4110 Raper Chapter 9
Alternative strategies not selected for implementation should be discarded, as they have a tendency to contaminate the contingency plans.
False
IFRS standards comprise 25,000 pages whereas GAAP standards comprise 5,000 pages
False
Quantitative criteria commonly used to evaluate strategies are
financial ratios
With the passage of time strategy evaluation is becoming
increasingly difficult
Strategy-evaluation activities should ideally be performed
on a continuous basis
Competitive advantage normally is the result of superiority in resources, skills, or
position
Rumelt's criteria of consonance refers to the need for strategists to examine
sets of trends
The Fortune 52 includes all of the following EXCEPT
the largest hospitals
International financial reporting standards (IFRS) comprise approximately [BLANK] pages.
5,000
Which of the following is NOT a key attribute that serves as one of the evaluative criteria for Fortune's "America's Most Admired Companies"?
Amount of physical resources
What term is defined as "a systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between these assertions and establish criteria, and communicating the results to interested users"?
Auditing
Which of the following is NOT included in measuring organizational performance?
Comparing results to competitors' expectations
What term refers to the need for strategists to examine sets of trends, as well as individual trends, in evaluating strategies?
Consonance
[BLANK] plans can be defined as alternative plans that can be put into effect if certain key events do not occur as expected.
Contingency
Which of these is a potential problem associated with using only quantitative criteria for selecting strategies?
Different accounting methods can provide different results on many quantitative criteria
A revised [BLANK] should indicate how effective a firm's strategies have been in response to key opportunities and threats
EFE matrix
Financial ratios are rarely used as a criteria to evaluate strategies.
False
Increased education and diversity of the workforce at all levels are reasons why the top-down approach should be favored in organizations
False
Most quantitative evaluation criteria are geared to long-term objectives rather than annual objectives.
False
Organizations should prepare contingency plans just for unfavorable events
False
Public accounting firms usually avoid strategy-evaluation services.
False
Strategists should try to cover all bases by planning for all possible contingencies.
False
The form of a Balanced Scorecard does not vary for different organizations or industries.
False
According to author Alvin Toffler, what occurs when the nature, types, and speed of changes overpower an individual's or organization's ability and capacity to adapt?
Future shock
A revised [BLANK] should focus on changes in the organization's management, marketing, finance and accounting, production and operations, R&D, and management information systems (MIS) strengths and weaknesses
IFE matrix
[BLANK] organizations require more elaborate and detailed strategy-evaluation systems than [BLANK] ones because it is more difficult to coordinate efforts among different division and functional areas
Large; small
Which of the following statements about contingency plans is NOT true?
Strategists should plan for all possible contingencies
What aims to balance long-term with short-term concerns, financials with nonfinancial concerns, and internal with external concerns?
The Balanced Scorecard approach
A frequently used tool in strategy evaluation is the audit
True
According to Rumelt, consistency and feasibility are largely based on a firm's internal assessment.
True
According to research, participation in strategy-evaluation activities is one of the best ways to overcome individual's resistance to change.
True
Adequate and timely feedback is important to effective strategy evaluation.
True
Alvin Toffler argues that environments are becoming so dynamic and complex that they threaten people and organizations with future shock, in his thought-provoking books entitled Future Shock and The Third Wave.
True
Evaluating strategies on a continuous rather than on a periodic basis allows benchmarks of progress to be established and more effectively monitored.
True
Identifying both good and bad events that could jeopardize strategies is the first step of effective contingency planning.
True
Intuitive judgements are almost always involved in deriving quantitative criteria.
True
Most executives believe that some strategic information should remain confidential to top managers
True
Most strategists believe that an organization's well-being depends on evaluation of the strategic-management process.
True
Regardless of the size of the organization, a certain amount of "management by wandering around" at all levels is essential to effective strategy evaluation.
True
Strategy-evaluation activities must be meaningful, that is, they should specifically relate to a firm's objectives
True
Strengths, weaknesses, opportunities, cost and threats should continually be monitored for change because it is not really a question of whether these factors will change, but rather when they will change and in what ways.
True
There is no one ideal strategy-evaluation system for all organizations
True
Too much emphasis on evaluating strategies may be expensive and counterproductive.
True
When measuring organizational performance, you need to compare expected results to actual results.
True
A particularly important twenty-first-century challenge facing all strategists today is
all of the above (deciding whether the process should be more an art or a science, deciding whether strategies should be visible or hidden from stakeholders, deciding whether the process should be more top-down or bottom-up in their firm)
Most quantitative criteria are geared to [BLANK] objectives rather than [BLANK] objectives
annual; long-term
Corrective action should do all of the following EXCEPT
avoid external opportunities
According to researchers, all of the following encourage individuals to accept change EXCEPT
being overpowered by the nature, types, and speed of changes
All of these are Richard Rumelt's criteria to evaluate a strategy EXCEPT
distinctiveness
According to Rumelt, the final broad test of strategy is its
feasibility
If success for one organizational department means failure for another department, then strategies may be
inconsistent
Success today
is no guarantee of success tomorrow
The strategy-evaluation process should foster
mutual understanding
Corrective actions are almost always [BLANK] except when external and internal factors have not significantly changed and the firm is progressing satisfactorily toward achieving stated objectives
needed
Which of Which of the following is NOT a reason for the increasing difficulty of evaluating strategies?
product life cycles are longer
If you discover during the course of strategy-evaluation that major changes have occurred in the firm's internal strategic position, you should
take corrective actions
Modern organizational realities demand that employees demonstrate greater
All of the above (flexibility, innovation, creativity, initiative)
With regard to the visible or hidden issue, most executives agree that
some strategic information should remain confidential to top managers
Controls need to be [BLANK] rather than [BLANK]
action-oriented; information-oriented
Strategies may be inconsistent if policy problems and issues continue to be brought to the top for resolution.
