Business Policy and Strategic Management Ch 1-3

True

A clear mission statement describes the values and priorities of an organization. Ch 1 p. 10

False

A vision statement commonly answers the question, "What is our business?" whereas a mission statement is more likely to answer the question "What do we want to become?" Ch 1 p. 10

False

A vision statement describes an organization's values and priorities. Ch 1 p. 10

False

A vision statement identifies the scope of a firm's operations in product and market terms. Ch 1 p. 10

False

According to Albert Einstein, "Knowledge is far more important than intuition." Ch 1 p. 7

True

According to Greenley, some of the benefits of strategic management are increased discipline, enhanced communication, and more effective allocation of time and resources. Ch 1 p. 17

D) increased resistance to change.

According to Greenley, strategic management offers all of the following benefits EXCEPT A) increased discipline. B) enhanced communication. C) increased synergy. D) increased resistance to change. E) more effective allocation of time and resources. Ch 1 p. 17 - under "Nonfinancial Benefits"

False

According to Peter Drucker "Imagination is more important than knowledge, because knowledge is limited, whereas imagination embraces the entire world." Ch 1 p. 7

True

All firms have a strategy, even if it is informal, unstructured, and sporadic. Ch 1

A) strategy evaluation

An important activity in ________ is taking corrective action. A) strategy evaluation B) strategy implementation C) strategy formulation D) strategy leadership E) all of the above Ch 1 p. 6

False

An objective, logical, systematic, & non intuitive approach for making major decisions in an organization is a way to describe the strategic-management process. Ch 1 p. 6 bottom of page

D) proactive rather than a reactive

An organization should take a(n) ________ approach in its industry. A) adversarial rather than a collegial B) collegial rather than an adversarial C) reactive rather than a proactive D) proactive rather than a reactive E) cooperative rather than a competitive Ch 1

D) answers the question: "What do we want to become?"

An organization's vision statement A) is a constant reminder to its employees of why the organization exists. B) broadly charts the future direction of an organization. C) addresses the basic question: "What is our business?" D) answers the question: "What do we want to become?" E) none of the above Ch 1 p. 10

True

Analytical and intuitive thinking complement each other. Ch 1 p. 7

True

Anything a firm does especially well, compared to rival firms, could be considered a competitive advantage. Ch 1 p. 8

A) competitive advantage.

Anything that a firm does especially well compared to rival firms is referred to as A) competitive advantage. B) comparative disadvantage. C) opportunity cost. D) unsustainable advantage. E) an external opportunity. Ch 1 p. 8

True

Application of the strategic-management process is typically more formal in larger and well-established organizations. Ch 1

False

Because the position of Chief Executive Officer (CEO) has assumed much responsibility for strategic management in the last five years, the number of firms with the position of Chief Strategy Officer (CSO) has diminished drastically during this period. Ch 1 p. 9 paragraph 1 and 2

False

By occasionally monitoring external events, companies should be able to identify when change is required. Ch 1

False

By the nature of what they do, strategists tend to have similar attitudes, values, ethics and concerns for social responsibility. Ch 1

True

Commitment and understanding may be the most important benefits of strategic management. Ch 1 p. 16

The term "strategic planning" is more often used in the business world, whereas "strategic management" is often used in academia. Sometimes, strategic management is used to refer to strategy formulation, implementation and evaluation, with strategic planning referring only to strategy formulation.

Compare and contrast strategic planning with strategic management. Ch 1 p. 5

False

Despite its great popularity in the 1980s, strategic planning by corporate America is now a valuable though rare activity. Ch 1 p.5

False

Determining opportunities and threats is generally the first step in strategic planning. Ch 1 p. 15

Application of the strategic-management process is typically more formal in larger and well-established organizations. Formality refers to the extent that participants, responsibilities, authority, duties, and approach are specified. Smaller businesses tend to be less formal. Firms that compete in complex, rapidly changing environments, such as technology companies, tend to be more formal in strategic planning. Firms that have many divisions, products, markets and technologies also tend to be more formal in applying strategic-management concepts. Greater formality in applying the strategic-management process is usually positively associated with organizational success

