Strategic Mgmt. Questions 1-56 Test 1

Free Winds, Inc. is a company that manufactures a variety of generators that run on wind power. The company wants to ensure that wind technology replaces all forms of exhaustible energy sources in the near future. Which of the following statements will make an accurate vision for Free Winds?

All nations around the globe should have access to a sustainable energy source.

Which of the following best describes a Level 5 manager in the Level-5 leadership pyramid?

Asoka is the CEO of Green Machines Inc.; he has helped his company in gaining and sustaining a competitive advantage through ethical decision making.

Which of the following examples reflects the strongest vision?

At Fuentes Electronics, all employees are motivated to make the best microwave ovens on the market

Which of the following is an example of an organizational value?

Burtell Oil, Inc. increases the inspection of pipelines above the legal requirement to prevent oil spills.

According to the upper-echelons theory, the organizational outcomes of a company primarily reflect the values of the

CEO of the company.

Which of the following summarizes the difference between corporate strategy and business strategy?

Corporate strategy deals with where to compete; business strategy deals with how to compete

Silver Screen Cinemas Inc. and Digi Now Inc. are two companies that own and run movie theaters in malls and other commercial areas. While Silver Screen Cinemas Inc. pursues a cost-leadership strategy, Digi Now Inc. adopts a differentiation strategy. Which of the following statements is most likely true of this scenario?

Digi Now and Silver Screen Cinemas will not be direct competitors to each other, and their customer segments will overlap very little.

During an assessment of employees and leaders in a company, Ethan Browne was categorized as a Level 5 manager in the Level-5 leadership pyramid. Which of the following can be inferred from this information?

Ethan is a top management executive in the company.

Pioneer Pharma Inc. and GH Medicines Corp. are two competing firms in the pharmaceutical industry. While Pioneer Pharma Inc.'s vision is "to be a preeminent drug manufacturer in the industry," GH Medicines Corp.'s vision is "to make good health a reality for everyone around the world." Which of the following is an implication of these different visions?

GH Medicines will be more flexible than Pioneer Pharma when adapting to changing environments.

Which of the following statements is true of top-down strategic planning?

In this process, the formulation of strategy is separate from implementation.

Jorge is part of a sales team. He effectively coordinates his tasks with others in the team and willingly contributes to their efforts in achieving the team's objectives. Thus, Jorge is in ________ of the Level-5 leadership pyramid.

Level 2

Which of the following statements about strategy is not true?

Operational effectiveness and competitive benchmarking should be treated as strategy.

Which of the following statements should ideally reflect a firm's strategy for competitive advantage?

Our aim is to create superior customer value while controlling costs.

Which of the following scenarios best illustrates a good stakeholder strategy?

PA Corp. distributes only 70 percent of its annual profit after taxes to shareholders, while the remaining is distributed among employees and the local community, and invested for further research.

How are the two approaches, strategic planning and scenario planning, different from the strategy-as-planned-emergence approach?

Relative to strategic planning and scenario planning, strategy as a planned emergence model is a less formal and less stylized approach to the development of strategy

Which of the following statements accurately brings out the difference between top-down strategic planning and scenario planning?

Scenario planning helps create strategic plans that are more flexible, and thus more effective, than those created through the more static strategic planning approach.

Which of the following best illustrates a strategic business unit (SBU)?

The consumer electronics division of a large company that also manufactures automobiles, apparel, and processed food

Which of the following is an implication of all firms in an industry pursuing a low-cost position through application of competitive benchmarking?

The firms would eventually have no resources to invest in product and process improvements.

Which of the following methods of developing a strategy best illustrates scenario planning?

The managers at Lyon Clothing Inc. formulated a strategy to tackle any increase in the prices of cotton in the future.

Which of the following strategies best illustrates a functional strategy?

The production manager at the apparel division of Wilder Style Co. has decided that the department will hire contract workers for three months to meet the temporary demand.

Which of the following is an assumption that top-down strategic planning rests on?

We can predict the future from the past.

Which of the following scenarios illustrates a firm that has a sustainable competitive advantage?

Zhang Corp. was able to hold its market share of 68 percent in the social networking industry for more than three years.

Shortly after the small island of Balamia experienced multiple unexpected high-intensity earthquakes that caused massive destruction, many banks and insurance companies filed for bankruptcy. This left the economy of the country in a poor state. The natural calamity in Balamia best exemplifies

a black swan event.

Which of the following best qualifies as a firm's internal stakeholder?

a manager taking care of the firm's operations in a foreign market

A firm always has a competitive disadvantage when its return on invested capital is

below the industry average.

When the strong dictatorial rule in Backenstein unexpectedly collapsed due to the shocking death of the royal family in an explosion, the nation's economy experienced drastic changes. The laws became more restrictive, the country lost many locally produced resources and products, and the distribution of wealth became inequitable. The unexpected event that led to these changes can best be described as a(n) ________ event.

black swan

Corporate executives at LikeReal, Inc. decide to compete in the remote model airplane industry by making the largest model planes available. By doing this, they completed part of their

business strategy.

