MGMT 495

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Mara is a management consultant for a soda manufacturer that wants to expand into health drinks such as green tea and after-workout drinks. Based on what you have read, which of these is sensible advice for Mara to offer her client?

"Carefully consider the entry choices over time before making a decision."

During an interview for a CEO position, Elena's potential employers ask her, "If you get this job, will you focus more on industry effects or firm effects?" What should her answer be?

"Firm effects. I will be able to have the most impact on those."

Which of the following statements with regard to industry structures is true?

A consolidated industry tends to be more profitable than a fragmented one.

Which of the following statements is true of corporate strategy?

A corporate strategy must be able to create synergies across business units that are quite different.

solve a problem for a consumer

A customer-oriented vision statement focuses employees to think about how best to:

provide products similar to its competitors, but at lower prices.

A firm is said to gain a competitive advantage when it can:

Which of the following is an example of competitive parity?

A firm produces a similar number of wall clocks at a similar cost as its competitors

organizational structures are aligned with the firm's vision statement

A positive relationship between vision statements and firm performance is more likely to exist when:

Which of the following summarizes the difference between a firm's vision and mission?

A vision states what a firm wants to accomplish; a mission states how a firm plans to accomplish this vision.

Free Winds, Inc. is a company that manufactures a variety of generators that run on wind power. The company envisions that wind technology will replace 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 be able to provide energy produced by sustainable sources.

As manager of a major producer of automobile airbags, you have recently introduced the following vision statement: to protect the health of every driver and passenger. How can you ensure that your employees feel invested in and inspired by the firm's vision? Give a speech explaining why everyone should support the new vision. Hang banners around the production facility touting the new vision statement. Include a "vision adherence assessment" in each employee's annual performance review. Ask employees for feedback on the vision statement and revise based on their input.

Ask employees for feedback on the vision statement and revise based on their input

Ask employees for feedback on the vision statement and revise based on their input.

Which of the following factors most contributes to the U.S. automotive industry being characterized by high entry barriers?

Car manufacturers require large-scale production in order to be cost-competitive.

While implementing strategic group mapping for the U.S. domestic airline industry, two strategic groups become apparent: low-cost, point-to-point airlines (Virgin Atlantic, Alaska Airlines, JetBlue, and Southwest Airlines) versus differentiated airlines using a hub-and-spoke system (American, Delta, and United). Which of the following statements is true about these two strategic groups?

Competitive rivalry between Virgin Atlantic and JetBlue is likely to be higher than that between American and Southwest Airlines.

Managers at Sandburg Real Estate are surprised to hear that interest rates are likely to remain low for the next six months. Which of the following is an implication of low interest rates?

Consumer demand will increase.

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.

Which of the following statements is true of customer-oriented visions? Customer-oriented visions reduce a company's ability to adapt to a changing environment. Customer-oriented vision statements are not the same as listening to your customer. Customer-oriented visions identify how a customer need will be met. Customer-oriented visions define a business in terms of goods or services provided.

Customer oriented vision statements are not the same as listening to your customer

Why is it better for firms to keep their vision statements customer-oriented rather than product-oriented? Customer-oriented visions tend to have a more myopic view of changing environments. Customer-oriented visions tend to have a more short-range view of changing environments. Customer-oriented visions tend to be more flexible when adapting to changing environments. Customer-oriented visions tend to be more stable when dealing with changing environments.

Customer oriented visions tend to be more flexible when adapting to changing environments

Why is it better for firms to keep their vision statements customer-oriented rather than product-oriented?

Customer-oriented visions tend to be more flexible when adapting to changing environments.

Perpetual Batteries recently came under criticism when a newspaper article revealed that the company's production plant had leaked a chemical compound into a sensitive wetland ecosystem. Although use of the chemical was not technically prohibited by law, the local government levied a small fine for cleaning up the spill. Environmental groups, however, argued that continued use of the chemical was damaging to the local wildlife and threatened to organize a boycott against Perpetual Batteries. What should Perpetual Batteries do to ensure that it meets its ethical responsibilities?

Design batteries without the chemical and market them as environmentally friendly.

Carlos is the manager of a graphic design firm, and he relies on a top-down strategic management approach to maintain tight control over the activities of his employees. The company has recently started to lose market share to its more innovative competitors, and Carlos wants to encourage his employees to start contributing to the strategy formulation process to make the company more competitive. Which of the following steps should Carlos take?

Designate Friday afternoons as time for employees to pursue outside interests loosely related to the business.

Fran owns Consolidated Auto Parts, a company that got its start making auto parts related for hybrid vehicles, but her firm has had difficulty establishing itself as a maker of parts for the more-profitable internal combustion engine. What is most likely contributing to Consolidated's problem in this area?

Entry barriers usually protect the incumbent players in a profitable industry.

Etsuro is a management consultant. Baker Corp. asks him to evaluate their company, and he finds that the difference between the cost of producing the firm's products and the value of those products is extremely narrow. What should Etsuro suggest that Baker Corp. management do?

Find a way to widen the gap between cost and value.

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

Hannah is the Chief Operating Officer of the startup AppPalace. In which of the following scenarios does Hannah exhibit strategic leadership?

Hannah schedules a meeting with the manager of the marketing department and overcomes his skepticism about a new campaign aimed at customers in the 55+ age group. Over the next three months, AppPalace gains 250,000 new users in that group.

TriCorp is a major financial services corporation. With the CEO of TriCorp preparing to retire, several top managers are vying for the position. Jared considers himself to be a leading candidate. He not only has advanced degrees from business schools and more than a decade of experience working for TriCorp, but he also has personally ensured that his division has exceeded its performance benchmarks over the past three years, even though many of his employees are dissatisfied because they feel they are stagnating in their jobs. According to the level 5 leadership pyramid, why has Jared failed to exhibit the qualities of a level-5 leader?

He is not able to help others reach their full potential.

delivers low-cost products and services to a specific, narrow part of the market.

In a focused cost-leadership strategy, a firm:

Which of the following statements accurately brings out the difference between monopolistic competition and an oligopoly?

In monopolistic competition, many firms compete against each other; in an oligopoly, there are few large firms competing against each other.

Understanding the Resource Allocation Process (RAP) will have large effects on shaping a firm's realized strategy. Which of the following is an example of such an allocation of resources?

Intel's rule to "maximize margin-per-wafer-start"

It does not indicate how the company will accomplish its goals.

Cobalt Sodas has seen its market share erode in recent years, as consumers increasingly turn toward healthier beverage choices such as unsweetened sparkling water. Hoping to rekindle interest in sugary sodas, Cobalt decides to produce a limited run of "throwback" cans using labeling first introduced in the 1980s. What is wrong with this strategy? It fails to face the competitive challenge. It does not involve concrete actions. It lacks strategic commitments. It tries to be everything to everybody.

It fails to face the competitive challenge

It has a competitive advantage in the industry.