Discuss some forces that influence the formality of the strategic-management process. Ch 1 p. 15 - 5th paragraph

Many organizations today develop a vision statement that answers the question "What do we want to become?" Developing a vision statement is often considered the first step in strategic planning, preceding even development of a mission statement. Many vision statements are a single sentence. For example, the vision statement of Stokes Eye Clinic in Florence, South Carolina, is "Our vision is to take care of your vision." Mission statements are "enduring statements of purpose that distinguish one business from other similar firms. A mission statement identifies the scope of a firm's operations in product and market terms." It addresses the basic question that faces all strategists: "What is our business?" A clear mission statement describes the values and priorities of an organization. Developing a mission statement compels strategists to think about the nature and scope of present operations and to assess the potential attractiveness of future markets and activities. A mission statement broadly charts the future direction of an organization and serves as a constant reminder to employees of why the organization exists and what its founders envisioned.

Discuss the differences between vision and mission statements. Ch 1 p. 10

Strategists are individuals who are most responsible for the success or failure of an organization. They help an organization gather, analyze and organize information. They track industry and competitive trends, develop forecasting models and scenario analyses, identify business threats and develop creative action plans. Strategic planners usually serve in a support or staff role. Usually found in higher levels of management, they typically have considerable authority for decision making in the firm. The CEO is the most visible and critical strategic manager. Any manager who has responsibility for a unit or division, responsibility for profit and loss outcomes, or direct authority over a major piece of the business is a strategic manager (strategist). In the last few years, the position of chief strategy officer (CSO) has emerged as a new addition to the top management ranks of many organizations. This corporate officer title represents recognition of the growing importance of strategic planning in business.

Explain who strategists are and what they do in an organization. Ch 1 p. 9

True

Firms can be more proactive with strategic management Ch 1 p. 15

True

Firms with planning systems more closely resembling strategic-management theory generally exhibit superior long-term financial performance relative to their industries. Ch 1 p. 16-17

True

Firms, like organisms, must be "adept at adapting" or they will not survive. Ch 1

True

Low-performing firms typically underestimate their competitor's strengths and overestimate their own strengths. Ch 1 p. 17

False

Management by intuition can be defined as operating from the "I've-already-made-up-my-mind-don't-bother-me-with-the-facts mode." Ch 1 p. 7

False

Many organizations mistakenly spend more time and effort on the implementation of a plan, than on the formulation of the plan itself. Ch 1

False

Middle managers are generally the most visible and critical of all strategic managers. Ch 1 p. 12

False

Most traditional retailers have tried in vain to use their online sales to boost in-store sales. Ch 1 p. 8

True

Objectives should be measurable, challenging, reasonable, consistent, and clear Ch 1 p. 12

False

Once a firm acquires a competitive advantage, it is usually able to sustain it indefinitely. Ch 1 p. 8

False

Once an effective strategy is designed, modifications are rarely required. Ch 1

False

Optimizing for tomorrow the trends of today is the purpose of strategic management. Ch 1

A) more profitable

Organizations using strategic management are generally ________ than those that do not. A) more profitable B) more complex C) less profitable D) less successful E) less complex Ch 1 p. 17

C) strategic management; strategic planning

Sometimes ________ is used to refer to strategic formulation, implementation and evaluation, with ________ referring only to strategic formulation. A) strategic planning; strategic management B) strategic planning; strategic processing C) strategic management; strategic planning D) strategic management; strategic processing E) strategic implementation; strategic focus Ch 1 p. 5-6

C) objectives.

