Chapter 9
All of these are Richard Rumelt's criteria to evaluate a strategy EXCEPT A) advantage. B) consistency. C) feasibility. D) distinctiveness. E) consonance.
D
All of the following are reasons to be completely open as opposed to secretive with the strategy process EXCEPT A) managers, employees and other stakeholders can readily contribute to the process. B) stakeholders have greater basis for understanding and committing to a firm that is open. C) visibility promotes democracy, whereas secrecy promotes autocracy. D) participation and openness enhance understanding, commitment and communication within the firm. E) openness limits rival firms from imitating or duplicating the firm's strategies
E
IFRS standards comprise 25,000 pages, whereas GAAP standards comprise 5,000 pages.
False
It is most effective to conduct strategy evaluation annually, at the end of the fiscal year.
False
Public accounting firms usually avoid strategy-evaluation services.
False
While open-mindedness is generally considered to be a good trait, it endangers effective strategic management.
False
Yahoo was one of the world's most admired companies, according to Fortune's 2014 evaluation.
False
Contingency plans should be as simple as possible.
True
The Balanced Scorecard approach addresses the question "How satisfied are the firm's customers?"
True
There is no one ideal strategy-evaluation system for all organizations.
True
When measuring organizational performance, a comparison should be made between expected results and actual results.
True
Competitive advantage normally is the result of superiority in resources, skills, or A) employees. B) position. C) consistency. D) feasibility. E) governance.
B
Which of these is a potential problem associated with using only quantitative criteria for selecting strategies? A) Most quantitative criteria are geared to long-term objectives rather than annual objectives. B) Different accounting methods can provide different results on many quantitative criteria. C) Intuitive judgments are almost never used in deriving quantitative criteria. D) Quantitative criteria include human factors that may be underlying causes of declining performance. E) Quantitative criteria are not useful for comparisons of the firm's performance over different periods of time.
B
With regard to the visible or hidden issue, most executives agree that A) the SEC should regulate whether or not companies make their strategic information visible. B) some strategic information should remain confidential to top managers. C) a company has gone too far when it takes steps to ensure that strategic information is not disseminated beyond "the inner circle." D) the potential benefit of improved employee and stakeholder motivation and input is not worth the risk of rival firms easily knowing and exploiting a firm's strategies. E) keeping strategies secret from employees and stakeholder will likely improve communication, understanding, and commitment.
B
Controls need to be ________ rather than ________. A) action-oriented; information-oriented B) cultural; political C) qualitative; quantitative D) measurable; timely E) universal; diverse
A
Research suggests that which of the following is one of the best ways to overcome individuals' resistance to change in strategy evaluation? A) Participation B) Command-and-control C) Laissez-faire system D) Rational argument E) Emotional reactions
A
What is the cornerstone of effective strategy evaluation? A) Adequate and timely feedback B) Quality and quantity of managers C) Smaller ratio of top- to lower-level management D) Evaluation preceding implementation stage E) Punitive corrective actions
A
Corrective action should do all of the following EXCEPT A) capitalize upon internal strengths. B) avoid external opportunities. C) avoid, reduce, or mitigate external threats. D) improve internal weaknesses. E) strengthen an organization's competitive position.
B
International financial reporting standards (IFRS) comprise approximately ________ pages. A) 1,000 B) 5,000 C) 10,000 D) 25,000 E) 100,000
B
Success today A) guarantees success tomorrow. B) is no guarantee of success tomorrow. C) provides significant assurance of success tomorrow. D) is all that really matters. E) none of the above
B
What aims to balance long-term with short-term concerns, financial with nonfinancial concerns, and internal with external concerns? A) Contingency planning B) The Balanced Scorecard approach C) Taking corrective action D) Benchmarking E) Consonance
B
What term refers to the need for strategists to examine sets of trends, as well as individual trends, in evaluating strategies? A) Consistency B) Consonance C) Synergy D) Feasibility E) Advantage
B
Which of the following is NOT a guideline for an effective strategic planning process? A) It should not become ritualistic, stilted, or orchestrated. B) It should employ International Financial Reporting Standards (IFRS). C) It should not be too formal, predictable, or rigid. D) It should not contain jargon or arcane planning language. E) It should not be a formal system for control.