The average cost of production for a bottle of vitamin water in the industry is $4 while its average price is $7. StoreAll Inc. manufactures the same product for $3 per bottle and sells it for $7 per bottle. Which of the following statements is most likely true of StoreAll Inc. in this scenario? It has formed a strategic alliance with other firms in the industry. It has a competitive disadvantage in the industry. It has a competitive advantage in the industry. It has competitive parity with other firms in the industry.

It has a competitive advantage in the industry.

Which of the following is a primary feature of the five forces model?

It views competition within an industry broadly to include forces such as buyers, suppliers, and the threat of substitutes.

Yuki 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, Yuki is in ________ of the Level-5 leadership pyramid.

Level 2

Trung has been an employee with PureEnergy Inc. for 15 years. He started with an entry-level job, and today he is a manager of an entire division. Over the years, Trung has acquired a reputation for doing the right things in the company. Hence, as an efficient leader, he is capable of effectively communicating and motivating his subordinates to work toward the company's vision and mission. According to the Level-5 leadership pyramid, which is the highest level of leadership Trung has reached so far?

Level 4

competitive advantage

Mainline Ltd. is a landline telephone manufacturer whose average return on invested capital is approximately 2 percent. Because demand for landline telephones has declined significantly, the industry average return on invested capital has been negative (-5 percent) for the last few years. In this scenario, Mainline Ltd. has a:

Marigold Servers, a web services firm, has experienced a 7% decline in revenues in consecutive quarters. In an effort to reduce operating costs, managers reduced the customer service staff from 12 employees to 6. Management also enlisted the remaining employees to help produce a new company vision: to give customers of all budgets a customizable, stress-free web hosting experience. What is wrong with this scenario? Marigold's vision is not aspirational. Marigold's organizational structures do not align with the vision. Marigold's vision is not customer-oriented. Internal stakeholders were not invested in defining the vision.

Marigold's organizational structures do not align with the vision

As the strategic manager of CutRite Scissors, you are tasked with producing a strategy for introducing a new line of premium scissors. Your competitor produces a line of similar scissors at a cost of $1 and sells them for $12. Because your company has inferior production capabilities, your scissors will cost $3 each to produce. However, your handle is proven to be more comfortable than your competitors'. Assuming you are guaranteed to sell the same number of units as your competitor, which of the following strategies is most likely to achieve a competitive advantage?

Market CutRite scissors as a higher-quality alternative and sell them for $15.

Toy sales have declined by 10 percent each year, forcing many retailers to exit the industry. To eliminate its remaining competition, Bleaker Toys sells all of its product at a loss and relies on its significant cash holdings to cover costs until its competition is forced to exit the industry. Is this an example of a successful strategy? Why or why not? Yes. Any strategy that forces competition from the market is by definition successful. No. Bleaker has failed to create value for its customers. No. Bleaker's strategy and competitive advantage are unsustainable. Yes. Bleaker has achieved a sustainable competitive advantage by selling its toys at a lower price than competitors.

No. Bleaker's strategy and competitive advantage are unsustainable

Which of the following is an example of a business acting upon an organizational core value? Pegasus Autos reduces engine emissions below federal guidelines to reduce pollution. Pegasus Autos lowers its retail prices to gain an advantage over its closest competitor. Pegasus Autos finances research for developing more powerful engines. Pegasus Autos launches an ad campaign that promotes the company as being environmentally friendly.

Pegasus Autos reduces engine emissions below federal guidelines to reduce pollution

PowerPills is a highly successful vitamin manufacturer. At the close of its most recent fiscal year, the company's balance sheet showed cash holdings of $110 million. Which of the following actions will provide the most benefit for stakeholders?

Reinvest profits into expanding the company and creating more jobs.

Upper management at Softstep Inc., a manufacturer of insoles for shoes, wants to work on improving the product lines it already has without taking on other challenges at this time. Which of the following vision statements reflects that goal? Softstep Inc. wants to provide the best benefits for employees in the insole industry. Softstep Inc. wants to be the best manufacturer of insoles in the industry. Softstep Inc. wants to adapt their insoles to the changing demands of consumers. Softstep Inc. wants to always satisfy the consumers who purchase insoles.

Softstep Inc. wants to be the best manufacturer of insoles in the industry.

long-term oriented

Strategic commitments are actions that are:

Which of the following statements is true of strategic initiatives?

Strategic initiatives can be the result of a response to external trends or come from internal sources.

________ is best described as an integrative management field that combines analysis, formulation, and implementation in the quest for competitive advantage.

Strategic management

Lu runs a company that manufactures satellites for commercial and government use. It has few rivals. At the moment, the power of buyers, the power of suppliers, and the threat of substitutes are all low. Based on this information, what can Lu conclude?

The company is likely to be very profitable as long as the threat to entry is low.

Kimba Inc. is a manufacturer of smart watches that track the wearer's heart rate and sleep patterns. Which of the following is most likely an implication of new firms entering this industry?

The incumbent firms will spend more to satisfy their existing customers.

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

The managers at Lyon Clothing Inc. formulated a strategy that is able to handle small to medium to large increases in the prices of cotton in the future.

Ivan is the founder of a firm producing self-driving vehicles. Because the industry is so new and chaotic, Ivan favors a top-down strategic planning approach in which he exerts strong control over all aspects of the business, from product development and design to manufacturing and marketing. What is wrong with this scenario?

The self-driving vehicle industry is changing too much for the top-down approach to be effective.

How are cumulative learning and experience effects of a company most likely to affect Michael Porter's five forces?

Threat of new entrants will be low.

competitive disadvantage

Under-performance relative to other firms in the same industry or the industry average results in a(n) ________ for a firm.

Bethany is a chef who owns three moderately successful restaurants with innovative menus. Based on what you have read, which of these approaches could help her improve her profits?

Use her existing knowledge, equipment, and staff to launch a catering business.

Which of the following provides an example of what AFI strategy framework is used for?

Using AFI, the Gasquet Motor Company was able to implement a strategy that produced high-quality cars more efficiently and thereby reduced costs.

the increase in value creation exceeds the increase in costs.

Value drivers contribute to a firm's competitive advantage only if:

stuck in the middle

When a blue ocean strategy goes bad, a firm has neither a clear differentiation nor a clear cost-leadership profile. This situation is referred to as:

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.

Strategy

________ is best described as a set of goal-directed actions a firm takes to gain and sustain superior performance relative to competitors.

Economies of scale

________ is best described as decreases in cost per unit as output increases.

Minimum efficient scale

________ is best described as the output range needed to bring down the cost per unit as much as possible, allowing a firm to stake out the lowest-cost position that is achievable through economies of scale.

A _____ is best described as any activity a firm pursues to explore and develop new products and processes, new markets, or new ventures. A. strategic initiative B. value chain C. supply chain D. corrective action

According to the Level-5 leadership pyramid, a manager at Level 3 has acquired the ability to: A. organize resources effectively to accomplish predetermined goals. B. build enduring greatness into the organizations he or she leads. C. identify the vision and the mission of the company. D. justify unethical activities as legal and ethical.