Bauer Inc. is a company that manufactures plastics, fertilizers, tractors, and headphones under a single brand. The top management at Bauer has decided to enter the medical equipment industry based on its assessment of the profit potential in that industry. Which of the following strategies does this best illustrate?

corporate strategy

Due to political instability in the country of United Mapa, the strategic leaders at the headquarters of FT Supplies Inc. have decided to divest the company's business from the foreign market in United Mapa. This decision would be applicable to all the business units of FT Supplies Inc. operating in United Mapa. Thus, this is a

corporate strategy.

Customer-oriented visions do not

define how a customer need will be met.

The board at TriCom Manufacturing Corp. has decided to allocate 20 percent of the company's shares to its workforce, at a discounted price. Apart from being a valued investment, the plan will allow the employees to take personal responsibility for the firm's performance. Which of the following employee incentive schemes does this best illustrate?

employee stock ownership plan

Organic Food Inc., a multinational company, relies on its media partner Radio Plus to regularly advertise its offers, sales, and new products. Radio Plus is invested in this relationship because it generates most of its revenue from advertising Organic Food's products. In this scenario, Radio Plus is Organic Food Inc.'s

external stakeholder

Green Rabbit Products Inc. (GRP) is a large conglomerate. The human resources department of its telecom division has decided to reduce its employee turnover by encouraging internal promotions. Which of the following strategies does this scenario best illustrate?

functional strategy

The production department at Coral Cements that is a subsidiary of the large conglomerate Five East Corp. has decided to adopt the FIFO (first in, first out) method of inventory to dispatch its cement bags. Which of the following strategies does this scenario best illustrate?

functional strategy

Stakeholder strategy is an integrative approach to managing a diverse set of stakeholders effectively in order to

gain and sustain competitive advantage.

The best example of a firm's external stakeholder is a(n)

government agency that regulates the prices of products manufactured by the firm.

After a firm has identified its key stakeholders in stakeholder impact analysis, the immediate next step is to

identify stakeholders interests and claims

Rachel owns a large portion of GM Cube Inc.'s stocks. However, she is not employed by the company. In this scenario, Rachel is the company's

internal stakeholder.

The past black swan events in the United States demonstrate that

managerial actions can affect the economic well-being of large numbers of people around the globe.

The management of Wong Industries showed a commitment to ________ by increasing the salary of many female employees to meet its goal of having equal pay for women and men who perform comparable work.

organizational values

Which of the following is not an example of a software company's external stakeholder?

project managers

Pink Couture Inc. and Pink Blush Inc. are two companies in the apparel industry. While Pink Couture Inc. focuses on providing unique product features and superior customer service, Pink Blush Inc. focuses on low prices and minimal customer service. Both companies have been able to gain a competitive advantage. This is most likely because the companies have

pursued distinct strategic positions.

A core tenet of stakeholder strategy is that a

single-minded focus on shareholders alone exposes a firm to undue risks that can threaten the very survival of the enterprise.

If a company wants to gain a competitive advantage in a highly competitive industry, it should ideally

stake out a unique position within the industry.

Javier, a retired CEO, invests capital in a start-up company that creates budgeting software. He mentors the entrepreneur and the employees of the company because he wants the company to perform well and survive in the market. Thus, Javier is the start-up company's

stakeholder.

Blue Billion Inc. is a large company that sells a variety of products such as cosmetics, jewelry, frozen foods, navigation electronics, and airplanes. Apart from this, the company also has a strong presence in the service industry through its chain of dance studios, casinos, and nightclubs. Each of its product divisions operates as an individual business and is responsible for its own profits and losses. Thus, these product divisions under Blue Billion can be referred to as

strategic business units.

A traditional top-down strategic planning process typically begins with

strategic leaders adjusting a company's vision and mission based on environmental analysis

As the CEO of a conglomerate, Juana Mark exhibited her strong commitment toward the company's core value that customers' well-being is more important than profit when she decided to liquidate the company's tobacco subsidiary. The tobacco brand sold by her company was a major revenue earner in lesser-developed nations. However, Juana believed that her company had to be responsible toward society. In this scenario, Juana has demonstrated

strategic leadership.

Which of the following stages of the strategic management process involves an evaluation of a firm's external and internal environments?

strategy analysis

The management team at Clear Solutions, Inc. decided to build a branch office in Memphis, Tennessee. Which of the following terms correctly describes this action?

strategy formulation

Which of the following forces tends to be more important in determining a firm's performance?

the actions of managers within the firm

A company wants to determine how industry effects have affected its profitability. Which of the following elements should the company focus on?

the barriers to entry and exit within the industry

Who among the following is responsible for making business strategies in a large conglomerate?

the general managers of individual business units

Handy Pro, Inc. is a company that manufactures electric tools like drills, screwdrivers, and saws. Which of the following best illustrates a product-oriented vision for Handy Pro?

to be the pioneering manufacturer of electric tools

Which of the following is a customer-oriented vision?

to enable people throughout the globe to identify their capabilities

For a firm that operates in an industry where competition is high, which of the following practices will result in inferior performance?

trying to be everything to everybody by combining different competitive strategies