B
A revised ________ should indicate how effective a firm's strategies have been in response to key opportunities and threats. A) IFE Matrix B) mission C) EFE Matrix D) vision E) CPM Matrix
C
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? A) Corporate insecurity B) Corrective actions C) Future shock D) Corporate agility E) Projected performance
C
If you discover during the course of strategy evaluation that major changes have occurred in the firm's internal strategic position, you should A) continue on the present strategic course. B) wait until the next quarter to see if things revert. C) take corrective actions. D) follow the original strategic plan. E) none of the above
C
Most quantitative criteria are geared to ________ objectives rather than to ________ objectives. A) top-management; employee B) short-term; annual C) annual; long-term D) environmental; community E) long-term; short-term
C
Strategy-evaluation activities should ideally be performed A) just on a periodic basis. B) only at the onset of a problem. C) on a continuous basis. D) solely upon completion of major projects. E) annually only.
C
What has been shown to permit quick response to change, prevent panic in crisis situations, and make managers more adaptable? A) Audits B) Balanced Scorecards C) Contingency plans D) Corrective actions E) Measuring performance
C
All of the following are reasons strategy evaluation is more difficult today EXCEPT A) a dramatic increase in the environment's complexity. B) the increasing number of variables. C) the increase in the number of both domestic and world events affecting organizations. D) the increasing time span for which planning can be done with any degree of certainty. E) the rapid rate of obsolescence of even the best plans.
D
Increased education and diversity of the workforce at all levels are reasons why A) the top-down approach is preferred. B) the bottom-up approach is untenable. C) only top executives have the experience and acumen to make strategy decisions. D) middle-level and lower-level managers, and even non-managers, should be involved in the strategic planning process. E) the horizontal approach is the most pragmatic choice.
D
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"? A) People management B) Innovativeness C) Financial soundness D) Amount of physical resources E) Social responsibility
D
Which of the following is true regarding the design of a firm's strategy-evaluation system? A) There is a one-size-fits-all system that works for all companies. B) It does not need to take into account the organization's size. C) The management style of a firm has no bearing on the design. D) It should be determined based on the unique aspects of a company. E) There is one ideal system.
D
________ plans can be defined as alternative plans that can be put into effect if certain key events do not occur as expected. A) Agile B) Scenario C) Evaluation D) Contingency E) Forecast
D
Which of the following is a corrective action a company might take to correct unfavorable variances? A) Divesting a division B) Revising objectives C) Raising capital with stock or debt D) Allocating resources differently E) All of the above
E
Which of these is a basic activity of strategy evaluation? A) Examining the underlying bases of current strategies B) Measuring organizational performance C) Taking corrective actions D) Choices B and C only E) All of the above
E
Financial ratios are rarely used as criteria to evaluate strategies.
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
Measuring organizational performance requires making changes to reposition a firm competitively for the future.
False
Organizations should prepare contingency plans just for unfavorable events.
False
Strategy evaluation is becoming increasingly easier with the passage of time, given technological advances.
False
The test of an effective evaluation system is its complexity.
False
To enhance effectiveness, R. T. Lenz recommends keeping the strategic management process routine.
False
A frequently used tool in strategy evaluation is the audit.
True
According to Linneman and Chandran, identifying both good and bad events that could jeopardize strategies should be the first step in contingency planning.
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 resistance to change.
True
Adequate and timely feedback is critical 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
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 from GAAP to IFRS.
True
Intuitive judgments are almost always involved in deriving quantitative criteria.
True
Most executives believe that some strategic information should remain confidential to top managers.
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
Strategies may be inconsistent if policy problems and issues continue to be brought to the top for resolution.
True
Strategy-evaluation activities must be meaningful, that is, they should specifically relate to a firm's objectives.
True
Taking corrective actions does not necessarily mean that existing strategies will be abandoned, or even that new strategies must be formulated.
True