According to the Level-5 leadership pyramid, a manager in Level 1 typically: A. makes productive contributions through motivation, talent, knowledge, and skills. B. works effectively with others to achieve synergies and team objectives. C. presents compelling vision and mission to guide groups toward superior performance. D. builds enduring greatness into the organizations he or she leads.

_____ is best described as a strategy process in which organizational structure and systems allow bottom-up strategic initiatives to emerge and be evaluated and coordinated by top management. A. Planned emergence B. Scenario planning C. Top-down strategic planning D. Reverse engineering

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

Which of the following is an element of good strategy? an approach that underestimates the competition a set of coherent actions to implement the firm's guiding policy a guiding policy to address employee satisfaction a summary of the firm's history within its industry

a set of coherent actions to implement the firm's guiding policy

Which of the following is the best characterization of sociocultural forces?

a society's culture, norms, and values

Luz manages a chain of bars and restaurants in a tri-county area that has recently experienced an economic boom because of fracking and high oil prices. What is most likely to happen when there is too much money in the tri-county economy?

an increase in prices

Teddiez Inc. is a company that manufactures and sells stuffed toys. It sources its materials from another country to keep costs low. A sales personnel in one of its retail stores noticed that there was increasing concern regarding the potential toxicity of the materials in the dolls. In response, she found an economical, organic, and non-toxic cloth filling that the company could use. When her manager learned about this, he presented the prospect and got it approved from the top management team. This is an example of the: A. top-down strategic planning approach. B. planned emergence approach. C. scenario planning process. D. reverse engineering process.

To support the rise of emergent strategies, an organization should: A. centralize decision-making and all other activities. B. empower lower-level employees to take up autonomous actions. C. limit serendipity that is in the form of random events and accidental happenstances. D. rely solely on hard data to formulate strategies.

Top-down strategic planning as an approach to the strategic management process will be most effective when the: A. environment is constantly changing. B. size of the firm is large. C. probability of black swan events is high. D. top management wants to decentralize decision making.

Which of the following reasons justifies the view that functional managers should be allowed to initiate strategic initiatives based on autonomous actions? A. Functional managers have more control and power in the organization than corporate executives. B. Functional managers are much closer to the final products, services, and customers than corporate-or business-level managers. C. Functional managers have a bigger role in identifying a company's vision and mission than the strategic leaders. D. Functional managers are Level-5 managers in the Level-5 leadership pyramid when compared to the executives who are at Level-4.

To be effective, firms need to pursue visions that are exclusively financial and not aspirational. increase their strategic flexibility by developing product-oriented vision statements. isolate top managers from the organizational values. back up their visions with strategic commitments that are costly and difficult to reverse.

back up their visions with strategic commitments that are costly and difficult to reverse

A firm always has a competitive disadvantage when its return on invested capital is below the industry average. declining steadily over two or more years. about the same as its closest competitor. 2 percent or lower in a declining industry.

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.

A company uses the planned emergence approach in the development of its strategies. Which of the following is an implication of this? A. The employees will be isolated from the process of setting the company's vision and mission. B. The lower-level employees will be restricted to the tasks involved in strategic implementation. C. The company's organizational structure and systems will be designed to support bottom-up strategic initiatives. D. The top management will create a strategy that is based on hard data alone, rather than an inspiring vision.

Lower-level employees focus mainly on _____ when a firm is using top-down or scenario planning as an approach to the strategic management process. A. strategy formulation B. strategy analysis C. strategy implementation D. strategy initiation

If Zephyr Electronics obtains an 18 percent return on invested capital, which of the following will help determine if it has a competitive advantage over other pharmaceutical companies?

comparing the return to the return on invested capital obtained by other firms in the industry

If Zephyr Electronics obtains an 18 percent return on invested capital, which of the following will help determine if it has a competitive advantage over other pharmaceutical companies? evaluating the liquidity ratios for other pharmaceutical companies comparing the return to the return on invested capital obtained by other firms in the industry assessing the value based on the shareholders' expectations of return on their capital comparing the value to the history of the firm's return of investment over a number of years

comparing the return to the return on invested capital obtained by other firms in the industry

A firm that achieves superior performance relative to other firms in the same industry or the industry average has a(n) competitive advantage. power position. equity leverage. balanced scorecard.

competitive advantage

A firm that achieves superior performance relative to other firms in the same industry or the industry average has a(n)

competitive advantage.

The pharmaceutical company Merck's new drug Vioxx was a blockbuster, generating revenues of $2.5 billion a year by 2002 and growing fast. When allegations that the drug caused heart attacks and strokes began to appear in the medical community, and that Merck had suppressed evidence about Vioxx's dangerous side effects from early clinical trials, Merck announced the voluntary withdrawal of Vioxx from the market. In this example, Merck provides an example of what can happen if a company deviates from its

core values.

Strategic leadership pertains to the use of power and influence by ________ to direct the activities of others when pursuing an organization's goals.

corporate executives

While creating its AFI strategy framework, Valdez Consultants decided what markets the firm should compete in. By doing this, what type of strategy did the company devise?

corporate strategy

Strategic commitments are actions that are

costly, long-term oriented, and difficult to reverse.

In Strategy Highlight 2.2, what type of strategy did Diana, the Starbucks store manager in southern California, use to develop the new iced beverage for her store? A. She used a rational planning approach to strategy planning. B. She created a dominant strategy plan. C. She used scenario planning. D. She used an emergent strategy.

Understanding the Resource Allocation Process (RAP) will have large effects on shaping a firm's realized strategy. Which of the following is an example of such an allocation of resources? A. Starbucks' launch of iced drinks B. Teach For America's mission statement C. Merck's voluntary withdrawal of Vioxx from the market D. Intel's rule to "maximize margin-per-wafer-start"

The first step to gain and sustain a competitive advantage is to

define a firm's vision, mission, and values.

Fuller Apparel's core value statement reads we will ensure our clothing is made with the highest respect toward human rights and environmental protection. Which of the following actions exemplifies how Fuller's core values drive its strategic decision making? investing in more efficient machinery to reduce costs and lower prices for consumers purchasing a full-page advertisement in a major newspaper touting the company's values demanding that textile suppliers pay livable wages and maintain safe production facilities introducing an online customer service unit to keep customers happy

demanding that textile suppliers pay livable wages and maintain safe production facilities

In the pyramid of corporate social responsibility, ________ responsibilities are the foundational building block.

economic

The amount of xylene that can be used in household paint is legally limited to 0.03 percent. Anything beyond this amount is hazardous to health and the environment, and considered a legal offense. Consequently, CW Paints Corp. has vouched to make its products as safe as possible. Therefore, it manufactures xylene-free paints even though this increases its costs and reduces the dividends paid to its shareholders in the long run. Which of the following responsibilities is CW Paints Corp. primarily compromising in this scenario?

economic responsibilities toward its shareholders

The production head at the Omnitone Paint Company would frequently stay back after office hours and experiment with new color combinations even though this was part of the new product development team's job. As a result of these experiments, he came up with two new interior paint colors, foggy morning and mint julep. The new colors proved popular among test groups, and quickly became some of Omnitone's best-selling products. Which of the following strategies does this scenario best illustrate?

emergent strategy

The founder of T-Square Construction strongly believes in the notion of corporate social responsibility, so he has proposed a number of philanthropic activities that he expects the company to pursue. In order to accomplish this vision, the managers should first

ensure that the company is profitable and has a sustainable competitive advantage.

