders. a. stakeholder interests and opportunities b. social responsibilities and stakeholder interests c. threats and responsibilities d. opportunities and threats

d. opportunities and threats

A good strategy consists of three elements. The second element is accomplished through strategy formulation, resulting in the firm's functional, business-level, and corporate-level strategies. This is also called ______. a. a guiding policy to address the competitive challenge b. a set of coherent actions to implement the firms' guiding policy c. a diagnosis of the competitive challenge

a. a guiding policy to address the competitive challenge

Which of the following are primary strategy objectives? a. controlling costs b. strengthening relationships c. maximizing sales d. creating value

a. controlling costs d. creating value

Which framework helps firms to identify their economic, legal, ethical, and philanthropic obligations to society? a. corporate social responsibility b. SWOT analysis c. strategic management framework d. AFI framework

a. corporate social responsibility

A competitive advantage ______. a. is assessed relative to other competitors in the industry b. places a firm at a disadvantage in regards to its ROI c. is based on the return of invested capital over a 15-year period d. takes into consideration globalization and rival factors

a. is assessed relative to other competitors in the industry

The third step of stakeholder impact analysis requires managers to identify the ______ presented by internal and external stakeholders. a. opportunities and threats b. stakeholder interests and opportunities c. social responsibilities and stakeholder interests d. threats and responsibilities

a. opportunities and threats

Why should a firm define a clear competitive challenge? a. so that employees can assess their progress toward addressing it b. so that external stakeholders have the same information as internal stakeholders c. so that managers can substitute tactical tools for a traditional strategy d. so that the firm can achieve competitive parity

a. so that employees can assess their progress toward addressing it

A competitive advantage that lasts for a long period of time is said to be ______. a. sustainable b. topical c. accurate d. theoretical e. geographic

a. sustainable

In the second step of the stakeholder impact analysis, managers need to identify and understand stakeholders' ______. a. likelihood of bringing legal action against the firm b. interests and claims c. political and cultural affiliations d. entire investment portfolio

b. interests and claims

Microsoft donating more than $3 billion in cash and software to people in need is an example of which type of corporate social responsibility? a. ethical b. philanthropic c. economic d. legal

b. philanthropic

What is strategy? a. a sustainable and dominant market share b. the set of actions a firm takes to achieve a competitive advantage c. a decision based on external situational analysis d. a decision based on internal situational analysis

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

In the ______ step of the strategy implementation phase of the AFI strategy framework, managers would examine how the firm should be structured in order to implement the desired strategy. a. internal analysis b. business ethics c. organizational design d. corporate governance

c. organizational design

Why should a firm define a clear competitive challenge? a. so that the firm can achieve competitive parity b. so that external stakeholders have the same information as internal stakeholders c. so that employees can assess their progress toward addressing it d. so that managers can substitute tactical tools for a traditional strategy

c. so that employees can assess their progress toward addressing it

A firm's attempts to manage the web of relationships between internal and external stakeholders in order to create value is known as ______. a. integrative strategy b. shareholder strategy c. stakeholder strategy d. happiness management strategy

c. stakeholder strategy

What term describes the groups or individuals who can impact or be impacted by a firm's actions? a. expatriates b. shareholders c. competitors d. stakeholders

d. stakeholders

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

d. strategic positioning

In order to determine if Home Depot has a competitive advantage, we must compare Home Depot's performance to ____. a. only non-US-based firms b. a firm in the technology industry c. its past financial performance d. the performance of other firms in its industry

d. the performance of other firms in its industry