True
What is the cornerstone of effective strategy evaluation?
adequate and timely feedback
Already the European Union and 113 nations including Australia, Mexico, and Canada have [BLANK] IFRS rules.
adopted or soon plan to use
The strategy-evaluation process should
foster mutual understanding and trust
All of the following are reasons strategy evaluation is more difficult today EXCEPT
the increasing time span for which planning can be done with any degree of certainty
Which of the following is a corrective action a company might take to correct unfavorable variances?
All of the above (divesting a division, revision objectives, raising capital with stock or debt, allocating resources differently)
Which of these is a basic activity of strategy evaluation?
All of the above (reviewing the underlying bases of current strategies, comparing expected results with actual results, taking corrective actions)
What has been shown to permit quick response to change, prevent panic in crisis situations, and make managers more adaptable?
Contingency planning
According to Richard Rumelt, consonance and consistency are mostly based on a firm's external assessment.
False
In strategy evaluation, a revised IFE matrix should indicate how effective a firm's strategies have been in response to key opportunities and threats.
False
Strategy evaluation is becoming increasingly easier with the passage of time, given technological advances.
False
Strategy evaluation should have a long-run focus and avoid a short-run focus.
False
The US Chamber of Commerce is against the accounting switch from GAAP to IFRS, saying it will cause cross-border commerce to decline
False
The test of an effective evaluation system is its complexity
False
Believing it will make it easier for investors to compare firms across countries and make it easier to raise capital globally, most large accounting firms and multinational firms favor the switch to IFRS.
True
Contingency plans are alternative plans that can be put into effect if certain key events do not occur as expected.
True
Contingency plans should be as simple as possible
True
Measuring organizational performance includes comparing expected results to actual results, investigating deviations from plans, evaluating individual performance, and examining progress being made toward meeting stated objectives.
True
Taking corrective actions does not necessarily mean that existing strategies will be abandoned, or even that new strategies must be formulated.
True
The Balanced Scorecard approach deals with the question, "How satisfied are the firm's customers?"
True
The US Chamber of Commerce supports the change from GAAP to IFRS, saying it will help the US compete in the world economy
True
The accounting switch from GAAP to IFRS in the US is going to cost businesses millions of dollars in fees and upgraded software systems and training.
True
The decreasing time span for which planning can be done with any degree of certainty is a reason strategy evaluation is more difficult today.
True
Timely approximate information is generally more desirable as a basis for strategy evaluation than accurate information that does not depict the present
True
All of the following are reasons to be completely open as opposed to secretive with the strategy process EXCEPT
openness limits rival firms from imitating or duplicating the firm's strategies
Financial ratios are used to compare a firm's performance over different time periods, to compare the firm's performance to industry averages, and to compare a firm's performance with
the performance of competitors
What corrective actions might a firm take during strategy evaluation?
All of the above (revise the business mission, issue stock, revise objectives, sell a division)
Changes in the organization's management, marketing, finance and accounting, production and operations, research and development, and management information systems (MIS) strengths and weaknesses should all be the focus of a revised EFE matrix in a strategy evaluation.
False
Competitive advantages normally are the result of superiority in one of three areas: feasibility, consistency, or consonance.
False
Consistency, distinctiveness, advantage, and feasibility are Richard Rumelt's four criteria for evaluating strategy.
False
It is most effective to conduct strategy evaluation annually, at the end of the fiscal year
False
Measuring organizational performance requires making changes to reposition a firm competitively for the future.
False
Small organizations require a more elaborate and detailed strategy-evaluation system because they are still evolving.
False
Yahoo was one of the firms most admired in its industry according to Fortune's 2012 evaluation.
False
Which of the following is true regarding the design of a firm's strategy-evaluation system?
It should be determined based on the unique characteristics of a company
Corrective action in strategy evaluation is necessary to keep an organization on track toward achieving stated objectives.
True
Criteria for evaluating strategies should be measurable and easily verifiable.
True
Each year, Fortune publishes strategy-evaluation research on both the United States and other countries.
True
Future shock occurs when the nature, type, and speed of changes overpower an individual's or organization's ability and capacity to adapt.
True
Too much emphasis on evaluating strategies
may be expensive and counterproductive
Increased education and diversity of the workforce at all levels are reasons why
middle- and lower-level managers, and even nonmanagers, should be involved in the strategic planning process.
Most strategy literature advocates that strategic management is
more of a science than an art
Research suggests that which of the following is one of the best ways to overcome individuals' resistance to change in strategy evaluation?
participation
Also important in evaluating strategies are [BLANK] criteria, like high absenteeism and turnover rates, or low employee satisfaction
qualitative
Which of the following is NOT one of the four perspectives from which the Balanced Scorecard allows firms to evaluate strategies?
social responsibility
Corrective actions should always
strengthen an organization's competitive position in its industry
Mintzberg's notion of "crafting" strategies
suggests that strategic decision making be based primarily on holistic thinking, intuition, creativity, and imagination