The interaction between a firm and its diverse internal and external stakeholders is best described as a(n)

exchange relationship.

Windmill Inc., a vendor, regularly supplies capacitors to Inland Electronics for use in its products. Therefore, Windmill Inc. is Inland Electronics'

external stakeholder.

A strategic group will typically include

firms within the same industry.

Strategies developed at the departmental level, such as the accounting, human resources, production, and marketing departments, within a strategic business unit are referred to as ________ strategies.

functional

The distribution department at Golden Grains Wheat Company has decided to adopt the FIFO (first in, first out) method of inventory to dispatch its bags of wheat. Which of the following strategies does this scenario best illustrate?

functional strategy

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

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

As a part of strategy formulation, a firm's functional strategy primarily concerns questions relating to

how to implement business strategy.

The first step in stakeholder impact analysis involves

identifying the stakeholders that currently have, or potentially can have, a material effect on a company.

In which of the following situations is a company that exists in the telecommunications industry most likely to face the highest threat of entry?

if the industry has recently become deregulated

With the emergence of smartphones, users no longer have to carry a separate music player, a video game, a laptop, or a magazine to keep themselves entertained when traveling. A smartphone is loaded with a variety of applications to satisfy all the customer needs that different industries or products individually satisfied earlier. As a result, the smartphone industry has been posing a threat to a lot of other unrelated industries. What is this phenomenon best known as?

industry convergence

After carefully assessing the market potential for solar-powered mobile devices, the top-level executives of Futuretronics Inc. decided that the company would be launching a line of solar-powered tablets within the next two years. This would mean that the tablet division would need to immediately begin research and development efforts. Which of the following strategies in the planned emergence model does this best illustrate?

intended strategy

Soil and Sod Gardening Supplies has a vision of helping every American learn how to grow their own food. Its management team recently unveiled the mission statement "A garden at every home." What is wrong with this mission statement? It does not include a stretch goal. It is not inspirational and motivating for employees. It does not indicate how the company will accomplish its goals. It is too specific.

it does not indicate how the company will accomplish its goals.

Green Jeans, Inc. had a mission to become the leading producer of environmentally friendly blue jeans, an emerging and in-demand category in the apparel industry. Its strategy involved leveraging a network of organic cotton farmers and suppliers of environmentally responsible synthetic materials to create a product that is durable, attractive, affordable, and 100% recyclable. However, because it did not upgrade its outdated production facilities, Green Jeans could not assemble its products at a low-enough cost to offer the jeans at a price that was attractive to customers. Green Jeans' strategy failed because

it was not backed up with strategic commitments.

Economies of scale are cost advantages that accrue for firms with

larger output.

Which of the following is a macroeconomic factor that can affect a firm's strategy?

levels of employment

Quick Market Inc. is a food supply company that wants to sell its products directly to consumers through mail order instead of going through supermarkets and other stores. However, supermarket chains want to make this transaction either illegal or more difficult for Quick Market. To accomplish this, they are using ________ to influence the political process.

lobbying forces

Strategic commitments are actions that are inexpensive. long-term oriented. easy to imitate. easy to reverse.

long term oriented

Jamie is a manager in an industry that has a few large players and that has remained relatively stable over the past few years. He finds out that legislators are proposing new laws to deregulate the industry. If the laws pass, which of these scenarios will Jamie most likely face?

many new competitors

Clear Calls Inc., a telephone service provider, has a large user base mainly because phone calls and messages between all Clear Calls users are free. When a person switches to a Clear Calls network, his or her entire network of family and friends is likely to switch to the same network to receive the benefit of free calls and messages. In addition, an existing user who gets a new user to register with Clear Calls Inc. is given a free wireless connection. This has helped to keep competition away from Clear Calls. In this scenario, which of the following factors is acting as an entry barrier for Clear Calls Inc.?

network effects

Magical Productions is a large production company that controls a major portion of the television industry's market share along with two other firms. Despite its competitiveness with the two other firms, it is influenced by their actions and often has to consider their strategic actions before acting on its own. In this scenario, Magical Productions is most likely functioning in a(n) ________ industry.

oligopolistic

Eon Inc., Electravia Inc., and FC Inc., the three largest firms in the consumer electronics industry, hold close to 85 percent of the industry's market share. These companies mainly compete against each other by providing unique features in their products rather than pricing them low. These firms are interdependent, and each firm must consider the strategic actions of its competitors. Which of the following industry competitive structures does this scenario best illustrate?

oligopoly

Three large firms dominate the telecommunication industry of United Canava: AD Telecom Inc., Mystic Telecom Corp., and Total Talk Inc. Instead of cutting prices competitively, these firms have resorted to non-price competition through branding and product differentiation. Which of the following industry competitive structures are these companies most likely in?

oligopoly

The management of Toshi Manufacturing 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. product-oriented vision scenario planning upper-echelons theory organizational core values

organizational core values

________ are best described as the ethical standards and norms that govern the behavior of individuals within a firm. Corrective controls Job descriptions Organizational core values Customs duties

organizational core values

During an AFI planning session, the managers of the Fukuhara Motorcycle Corporation decided to place various stages of production in different countries in order to implement the strategy of cutting overhead costs. By doing this, what issue did the firm address?

organizational design

A positive relationship between vision statements and firm performance is more likely to exist when

organizational structures are aligned with the firm's vision statement.

Competitive rivalry based solely on ________ is destructive to firms as it transfers most of the value created in the industry to the customers.

price-cutting

Noodles 2 Go and Sal's Trattoria are two restaurants serving Italian cuisine. While Noodles 2 Go focuses on providing quick, affordable pasta dishes for the lunch crowd, Sal's Trattoria focuses on serving home-style dishes in an upscale, romantic setting. Both companies have been able to gain a competitive advantage. This is most likely because the companies have pursued distinct strategic positions. entered into a cartel arrangement. engaged in direct imitation and substitution. benefitted from economies of scale.

pursued distinct strategic positions

Which of the following strategies does Tesla need to implement or achieve to gain a competitive advantage?

reinvest profits to build successively better electric automobiles

InTex manufactures medical devices. The firm's profitability depends on several variables that are subject to occasional change, including the cost of parts and labor, changes in medical practices, and the price of oil used in both manufacturing and shipping. To account for the potential impact of changes to any of these variables, InTex managers should implement a(n) ________ approach.

scenario planning

As the legal owners, ________ have the most legitimate claim on a company's profits.

shareholders

Top-down strategic planning as an approach to the strategic management process will be most effective when the

size of the firm is large

Top-down strategic planning as an approach to the strategic management process will be most effective when the

size of the firm is large.

