BUS498- Strategic Management Exam 1

In the external analysis phase of the AFI strategy framework, what should managers ask?

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

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 of similar quality to competitors' offerings but can be sold at lower prices due to lower costs.

A firm that successfully executes a strategy benefits society by

-reinvesting profits and increasing employment -creating value

five steps in stakeholder impact analysis

1. Who are our stakeholders? 2. What are our stakeholders' interests and claims? 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?

Stakeholder impact analysis is a decision tool that helps a company do which of the following?

Act as a good corporate citizen Achieve a competitive advantage

What is the first step in the AFI strategy framework?

Analysis

What must a firm do after diagnosing its specific competitive challenge?

Create an effective guiding policy

Which one of the following is a capability a Level-3 leader typically exhibits?

Does things right.

What are the categories of expectations that society has of the business enterprise as described in the CSR framework?

Economic Ethical Philanthropic Legal

Who among the following are considered internal stakeholders?

Employees Stockholders Board members

Which statement about shareholders and employees is true?

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

A Level-3 leader ought to be able to create long-lasting greatness through resolve and humbleness.

False

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

False

A strategic leader's job is to focus like a laser on shareholders

False

Which of the following are outcomes of effective stakeholder management?

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

What is the overall purpose of a firm's strategy?

Perform better than other companies in the same industry.

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?

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

Which of the following statements regarding tasks in the AFI strategy framework is true?

The tasks are very interdependent.

Which of the following are aims of stakeholder strategy?

To gain and sustain competitive advantage To manage various stakeholders effectively

When does a situation of competitive parity exist?

Two or more firms achieve the same performance results.

A firm's overall efforts to gain and sustain competitive advantage is referred to as which of the following?

a competitive strategy

A stakeholder has Blank______ when its needs are within the bounds of the law or are otherwise relevant to the firm.

a legitimate claim

To which types of organizations can we apply the principles of strategic management?

all types of organizations

In the strategy process, questions concerning WHERE to compete, such as the industry or market, is referred to as ______ strategy.

corporate

The idea that firms should voluntarily give back to society when they are able to do so is known as

corporate citizenship

Which framework helps firms to identify their economic, legal, ethical, and philanthropic obligations to society?

corporate social responsibility

Which of the following elements of the pyramid of corporate social responsibilities are result from a society's expectations toward business?

ethical responsibilities philanthropic responsibilities

According to the Level-5 pyramid, which level of leadership has the fewest members?

executives

Customers, suppliers, creditors, unions, and governments are known as

external stakeholders

Using a(n) ______ strategy formulation, managers examine where and how the firm should compete around the world.

global

Effective stakeholder management

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.

implementation

The stakeholders of a firm are

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

Research about how CEOs spend their days suggests that CEOs spend most of their time

interacting with others

In the second step of the stakeholder impact analysis, managers need to identify and understand stakeholders'

interests and claims

A competitive advantage ______.

is assessed relative to other competitors in the industry

Managers have ______ resources in their quest for competitive advantage.

limited

Which of the following is an important part of strategic leadership and is the strategic leader's ability to influence and direct individuals to do things?

power

Which of the following legal developments allow business to function as an institution?

property rights contract enforcement

Strategic positioning allows managers to

provide customers value while controlling costs

In the ______ step of the stakeholder impact analysis the firm identifies their stakeholders' interests and claims according to the power, legitimacy, and urgency framework.

second

Stakeholder strategy argues that focusing exclusively on the needs of ______ places the firm at risk of failure.

shareholders

Why should a firm define a clear competitive challenge?

so that employees can assess their progress toward addressing it

Which of the following is a tool that managers can use to address the needs of stakeholders while maintaining a competitive advantage?

stakeholder impact analysis

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

strategic positioning

strategy is the art and science of

success and failure

A competitive advantage that lasts for a long period of time is said to be ______.

sustainable

Which of the following is the conceptual framework developed by Jim Collins that describes the progression of leadership through distinct, sequential levels?

the Level-5 leadership pyramid

According to upper-echelons theory, the way strategic leaders of a firm interpret a situation is influenced by which of the following?

the values and experiences of the firm's leaders

In the ______ step of the stakeholder impact analysis, the firm identifies the opportunities and threats that stakeholders present to the firm.

third

Corporate strategy concerns questions related to

where to compete

A firm's attempts to manage the web of relationships between internal and external stakeholders in order to create value is known as

stakeholder strategy

What term describes the groups or individuals who can impact or be impacted by a firm's actions?

stakeholders

Effective guiding policy is supported by and stays consistent through the use of

strategic commitments

Which of the following topics should be considered during the analysis phase of the AFI framework?

