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