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.

If a company wants to gain a competitive advantage in a highly competitive industry, it should ideally copy the strategies of other firms through competitive benchmarking. stake out a unique position within the industry. provide goods or services similar to its competitors at higher prices. execute an integrated cost-leadership and differentiation position.

stake out unique position within the industry

BlueStainless Corp. has been able to gain and sustain a competitive advantage due to its strong relationship with its employees, customers, suppliers, and local communities. The company believes in lifetime employment and ensures that its employees grow along with the company. Investors are more than satisfied with the returns on their investments. Also, 3 percent of the company's profit is spent on community development. With initiatives like these, customers feel privileged to associate themselves with BlueStainless products. This scenario best illustrates the implementation of a

stakeholder strategy.

The former CEO of Sam's Club, a division with its own profit-and-loss responsibility, Rosalind Brewer, reported to Walmart's CEO, C. Douglas McMillon, who as corporate executive oversees Walmart's entire operations. Sam's Club, therefore, is a ________ of Walmart.

strategic business unit

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, Eva Morris exhibited her strong commitment toward the company's core value that customers' well-being is more important than profit when she convinced the board of directors to liquidate the company's pesticide subsidiary. The pesticide brand sold by her company was a major revenue earner in lesser-developed nations, but studies indicate that it is a carcinogen. Eva persuaded the board that the company had to be responsible toward society. In this scenario, Eva has demonstrated

strategic leadership.

FindFor Inc. is an e-commerce retail firm that sells a variety of merchandise online. Through services like cash on delivery, easy return, and online tracking, the company has created more customer value than its competitors (brick-and-mortar businesses) at the same price. Also, the company's costs are substantially lower than its competitors because of minimal investments in operation and administration. In this scenario, FindFor Inc. has most likely been able to provide superior value and cost control through strategic positioning. strategic profiling. strategic liquidation. strategic parity.

strategic positioning

strategic positioning.

Strategic thinking is different from strategic planning in that

strategic thinking includes all types of information sources while strategic planning does not.

________ is best described as a set of goal-directed actions a firm takes to gain and sustain superior performance relative to competitors. Strategy Credo Behavior modification Competency management

strategy

According to AFI strategy framework, in which of the following tasks of strategic management is a firm's vision, mission, and values identified? strategy formulation strategy analysis strategy implementation strategy control

strategy analysis

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

strategy analysis

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

strategy analysis

Zenya is the founder of an online service that allows users to rent out spare rooms in their homes. She has hired a number of extremely bright employees whose opinions are central to the company's success in the fast-paced online services industry. Which type of strategic management process would be most likely to fully utilize the strengths embodied by her team and position the company to capitalize upon autonomous actions and serendipity?

strategy as planned emergence

In ________, a firm frames a guiding policy to address the competitive challenge.

strategy formulation

In ________, a firm frames a guiding policy to address the competitive challenge. strategy formulation strategy implementation strategy control strategy analysis

strategy formulation

Through ________, a firm puts its guiding policy into practice by employing a set of coherent actions.

strategy implementation

Which of the following tasks in the AFI strategy framework involves putting the formulated strategy into practice through organizational structure, culture, and controls?

strategy implementation

Powell Lighting was the first company to start selling LED light bulbs in its country—a product that gained popularity among diverse groups. Soon, other companies started to sell their own brands of LED bulbs, thereby giving Powell Lighting ample competition. In response, Powell Lighting decided to limit its LED light bulbs to outdoor models. However, it ensured that these models were the longest-lasting and lowest-priced on the market. With this innovation, Powell Lighting consistently outperformed its competitors for ten years. In this scenario, Powell Lighting maintained a ________ through its innovative strategy.

sustainable competitive advantage

Due to economic regression in Freedonia, the profitability of the large corporation Happiness Products Inc. (HPI) was poor. An analysis of the company's business showed that the company could become profitable if it divested a few strategic business units under its banner. From which of the following businesses would HPI find it most easy to exit?

the e-commerce retail business, where investments on assets are low

The internet service provider industry in the country of Megalopolis is an industry characterized by the presence of strong network effects, high brand loyalty, high economies of scale, and proprietary technology among incumbent firms. Thus, in the internet service provider industry, the

threat of new entrants is most likely low.

The Founder of Teach for America, Wendy Kopp, wants to make teaching an attractive option for promising young professionals. Identify the phrase that represents the vision she developed for Teach for America. to improve standardized test scores across the board to encourage parents to take a more active role in their children's education to cut wasteful spending from education budgets to give all children in the United States the opportunity to attain an excellent education.

to give all children in the United States the opportunity to attain an excellent education

to give all children in the United States the opportunity to attain an excellent education.

Which of the following vision statements is most likely to produce a sustainable competitive advantage for an auto dealership?

to help our customers find the perfect car for their individual needs.

Questions asked during the strategy analysis stage of the AFI framework include "How does the firm make money?" and "What effects do forces in the external environment have on the firm's potential to gain and sustain a competitive advantage?" T/F

true

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

During strategy implementation, managers primarily focus on deciding the

type of corporate governance that is most effective and ways in which it can put the formulated strategy into practice.

Molly Hue Apparels Inc. (MHA) had been outsourcing its production to less-developed countries in order to reduce its cost of production. With the emergence of its competitor, Hova Inc., MHA lost its competitive advantage. Hova had its production units in its home country that allowed the company to bring out the latest trends to the market earlier than MHA. Also, MHA frequently suffered due to political instability and lack of intellectual property laws in the outsourced countries. Thus, parts of MHA's strategies became obsolete and it had to relocate its production. What are such obsolete strategies referred to as in the planned emergence model?

unrealized strategy

The CEO of Mabel Automobiles was the child of parents who had difficulty making enough money to support their family. As a result, he and his siblings did not have access to many advantages that children from wealthier families had. This CEO, therefore, emphasized making affordable, low-maintenance vehicles that could be bought by low-income households. Which of the following does this example demonstrate?

upper-echelons theory

When do employees fail to adopt the organizational values of a firm?

when the top managers in the firm are merely paying lip service to the firm's stated values

Differentiation

Beach Grub is a chain of "fast casual" restaurants that sells its menu items at higher prices than its competitors. Yet, the restaurant has a large customer base due to its wide product portfolio and superior customer service. Which of the following generic business strategies has Beach Grub adopted in this scenario?

Marigold's organizational structures do not align with the vision.

Which of the following is an assumption that top-down strategic planning rests on? A. We can predict the future from the past. B. Time cannot be compressed at will. C. Decisions made in the past do not affect our future. D. Change is constant.

