MGT 527 Midterm Exam review
In the external analysis phase of the AFI strategy framework, what should managers ask?
"How do external forces affect our strategy and competitive advantage?"
Which of the following are the relationships that a firm has with stakeholders?
- Stakeholders can affect the firm's actions. - The actions of the firm can affect stakeholders.
Place the five steps of the stakeholder impact analysis in order, with the first step at the top.
- Who are our stakeholders? - What are our stakeholders' interests? - What opportunities and threats do our stakeholders present? - What economic, legal, ethical, and philanthropic responsibilities do we have to our stakeholders? - 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?
Achieve a competitive advantage Act as a good corporate citizen
What is the first step in the AFI strategy framework?
Analysis
What is the overall purpose of strategic management?
Gain competitive advantage
Which statement best describes escalating commitment?
Individuals acting as decision makers continue to support and invest in a project despite feedback indicating that it will fail.
Which statement best describes groupthink?
Individuals automatically agree with a leader without critically evaluating or challenging the leader's views and assumptions.
True or false: The resource-allocation process (RAP) can be designed to support planned emergence.
True
Which of the following statements is correct?
Strategic initiatives can be the result of top-down planning or a bottom-up process.
What is the premise of Henry Mintzberg's position regarding strategic planning?
Strategy can be planned or emerge from the bottom-up.
Critics of the more formalized strategic planning approaches proposed a framework that accounts for which of the following realities?
Strategy can emerge from the bottom up. Strategy can be planned.
To which types of organizations can we apply the principles of strategic management?
all types of organizations
Which of the following is a term used to describe a highly unlikely event that has a significant impact on society?
black swan event
In the strategy process, questions concerning HOW to compete, such as through differentiation, are referred to as ______ strategy.
business
Which strategy addresses the question of how to compete?
business
All of the following are sources of strategic initiatives except Blank______.
consumer demand
Which of the following are primary strategy objectives?
controlling costs creating value
A(n) ______ is a statement of principles to guide an organization as it works to achieve its vision and fulfill its mission.
core values statement
Which of the following is a statement of guiding principles that typically provides very specific ethical considerations?
core values statement
Which framework helps firms to identify their economic, legal, ethical, and philanthropic obligations to society?
corporate social responsibility
When identifying stakeholders, a firm should focus on those stakeholders that ______.
currently have, or could potentially have, a material effect on the firm
What kind of vision statement defines a company by describing its interest in developing solutions to consumer problems?
customer-oriented
The story concerning the discovery of Starbucks' Frappuccino is an example of a(n) ______ strategy, or an unplanned strategic initiative that originated at the bottom and moved to the top.
emergent
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
Stakeholder impact analysis is a ______-step process that allows managers to better understand and address stakeholders' needs.
five
The goal of using the AFI strategy framework for scenario planning is to create strategic plans that are Blank______.
flexible
In the ______ step of the stakeholder impact analysis, firms identify their various social responsibilities to stakeholders.
fourth
A competitive advantage ______.
is assessed relative to other competitors in the industry
After creating a vision as part of the strategic management process, what must a a firm establish next?
mission
A ______ outlines what an organization does, while a vision outlines what the organization wants to do.
mission statement
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
The concept, or framework, of corporate social ______ guides firms in identifying and addressing their economic, legal, ethical, and philanthropic obligations to society.
responsibility
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
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
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
A strategic business unit (SBU) is defined as a(n) ______.
standalone division of a larger conglomerate
Effective guiding policy is supported by and stays consistent through the use of ______.
strategic commitments
A(n) ______ is any activity a firm pursues to explore and develop new products and processes, new markets, or new ventures.
strategic initiative
What are autonomous actions?
strategic initiatives that lower-level employees undertake of their own volition, often in response to unanticipated events
Which theory proposes that when faced with decisions, we tend to satisfice rather than optimize?
theory of bounded rationality
In the ______ step of the stakeholder impact analysis, the firm identifies the opportunities and threats that stakeholders present to the firm.
third
What is the typical result of cognitive limitations?
We choose the option that is "good enough" and satisfies immediate needs.
Upper-echelons theory views organizational outcomes as a reflection of the values of the ______.
top management team
A competitive advantage that lasts for a long period of time is said to be ______.
sustainable
A powerful strategic commitment assures ______.
that steps are taken to achieve the mission
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
Which of the following are addressed during corporate strategy formulation?
which market to compete in which geographic location to compete in which industry to compete in
Based on its long dominance as a coffeehouse chain, Starbucks has ______.
a sustainable competitive advantage
Which of the following topics should be considered during the analysis phase of the AFI framework?
- the external environment and associated challenges - the firm's business model and competitive advantages -the role of strategic leadership and the strategy process - the firm's internal strengths and resources
The ______ is an example of a black swan event.
