Chapter 2 Quiz

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?

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

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

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

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

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

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.

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.

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) 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