White Leo Autos manufactures and markets four different cars, Leo Sport, Leo Prestige, Leo Spark, and Leo Ease. These four product variants are operated as individual business units. While the product leaders of Leo Sport, Leo Prestige, and Leo Spark have adopted a differentiation strategy to attract the niche market, the product leader of Leo Ease follows a cost-leadership strategy to suit the mass market. This decision of the product leader of Leo Ease can be ideally categorized as a _____. A. corporate strategy B. functional strategy C. business strategy-how to compete D. tactical strategy

To implement specific business strategies, general managers of strategic business units rely on: A. external stakeholders. B. corporate executives. C. strategic leaders. D. functional managers.

As a part of strategy formulation, corporate strategy concerns questions relating to: A. why we should compete. B. how to compete. C. where to compete. D. how to implement the business strategy.

Blue Ocean

In a successful ________ strategy, the trade-offs between differentiation and low cost are reconciled.

value drivers

Product features, customer service, and complements are all examples of important:

define a firm's vision, mission, and values.

The first step to gain and sustain a competitive advantage is to:

A(n) _____ is best described as a standalone division of a larger conglomerate, with its own profit-and-loss responsibility. A. corporation B. strategic business unit C. affiliate company D. functional department

the tension between value creation and the pressure to keep costs in check

Which of the following best describes a strategic trade-off?

a set of coherent actions to implement the firm's guiding policy

Which of the following is an element of good strategy?

According to the Level-5 leadership pyramid, a manager turns into an executive who is capable of building lasting greatness into the organization through a combination of will power and humility when he or she reaches _____. A. Level 5 B. Level 3 C. Level 2 D. Level 1

After carefully assessing the market potential for hybrid cars, it was decided at the corporate headquarters of Unidawn Autos Inc. that the company would be launching a hybrid version of all its car models within the next two years. This would mean that each strategic business unit under the company would be involving in its own research and development efforts. Which of the following strategies in the planned emergence model does this best illustrate? A. Intended strategy B. Emergent strategy C. Unrealized strategy D. Tactical strategy

As the CEO of a conglomerate, Juana Mark exhibited her strong commitment toward the company's core value that customer's 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 the society. In this scenario, Juana has demonstrated _____. A. strategic leadership B. intrapreneurship C. Machiavellianism D. individualism

Carrvour Inc. is a company that manufactures steel, cement, cars, and consumer electronics under a single brand. The top management at Carrvour has decided to enter the banking and insurance industry based on its assessment of the profit potential in that industry. Which of the following strategies does this best illustrate? A. Corporate strategy B. Business strategy C. Functional strategy D. Divisional strategy

In a large company, who is most responsible for devising the corporate strategy? A. The CEO of the company B. The lower-level employees in the company C. The head of the production department in the company D. The human resource manager in the company

A(n) _____ is best described as the strategic option that top managers decide most closely matches the current reality and which is then executed. A. bottom-up emergent strategy B. executive summary C. realized strategy D. dominant strategic plan

Strategic thinking is different from strategic planning in that: A. strategic thinking includes all types of information sources while strategic planning does not. B. strategic thinking relies more on hard data than strategic planning. C. strategic thinking is regimented and confining, whereas strategic planning is more flexible. D. strategic thinking can create an illusion of control, whereas strategic planning avoids this.

The CEO of True West Products Inc. (TWC) is a company that sells a wide range of products. It has decided to enter the markets of emerging nations like China and Brazil. This means that the cars, consumer electronics, and services such as hotels included under the TWC banner would be made available in these nations. Which of the following strategies does this scenario best illustrate? A. Corporate strategy-where to compete -W-W B. Functional strategy C. Business strategy D. Divisional strategy

The Chief Executive Officer (CEO) of PepsiCo, Indra Nooyi, subscribes to a triple-bottom-line approach to competitive advantage—considering not only economic, but also social and environmental performance. Based on this, which of the following is a mission of PepsiCo? A. Including healthy choices in its lineup B. Performing with a purpose C. Focusing on only the nonalcoholic beverages line of business D. Splitting PepsiCo into two standalone companies each focusing on beverages and snack foods respectively

The executives at Red Couture Inc. are developing strategic plans to address plausible future situations like rise in the prices of cotton and synthetic fabrics by 20 percent, appreciation in the value of dollar, increase in the cost of labor by 30 percent, and increase in demand for the company's products. By doing so, the company will be well-prepared with its planned responses if any of these situations occurs in the future. Thus, Red Couture is employing _____ as the approach to the development of strategy. A. scenario planning B. top-down strategic planning C. reverse engineering D. pattern recognition

The first step in the strategic management process is to: A. define a firm's vision, mission, and values. B. understand the strategies of the competitors. C. put the guiding policies of a firm into practice. D. develop functional and business level strategies.

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? A. Functional strategy B. Corporate strategy C. Master strategy D. Business strategy

To be effective, firms need to: A. back up their visions with strategic commitments that are costly and difficult to reverse. B. increase their strategic flexibility by developing product-oriented vision statements. C. isolate top managers from the organizational values. D. pursue visions that are exclusively financial and not aspirational.

Unrealized strategy is when parts of a firm's intended strategy is: A. nonfunctional due to unexpected events. B. not revealed to the lower-level employees. C. implemented and controlled by front-line employees. D. planned to tackle some unforeseen events.

Which of the following functions do the general managers in strategic business units primarily perform? A. Design generic business strategies based on guidelines received from corporate headquarters B. Set overarching strategic objectives to unify the entire conglomerate under one mission C. Take responsibility for decisions and actions within a single functional area D. Allocate scarce resources among different business divisions

Which of the following statements about product-oriented visions is true? A. They tend to force managers to take a myopic view of the landscape. B. They allow companies to effectively adapt to changing environments. C. They define a business in terms of providing solutions to customers. D. They allow firms to take a need-based approach to their goals.

Which of the following statements is true of strategic initiatives? A. Strategic initiatives can be the result of a response to external trends or come from internal sources. B. When lower-level employees are less empowered, the possibility of strategic initiatives is higher. C. Strategic initiatives result from top-down planning by executives and not through a bottom-up process. D. Random events and accidental happenstances reduce the possibility of strategic initiatives in organizations.

_____ are primarily responsible for decisions and actions within their respective departments like finance, human resources, marketing, and production in a strategic business unit. A. Functional managers B. Corporate executives C. Strategic leaders D. General managers

A company's strategic business unit: A. does not need to adopt the overall corporate strategy. B. is responsible for its own profit and loss. C. is a division solely created to design strategies during turbulent times. D. decides which industries and markets to compete in for an entire conglomerate.