Specific results an organization seeks to achieve in pursuing its basic mission are A) strategies. B) rules. C) objectives. D) policies. E) tenets. Ch 1 p. 12

A) be proactive

Strategic management enables an organization to ________, instead of just responding to threats in its business environment. A) be proactive B) be immune to threats C) avoid responsibility for shaping its future D) relinquish control over its destiny E) be reactive Ch 1 p. 15

True

Strategists are usually found in higher levels of management and have considerable authority for decision-making in the firm. Ch 1 p. 12

3 stages of Strategic Management

Strategy Formulation (create); Strategy Implementation (do); Strategy Evaluation (monitor) Ch 1 p 5-6 or PPT Ch 1 Slide 7

A) internal and external factors are constantly changing.

Strategy evaluation is necessary because A) internal and external factors are constantly changing. B) the SEC requires strategy evaluation. C) success today is a guarantee of success tomorrow. D) the IRS requires strategy evaluation. E) firms have limited resources. Ch 1 p. 6

True

Strategy implementation is often considered to be the most difficult stage in the strategic-management process. Ch 1 p. 6

True

Substantial research indicates that a healthier workforce can more effectively and efficiently implement strategies. Ch 1 p. 13

A) businesses; individuals

The Internet has transferred power from ________ to ________. A) businesses; individuals B) governments; businesses C) individuals; businesses D) businesses; governments E) individuals; governments Ch 1 p. 8

C) empowerment.

The act of strengthening employees' sense of effectiveness by encouraging and rewarding them for participating in decision-making and exercising initiative and imagination is referred to as A) authoritarianism. B) proaction. C) empowerment. D) transformation. E) delegation. Ch 1 p. 16

False

The best approach for strategists is to carefully develop strategic plans themselves and then present them to operating managers to execute. Ch 1 p. 16

True

The decision to expand or diversify operations is a strategy-formulation issue. Ch 1 p. 5-6

False

The decision to merge is a strategy-formulation issue but the decision to form a joint venture is a strategy-implementation issue. Ch 1 p. 5-6

B) has enabled it to remain financially lean.

The fact that Apple has no manufacturing facilities of its own A) has caused it to build up massive debt on its balance sheet. B) has enabled it to remain financially lean. C) has been problematic for Apple in terms of debt. D) illustrates that having more fixed assets than rival firms can provide major competitive advantages in a global recession. E) means that it is in the same position as Sony. Ch 1 p. 8

False

The final stage in strategic management is strategy implementation. Ch 1 p. 6 (It's Strategy Evaluation)

C) achieve and maintain competitive advantage

The goal of strategic management is to A) achieve competitive advantage. B) maintain competitive advantage. C) achieve and maintain competitive advantage. D) eliminate competitive advantage. E) eliminate and abolish competitive advantage Ch 1

False

The most effective strategic management is ritualistic, predictable, and formal. Ch 1

True

The strengths and weaknesses of an organization are determined relative to the strengths and weaknesses of its competitors. Ch 1

True

The terms strategic management and strategic planning are used synonymously in this text.

D) operating stores with less square footage.

There is a dramatic shift in mass retailing to A) "trading up" and taking customers from more exclusive stores. B) selling only the most expensive merchandise. C) opening dramatically larger supercenters. D) operating stores with less square footage. E) cutting back on their online presence. Ch 1 p. 8

True

To be effective, strategic-management must be a process that familiarizes managers and employees with the key strategic issues facing an organization and the feasible alternatives for resolving those issues. Ch 1

False

U.S. firms are not being aggressively challenged in the computer industry. Ch 1

B) Mission statements

What are enduring statements of purpose that distinguish one business from other similar firms? A) Policies B) Mission statements C) Objectives D) Rules E) Employee conduct guidelines Ch 1 p. 10

C) Policies

What are guides to decision making that address repetitive or recurring situations called? A) Strategies B) Rules C) Policies D) Objectives E) Goals Ch 1 p. 13

A) Strategies

What are the means by which long-term objectives will be achieved? A) Strategies B) Strengths C) Weaknesses D) Policies E) Opportunities Ch 1 p. 12

D) Strategic management

What can be defined as the art and science of formulating, implementing and evaluating cross-functional decisions that enable an organization to achieve its objectives? A) Strategy formulation B) Strategy evaluation C) Strategy implementation D) Strategic management E) Strategic leading Ch 1