2008 global financial crisis
Burger Bomb has been outperforming other burger restaurants in recent years. This indicates that Burger Bomb has which of the following?
A competitive advantage
______ is a form of communication that enables the CEO of a company to pick up on nonverbal information, such as moods and body language.
A face-to-face meeting
Which statements about vision statements and firm performance are true?
A positive relationship between vision statements and firm performance is more likely to exist when the visions are customer-oriented. Vision statements and firm performance are sometimes associated with one another.
Which statement about strategies is true?
A statement of desire on its own often leads to goal conflict.
Which of the following is not necessarily a capability a Level-1 leader typically exhibits?
Contributes through collaboration.
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.
Which of the following elements of the pyramid of corporate social responsibility are required by society and shareholders?
Economic responsibilities Legal responsibilities
What does the Frappuccino story illustrate about the strategic management process?
Emergent strategies can be very successful.
According to Daniel Kahneman and Amos Tversky, System 1 is analytical, logical, and deliberate.
False
True or false: A statement such as, "We will be the biggest company in the world," is an example of strategy.
False
True or false: Emergent strategy is planned.
False
True or false: Top-down strategic planning is most effective when the environment is constantly changing.
False
What should a successful vision do for an organization?
It should make employees feel that their work is important. It should inspire employees.
Which of the following statements about scenario planning is true?
It starts with a top-down approach.
According to the Level-5 leadership pyramid, a person is referred to as a contributing team member at which level?
Level 2
Which level of strategic leader presents a convincing vision and mission that helps groups improve their performance?
Level 4
What is the overall purpose of a firm's strategy?
Perform better than other companies in the same industry.
Why are businesses with product-oriented vision statements often less effective than businesses with customer-oriented vision statements?
Product-oriented companies have less flexibility to meet consumer needs.
What are the approaches that can be utilized when strategizing for competitive advantage?
Scenario planning Strategic planning Strategy as planned emergence
______ describe(s) random events, pleasant surprises, and accidental happenstances that can have a profound impact on a firm's strategic initiatives.
Serendipity
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.
What is strategic leadership?
The use of influence and power by executives to direct the activities of individuals while pursuing an organization's goals
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.
Which of the following are aims of stakeholder strategy? (Select all that apply.)
To gain and sustain competitive advantage To manage various stakeholders effectively
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
A stakeholder has ______ when its needs are within the bounds of the law or are otherwise relevant to the firm.
a legitimate claim
When a stakeholder has power over a company that stakeholder is ______.
able to influence the company to do something it would otherwise not do
Which of the four corporate social responsibilities is considered first and foremost for business enterprises?
economic
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
A core values statement provides information to employees regarding the company's ______.
ethics and morals
According to the Level-5 pyramid, which level of leadership has the fewest members?
executives
Which of the following elements comprise strategic management?
implementation analysis formulation
A(n) ______ can help employees feel that they are doing something worthwhile and are part of something important and meaningful.
inspirational vision
A(n) ______ strategy is the outcome of a rational and structured, top-down strategic plan.
intended
Sustainable competitive advantage exists when a firm ______.
maintains superior performance relative to its industry over a long period of time
Which of the following is not one of the steps in the traditional top-down strategic planning process?
measurement
Studies show that CEOs spend the majority of their time ______.
meeting people face-to-face
Top-down strategy is derived from ______.
military strategy
The third step of stakeholder impact analysis requires managers to identify the ______ presented by internal and external stakeholders.
opportunities and threats
he third step of stakeholder impact analysis requires managers to identify the ______ presented by internal and external stakeholders.
opportunities and threats
Shortcomings of top-down strategic planning are that ______.
plans for the future can be wrong there is uncertainty about the future
A ______ vision statement defines a business by describing the goods or services it produces or offers.
product-oriented
What type of vision statement tends to limit a manager's flexibility and ability to adapt?
product-oriented
Strategic positioning allows managers to ______.
provide customers value while controlling costs
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
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 ______.
strategy
Which of the following is the least formal approach to setting the strategy process?
strategy as planned emergence
What is the primary concern of functional strategy?
strategy implementation
Strategy Implementation primarily involves which of the following?
the organization, coordination, and integration of how work gets done
In order to determine if Home Depot has a competitive advantage, we must compare Home Depot's performance to ______.
the performance of other firms in its industry
What is strategy?
the set of actions a firm takes to achieve a competitive advantage
Both strategy formulation and strategy implementation are aspects of ______.
the strategy process
According to the ______, effective leadership is the outcome of certain intrinsic talents as well as education.
upper-echelons theory
Which of the following are the three important stakeholder attributes managers must pay particular attention to during stakeholder impact analysis?
urgency power legitimacy
In crafting a strategic management plan, leaders must first determine the company's long-term objective. This means leaders must first define the organization's ______.
vision
In the strategic management process, which basic principle must be defined first?
vision