According to the upper-echelons theory, the organizational outcomes of a company primarily reflect the values of the _____. A. production workers in the company B. CEO of the company C. housekeeping staff in the company D. external stakeholders of the company

Gerald has been an employee with GeoFuture Inc. for 15 years. He started with an entry-level job, and today he is a manager of an entire division. Over the years, Gerald has acquired a reputation for doing the right things in the company. Hence, as an efficient leader, he is capable of effectively communicating and motivating his subordinates to work toward the company's vision and mission. According to the Level-5 leadership pyramid, which is the highest level of leadership Gerald has reached so far? A. Level 5 B. Level 4 C. Level 3 D. Level 2

In the top-down strategic planning approach, all strategic intelligence and decision-making responsibilities rest primarily on the _____. A. functional managers B. chief executive officer C. external stakeholders D. general manager

Orange Synergy Inc. is a company that manufactures a variety of products that run on solar power. The company wants to ensure that solar technology replaces all forms of exhaustible energy sources in the near future. Which of the following statements will make an accurate vision for Orange Synergy? A. We make products that run on solar energy. B. All nations around the globe should have access to a sustainable energy source. C. The company aims to make working fun and pleasurable for its employees. D. We provide energy-efficient sources and services by investing in research and innovation.

Organizational values are the _____ that govern the behavior of individuals within a firm or organization. A. economic measures B. ethical standards and norms C. political principles and policies D. social beliefs and actions

Strategic commitments are actions that are: A. inexpensive. B. long-term oriented. C. easy to reverse. D. easy to imitate.

The production head at the canned juice unit of True Foods Inc. would frequently stay back after office hours and experiment with new fruit juice flavors though this was part of the new product development team's job. As a result of these experiments, he came up with two new flavors of fruit juices, cherry-melon and melon-mint. After rigorous test marketing, which proved that the market would accept the new drinks, the product variants were successfully launched. Which of the following strategies does this scenario best illustrate? A. Intended strategy B. Emergent strategy C. Unrealized strategy D. Tactical strategy

Visionary companies are able to outperform their competitors because: A. their vision statements are more product-oriented. B. they provide more aspirational visions. C. their visions are exclusively financial. D. they isolate internal stakeholders in defining their visions.

When do employees fail to adopt the organizational values of a firm? A. When the internal stakeholders of the firm are involved in designing the values B. When the top managers in the firm are merely paying lip service to the firm's stated values C. When the strategic leaders in the firm propagate and exhibit the same values D. When the organizational structure, such as its strategic decision making, is aligned with its values

Which of the following best illustrates a strategic business unit (SBU)? A. The human resource department of a large company that is responsible for hiring employees for all its divisional branches B. The consumer electronics division of a large company that also manufactures automobiles, apparel, and processed food C. The product development team at the headquarters of a fast-food chain D. The market segment which can be categorized between the income levels $10,000 and $25,000

Which of the following statements accurately brings out the difference between top-down strategic planning and scenario planning? A. While in top-down strategic planning a top-down approach is used to develop strategies, in scenario planning a bottom-up approach is used. B. Scenario planning helps create strategic plans that are more flexible, and thus more effective, than those created through the more static strategic planning approach. C. While top-down strategic planning takes place at both the corporate and business levels of strategy, scenario planning takes place only at the corporate level. D. Top-down strategic planning addresses only pessimistic futures, whereas scenario planning addresses only optimistic futures.

Which of the following statements is true of corporate strategy? A. The objective of corporate-level strategy is to ensure that the sum of the values of individual business units is greater than the overall corporate value. B. A corporate strategy must be able to create synergies across business units that are quite different. C. Formulating a corporate strategy involves general managers answering questions relating to how to compete in order to achieve superior performance. D. Deciding whether to adopt a differentiation or a cost-leadership strategy is part of formulating the corporate strategy.

Which of the following statements is true of customer-oriented visions? A. Customer-oriented visions identify how a customer need will be met. B. Customer-oriented vision statements are not the same as listening to your customer. C. Customer-oriented visions reduce a company's ability to adapt to a changing environment. D. Customer-oriented visions define a business in terms of goods or services provided.

Which of the following statements is true of top-down strategic planning? A. Information flows both ways in the process, from the upper management to the lower management and also the other way around. B. In this process, the formulation of strategy is separate from implementation. C. Employees at the operation level have major responsibility in strategizing for competitive advantage. D. The process is based on the assumption that the past cannot be used to predict the future.

_____ is best described as a rational process in which executives at a company's headquarters take primary responsibility to program future success of the company they lead. A. Bottom-up strategic approach B. Top-down strategic planning C. Reverse mentoring D. Emergent strategic plan

As a part of strategy formulation, a firm's functional strategy primarily concerns questions relating to: A. where to compete. B. when to compete. C. how to implement business strategy. D. how to enter target markets.

A positive relationship between vision statements and firm performance is more likely to exist when: A. visions are product-oriented. B. internal stakeholders are isolated from defining and revising the visions. C. organizational structures are aligned with the firm's vision statement. D. vision statements are equivalent to listening to the customers.

A traditional top-down strategic planning process typically begins with: A. employees at the operational level identifying problems within an organization. B. functional managers formulating functional strategies for their respective departments. C. strategic leaders adjusting a company's vision and mission based on environmental analysis. D. employees who have close contact with customers taking autonomous actions.

An intended strategy is best described as: A. a combination of its top-down strategic intentions and bottom-up emergent strategy. B. any unplanned strategic initiative undertaken by mid-level employees of their own volition. C. the outcome of a rational and structured, top-down strategic plan. D. a strategy developed at the lower levels of management to tackle unpredictable events.

Any unplanned strategic initiative undertaken by mid-level employees of their own volition is a(n) _____. A. dominant strategic plan B. unrealized strategy C. emergent strategy D. intended strategy

Blue Bird Products Inc. (BBP) 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? A. Corporate strategy B. Business strategy C. Functional strategy D. Grand strategy

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? A. Ethan is currently a team lead in the company. B. Ethan shows no signs of being a good leader. C. Ethan is a top management executive in the company. D. Ethan has just started his career as a member of a team in the company.

How are the two approaches namely strategic planning and scenario planning different from strategy-as-planned-emergence approach? A. Strategy as a planned emergence model was introduced before strategic planning and scenario planning. B. Unlike strategic planning and scenario planning, strategy as a planned emergence model does not begin with a strategic plan. C. 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. D. Unlike strategic planning and scenario planning, strategy as a planned emergence model is a rational top-down planning approach.

Organizational values help individuals make choices that are: A. legal but unethical. B. both illegal. C. both ethical and effective in advancing a company's goals. D. ethical but ineffective in achieving long-term success.