C) Strategy implementation

What step in the strategic management process involves mobilizing employees and managers to put strategies into action? A) Strategy formulation B) Strategy evaluation C) Strategy implementation D) Strategic advantage E) Competitive advantage Ch 1 p.6

A) Interpersonal

What types of skills are especially critical for successful strategy implementation? A) Interpersonal B) Marketing C) Technical D) Conceptual E) Visionary Ch 1 p. 6

A) Strategists

Which individuals are most responsible for the success and failure of an organization? A) Strategists B) Financial planners C) Personnel directors D) Stakeholders E) Human resource managers Ch 1 p. 8 bottom of page

A) Developing a vision statement

Which of the following is often considered to be the first step in strategic planning? A) Developing a vision statement B) Establishing goals and objectives C) Making a profit D) Developing a mission statement E) Determining opportunities and threats Ch 1 p. 15

E) All of the above

Which of the following is part of the Strategic-Management Model? A) Measure and evaluate performance B) Develop mission and vision statements C) Establish long-term objectives D) Implement strategies E) All of the above Ch 1 p. 14

Strategy implementation is the most difficult stage in the strategic-management process because it requires personal discipline, commitment and sacrifice. Successful strategy implementation hinges upon managers' ability to motivate employees, which is more of an art than a science. Interpersonal skills are especially critical for successful strategy implementation.

Which stage in the strategic-management process is the most difficult? Explain why. Ch 1 p. 6 - 3rd paragraph

False

While the number of people shopping online has increased, the average amount spent per person online has decreased. Ch 1 p. 8

False

Annual objectives are especially important in strategy formulation Ch 1 p. 12

False

Annual objectives are long-term milestones that organizations must achieve to reach short-term objectives. Ch 1 p. 12

D) more than 100,000

Annually, ________ businesses in the United States fail. A) exactly 100 B) less than 1,000 C) about 10,000 D) more than 100,000 E) almost 10 million Ch 1 p. 17

Most organizations can benefit from strategic management, which is based on integrating intuition and analysis in decision making. Choosing an intuitive or analytic approach to decision making is not an either-or proposition. Managers at all levels in an organization inject their intuition and judgment into strategic-management analyses. Analytical thinking and intuitive thinking complement each other. Operating from the "I've-already-made-up-my-mind-don't-bother-me-with-the-facts" mode is not management by intuition; it is management by ignorance. Drucker says, "I believe in intuition only if you discipline it. 'Hunch' artists, who make a diagnosis but don't check it out with facts, are the ones in medicine who kill people, and in management kill businesses." In a sense, the strategic-management process is an attempt both to duplicate what goes on in the mind of a brilliant, intuitive person who knows the business, and assimilates and integrates that knowledge using analysis to formulate effective strategies.

Discuss the value of integrating intuition and analysis. Ch 1 p. 6-7

A) Formulation

During what stage of strategic management are a firm's specific internal strengths and weaknesses determined? A) Formulation B) Implementation C) Evaluation D) Feedback E) Goal-setting Ch 1 p. 5

A) uncontrollable by a single organization.

Generally, external opportunities and threats are A) uncontrollable by a single organization. B) unable to have a significant impact on an organization. C) not worth monitoring and evaluating. D) key functions in strategy implementation. E) key functions in strategy exploitation. Ch 1 p. 10 bottom of page

C) By involvement in the strategic-management process

How do line managers become "owners" of the strategy? A) By attending top manager meetings B) By executing plans formulated by other people C) By involvement in the strategic-management process D) By becoming a shareholder of the firm E) By buying off top managers Ch 1 p. 16

False

Identifying an organization's existing vision, mission, objectives, and strategies is the final step for the strategic management process Ch 1 p. 14

False

In a multidivisional firm, objectives should be established for the overall company and not for each division. Ch 1

D) finding that less brick and mortar is better.

