Chapter 1 SB

What is the first step in the AFI strategy framework? a. Acceptance b. Analysis c. Assurance d. Application

b. Analysis

Which framework helps firms to identify their economic, legal, ethical, and philanthropic obligations to society? a. SWOT analysis b. Corporate social responsibility c. Strategic management framework d. AFI framework

b. Corporate social responsibility

To which types of organizations can we apply the principles of strategic management? a. Privately owned companies only b. Nonprofit organizations only c. All types of organizations d. Governmental agencies

c. All types of organizations

In the ______ step of a stakeholder impact analysis, firms identify those stakeholders that currently have, or potentially can have, a material effect on the company. a. Fourth b. Fifth c. First d. Third e. Second

c. First

The overall purpose of a firm's strategy is to ______. a. Generate significant interest from foreign investors b. Determine demand for new product ideas c. Sell all existing inventory of a given product d. Perform better than other companies in the same industry

d. Perform better than other companies in the same industry

What must a firm do after diagnosing its specific competitive challenge? a. Create an effective guiding policy b. Identify its primary competitors c. Collect investments from stockholders d. Implement a set of coherent actions

a. Create an effective guiding policy

Stakeholder impact analysis is a _____-step process that allows managers to better understand and address stakeholders' needs. a. Five b. Three c. Four d. Two

a. Five

Effective guiding policy is supported by and stays consistent through the use of ______. a. Strategic commitments b. Trade-offs c. Social responsibilities d. Grandiose statements

a. Strategic commitments

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. This is known as Burger Bomb's ______. a. Strategy b. Vision c. Competitive parity d. Core values statement

a. Strategy

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? a. The bulbs must be on the market for a longer period of time than competitors' bulbs b. The bulbs must be more expensive than competitors' offerings c. The bulbs must be sold by online retailers only d. The bulbs must have a lower cost than competitors' bulbs

d. The bulbs must have a lower cost than competitors' bulbs

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 - Decide where to compete - Describe the role of functional managers in strategy formulation

- Achieve a competitive advantage - Act as a good corporate citizen

Which of the following elements comprise strategic management? - Definition - Analysis - Implementation - Formulation - Realization

- Analysis - Implementation - Formulation

Which of the following are primary strategy objectives? - Strengthening relationships - Maximizing sales - Controlling costs - Creating value

- Controlling costs - Creating value

The expectations that society has toward business, in contrast to what society requires, result in which of the following elements of the pyramid of corporate social responsibility? - Economic responsibilities - Philanthropic responsibilities - Legal responsibilities - Ethical responsibilities

- Philanthropic responsibilities - Ethical responsibilities

Which of the following are the relationships that a firm has with stakeholders? - Stakeholders can affect the firm's actions - The stakeholders generally have no interest in the firm - The firm controls the action of staekholders - The actions of the firm can affect stakeholders

- Stakeholders can affect the firm's actions - The actions of the firm can affect stakeholders

Which of the following topics should be considered during the analysis phase of the AFI framework? - The firm's business model and competitive advantages - The firm's internal strengths and resources - The external environment and associated challenges - The locations in the world where the firm should compete - The role of strategic leadership and the strategy process

- The firm's business model and competitive advantages - The firm's internal strengths and resources - The external environment and associated challenges - The role of strategic leadership and the strategy

Place the five steps of the stakeholder impact analysis in order, with the first step at the top. Who are our stakeholders? What opportunities and threats do our stakeholders present? What are our stakeholders' interests? What should we do to effectively address the stakeholder concerns? What economic, legal, ethical, and philanthropic responsibilities do we have to our stakeholders?

1. Who are our stakeholders? 2. What are our stakeholders' interests? 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?

Match the element of the pyramid of corporate social responsibility (on the left) with its explanation (on the right). Corporate Social Responsibility: - Philanthropic responsibilities - Ethical responsibilities - Legal responsibilities - Economic responsibilities Explanation: - Do what is right, just, and fair - Laws and regulations are society's codified ethics; define minimum acceptable standard - Corporate citizenship - Gain and sustain competitive advantage

Philanthropic Responsibilities - Corporate Citizenship Ethical Responsibilities - Do what is right, just, and fair Legal Responsibilities - Laws and regulations are society's codified ethics; define minimum acceptable standard Economic Responsibilities - Gain and sustain competitive advantage

In the external analysis phase of the AFI strategy framework, managers should ask, a. "How do external forces affect our strategy and competitive advantage?" b. "How does the firm make money?" c. "What is the relationship between competitive advantage and firm performance?" d. "What effects do internal resources, capabilities, and core competencies have on the firm's competitive advantage?"

a. "How do external forces affect our strategy and competitive advantage?"

A stakeholder has ______ when its needs are within the bounds of the law or are otherwise relevant to the firm. a. A legitimate claim b. Power over a company c. An urgent claim d. A false claim

a. A legitimate claim

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 ______. a. Strategic positioning b. The competitive challenge c. Competitive disadvantage d. Competitive parity

a. Strategic positioning

In a nutshell, strategy is the art and science of ______. a. Maintaining a work-life balance b. Amassing wealth c. Success and failure d. Treating people fairly

c. Success and failure

Sustainable competitive advantage exists when a firm ______. a. Is self-regulated and self-motivated b. Formulates and implements strategy c. Starts up and competes for existing market share in the industry d. Maintains superior performance relative to its industry over a longer period of time

d. Maintains superior performance relative to its industry over a long period of time

Strategic positioning allows managers to ______. a. Eliminate competition in a given industry b. Provide superior customer value regardless of costs c. Balance foreign and domestic sales d. Provide customers value while controlling costs

d. 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. a. Fourth b. Second c. First d. Third e. Fifth

b. Second

Which of the following statements regarding tasks in the AFI strategy framework is true? a. The tasks happen in sequence as separate steps b. The tasks are very interdependent c. The tasks are interchangeable d. Only two of the tasks need to be followed for success

b. The tasks are very interdependent

When a stakeholder has power over a company it is ______. a. Helping to implement the firm's strategy b. Helping to improve the sales of the company by implementing new strategies c. Able to get the company more profit d. Able to influence the company to do something it would otherwise not do

d. Able to influence the company to do something it would otherwise not do