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

Strategy Implementation primarily involves which of the following?

the organization, coordination, and integration of how work gets done

Both strategy formulation and strategy implementation are aspects of

the strategy process

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

the trade-offs required by strategic positioning

Upper-echelons theory views organizational outcomes as a reflection of the values of the

top management team

Managers often have to make decisions between two conflicting strategic options, otherwise known as

trade-offs

According to the ______, effective leadership is the outcome of certain intrinsic talents as well as education.

upper-echelons theory

A successful business strategy creates ______ for both producers and consumers.

value

A well-devised strategy is about which two things?

what not to do and what to do

Strategy formulation concerns the choice of strategy in terms of Blank______ to compete.

where and how

According to the Level-5 leadership pyramid, a person is referred to as a contributing team member at which level?

2

Which level of strategic leader presents a convincing vision and mission that helps groups improve their performance?

4

Which statement about strategies is true?

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

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

False

______ strategy answers questions regarding how to implement the business strategy.

Functional

Which of the following is a capability that a Level-2 manager typically exhibits?

The manager is capable of working effectively with others to accomplish common objectives.

What is strategic leadership?

The use of influence and power by executives to direct the activities of individuals while pursuing an organization's goals

For CEOs, what is an advantage of face-to-face meetings?

They allow CEOs to effectively communicate their ideas and positions.

What distinguishes a Level-5 leader from other levels of leaders?

They create enduring greatness.

Which statement is true about pricing strategies, internet strategies, alliance strategies, and brand strategies?

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

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

True

Which of the following questions are part of the five steps in stakeholder impact analysis?

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

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 competitive advantage

Based on its long dominance as a coffeehouse chain, Starbucks has

a sustainable competitive advantage

When a stakeholder has power over a company that stakeholder is

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

Shareholder activists, such as Bill Ackman and Carl Icahn, have much more power over a firm than individual investors, because they

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

In a(n) ______ strategy formulation, managers focus on deciding HOW the firm should compete.

business

Which strategy addresses the question of how to compete?

business

How should managers prioritize stakeholder concerns in the final step of stakeholder impact analysis?

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

Firms should identify a ______ so that employees can determine if they are making progress in addressing it

clear competitive challenge

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)

competitive disadvantage

occurs when a firm performs below the industry average or is outperformed by its competitors.

competitive disadvantage

Michael's Deli is able to perform at the same level as its primary competitor. Michael's Deli has

competitive parity

Which of the following are primary strategy objectives?

creating value and controlling costs

When identifying stakeholders, a firm should focus on those stakeholders that

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

Which of the four corporate social responsibilities is considered first and foremost for business enterprises?

economic

According to the Level-5 Pyramid, a Level-4 leader is also referred to as a(n) ______.

effective leader

Which of the following incentivize workers by offering them discounted shares or retirement plans based on company stock?

employee stock ownership plans

Internet privacy, genetic engineering, and stem-cell research are examples of areas in which a firm's Blank______ responsibilities exceed its legal responsibilities.

ethical

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

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?

first

In the ______ step of the stakeholder impact analysis, firms identify their various social responsibilities to stakeholders.

fourth

Business strategy is developed by

general managers in strategic business units

The third step of stakeholder impact analysis requires managers to identify the Blank______ presented by internal and external stakeholders.

opportunities and threats

The third step of stakeholder impact analysis requires managers to identify the ______ presented by internal and external stakeholders.

opportunities and threats

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.

organizational design

Among the various types of responsibilities a business firm has, which are specifically considered to be economic responsibilities?

repaying debts to creditors giving investors a return on invested capital