In mass retailing, big-box companies like Walmart, Best Buy, and Sears are A) gaining competitive advantage over smaller stores. B) participating in a dramatic shift to becoming bigger. C) increasing the square-footage of their retail locations. D) finding that less brick and mortar is better. E) noticing a sharp decline in online purchases. Ch 1 p. 8

True

In most large organizations that engage in strategic management, the formulation, implementation, and evaluation of strategy activities occur at three hierarchical levels: corporate; divisional or strategic business unit; and functional. Ch 1 p. 6 - 6th paragraph

True

In order for a firm to achieve sustained competitive advantage, a firm must continually adapt to changes in external trends and events and effectively formulate, implement, and evaluate strategies that capitalize upon those factors. Ch 1 p. 8

C) created a borderless world with global competitors, customers, and citizens

In recent years, the speedy flow of information through technology has A) made it harder for people worldwide to see how others work and live. B) strengthened national boundaries and made countries more self-contained. C) created a borderless world with global competitors, customers, and citizens. D) ensured that the United States is unrivaled by other companies in all industries. E) made the real flow of financial activity align with political boundaries between countries. Ch 1

C) Implementation

In which phase of strategic management are annual objectives are especially important? A) Reduction B) Formulation C) Implementation D) Evaluation E) Policy Ch 1 p. 6

A) Formulation

In which phase of strategic management are long-term objectives especially important? A) Formulation B) Control C) Evaluation D) Implementation E) Management Ch 1 p. 5

C) strengths

Internal ________ are controllable activities in an organization that are performed especially well. A) opportunities B) incompetencies C) strengths D) objectives E) factors Ch 1 p. 11

There are eight benefits stated by Greenley. Students are to list any five of the following: 1. increased discipline; 2. improved coordination; 3. enhanced communication; 4. reduced resistance to change; 5. increased forward thinking; 6. improved decision-making; 7. increased synergy; 8. more effective allocation of time and resources.

List any five nonfinancial benefits to a firm that engages in strategic management, according to Greenley. Ch 1 p. 17

B) continually changing.

Long-term objectives should be all of the following EXCEPT A) measurable. B) continually changing. C) reasonable. D) challenging. E) consistent. Ch 1 p. 12

E) all of the above

Strategic management focuses on integrating management, ________, and information systems to achieve organizational success. A) marketing B) finance and accounting C) production and operations D) research and development E) all of the above Ch 1

True

Strategic management focuses on integrating management, marketing, finance and accounting, production and operations, research and development, and information systems to achieve organizational success. Ch 1

True

Strategic management is an attempt to organize qualitative and quantitative information in a way that allows effective decisions to be made under conditions of uncertainty. Ch 1

C) is a continuous process.

The strategic-management process A) occurs once a year. B) is a semiannual process. C) is a continuous process. D) applies mostly to companies with sales greater than $100 million. E) applies mostly to small businesses Ch 1

E) all of the above

The strategic-management process is becoming more widely used by A) small firms. B) nonprofit institutions. C) governmental organizations. D) multinational conglomerates. E) all of the above Ch 1

C) logical; systematic; objective

The strategic-management process represents a(n) ________, ________, and ________ approach for determining an enterprise's future direction. A) logical; systematic; subjective B) intuitive; disorganized; subjective C) logical; systematic; objective D) intuitive; disorganized; objective E) inconsistent; systematic; subjective Ch 1

C) It should be coupled with analysis in decision-making.

Which statement best describes intuition? A) It alone should be used in decision-making. B) It represents a minor factor in decision-making integrated with analysis. C) It should be coupled with analysis in decision-making. D) It is better than analysis in decision-making. E) It is management by ignorance. Ch 1 p. 7

B) Strategy implementation

With which phase of strategic management is most strongly associated with "action"? A) Strategy formulation B) Strategy implementation C) Strategy evaluation D) Competing advantages E) Measuring performance Ch 1 p. 6

A) Taking corrective actions

________ is NOT a strategy-implementation activity. A) Taking corrective actions B) Establishing annual objectives C) Devising policies D) Allocating resources E) Motivating employees Ch 1 p. 6