Red Million Inc. is a large company that sells a variety of products such as apparel, jewelry, canned foods, consumer electronics, and automobiles. Apart from this, the company also has a strong presence in the service industry through its chain of hotels, fast food restaurants, and amusement parks. Each of its product divisions operates as an individual business and is responsible for its own profits and losses. Thus, these product divisions under Red Million can be referred to as _____. A. limited liability companies B. functional departments C. strategic business units D. corporations

Richard is a manager. His colleagues and subordinates look up to him as a man who always does the right things. Along with other skills, his ability to effectively organize and deploy resources like manpower, material, and money has been appreciated by his seniors. According to the Level-5 leadership pyramid, which of the following levels would be the immediate next step for Richard? A. Level 2 B. Level 3 C. Level 4 D. Level 5

The _____ is a conceptual framework that views organizational outcomes—strategic choices and performance levels—as reflections of the values of the members of the top management team, who interpret situations through the lens of their unique perspectives. A. two-factor theory B. expectancy theory C. upper-echelons theory D. value orientation theory

The pharmaceutical company Merck's new drug Vioxx was a blockbuster, generating revenues of $2.5 billion a year by 2002 and growing fast. When allegations began to appear in the medical community, Merck announced the voluntary withdrawal of Vioxx from the market. In this example, Merck provides an example of what can happen if a company deviates from its _____. A. voluntary responsibilities B. realized strategy C. core values D. strategic decisions

True Help is a non-profit organization that works toward rehabilitating the homeless. The credo of the organization is "help us help you." For an organization like True Help, which of the following statements would make an appropriate mission? A. Help us help you find a home. B. One day, everyone in this nation will have a home to protect themselves. C. We help the homeless gain and sustain financial independence by providing employment opportunities. D. Our mission is to turn this not-for-profit organization into a for-profit organization so that the stakeholders are benefited.

Unplanned strategic initiatives taken by the _____ within an organization will be referred to as an emergent strategy. A. suppliers and vendors of the organization B. shareholders of the organization C. team leads of project teams in the organization D. corporate executives in the organization's headquarters

Which of the following is a customer-oriented vision? A. To be the most progressive insurance company B. To be the best automobile company in the world C. To enable people throughout the globe to identify their capabilities D. To manufacture innovative products through continuous learning

Which of the following is a top-down approach to the development of strategy that involves asking "what if" questions to anticipate plausible futures? A. Top-down strategic planning B. Bottom-up strategic thinking C. Scenario planning D. Reverse mentoring

Which of the following methods of developing a strategy best illustrates scenario planning? A. Based on the previous year's profits, the CEO of Kelvon Inc. decided to adopt an expansion strategy in its home market. B. A sales personnel of GL Foods Inc. suggested that the company should introduce a baked version of its potato wafers to cater to the needs of the increasing health-conscious population. C. The managers at Vion Autos Inc. formulated a strategy to tackle any increase in the prices of aluminum sheets in the future. D. The CEO of DHP Inc., a large conglomerate, has decided to enter the Asian market based on the competitor's success in the same market.

Cuisine Pro Inc. is a company that manufactures consumer electronics like refrigerators, washing machines, and dishwashers. Which of the following best illustrates a product-oriented vision for Cuisine Pro? A. To make people's life simple and easy B. To allow everyone to have the luxury of domestic technology C. To help people save time and energy spent on household chores D. To be the pioneering manufacturer of home and kitchen appliances

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 _____. A. business strategy B. divisional strategy C. functional strategy D. corporate strategy

Nathan 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, Nathan is in _____ of the Level-5 leadership pyramid. A. Level 5 B. Level 4 C. Level 3 D. Level 2

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? A. GH Medicines's vision is more product-oriented than the vision of Pioneer Pharma. B. Pioneer Pharma is more likely to have a positive relationship between its vision and firm performance than GH Medicines. C. Pioneer Pharma's vision is more long-term and futuristic than GH Medicines's vision. D. GH Medicines will be more flexible than Pioneer Pharma when adapting to changing environments.

Scenario planning typically begins with managers: A. developing different strategic plans to address possible future scenarios. B. building a portfolio of future strategic options. C. executing a dominant strategic plan. D. brainstorming to identify multiple plausible futures.

Strategic flexibility is achieved when managers: A. choose to keep their vision statements more product-oriented rather than customer-oriented. B. respond to reality changes by activating alternate dominant plans or modifying the old plan. C. implement static top-down strategic planning approach to the development of strategy. D. overlook pessimistic future scenarios and only prepare for optimistic futures.

Strategic leadership pertains to the use of power and influence by _____ to direct the activities of others when pursuing an organization's goals. A. production workers B. lower-level managers C. external stakeholders D. corporate executives

Strategies developed at the departmental level, such as the accounting human resource, production, and marketing departments, within a strategic business unit are referred to as _____. A. grand strategies B. corporate strategies C. business strategies D. functional strategies

T & R Autos Inc. is a large conglomerate that operates in 12 different countries. The corporate executives at the headquarters have decided that the company's objective for the next two years will be to increase its customer equity. Based on this guideline received from the top management team, the product leader of the home appliances division has decided to adopt a cost leadership strategy in all his 12 units. Thus, the decision made by the product leader best illustrates a _____. A. corporate strategy B. functional strategy C. grand strategy D. business strategy

The Chief Executive Officer (CEO) of PepsiCo, Indra Nooyi, subscribes to a triple-bottom-line approach to competitive advantage—considering not only economic, but also social and environmental performance. Identify the phrase that represents the vision of PepsiCo as described by Ms. Nooyi. A. Human sustainability B. Environmental sustainability C. The whole person at work D. Performance with a Purpose

The critics of top-down strategic planning and scenario planning argue that: A. the strategies developed through these approaches are primarily based on an inspirational vision and not on hard data. B. these approaches do not believe that we can predict the future from the past. C. the development of strategies through these approaches is highly dependent on experience of front-line employees. D. these approaches do not allow for the necessary strategic thinking.

The regional head for First Electronics Inc. in New Dalvia has decided to sell the company's products directly through company-owned stores because the distribution system in the market is primitive. In six other markets, however, the company will continue to operate through a franchise system. Thus, this decision made by the regional head at New Dalvia will be considered as a _____. A. corporate strategy B. tactical strategy C. functional strategy D. business strategy

Top-down strategic planning works best when the: A. events in the future are highly unpredictable. B. past cannot be used to predict the future. C. lower-level employees in an organization are highly empowered. D. environment does not change much.

When parts of a firm's intended strategy fall by the wayside due to unpredictable events, it turns into a(n) _____. A. tactical strategy B. dominant strategy C. emergent strategy D. unrealized strategy

Which of the following best describes a Level-5 manager in the Level-5 leadership pyramid? A. Gina is an employee who just started her career GL Inc.; she has already been appreciated for her knowledge and skills in the new company. B. Derek is an employee at One Triangle Inc.; he has helped his team achieve their targets by contributing to the team's efforts. C. Harry is part of the marketing team at JB Corp.; he has been given the charge of managing a team of three based on which he will be promoted to a manager's position next month. D. Walter is the CEO of Red Autos Inc.; he has helped his company in gaining and sustaining a competitive advantage through ethical decision making.

Which of the following managers in the Level-5 leadership pyramid are most capable of leading their organizations into great success by guiding the organizations toward building a sustainable competitive advantage? A. Level 1 B. Level 2 C. Level 3 D. Level 5

Which of the following strategies best illustrates a functional strategy? A. The CEO of Dawn Companies Inc. has decided that the company will be entering the Asian market. B. The general manager of a product division of Aster Products Inc. has decided that 30 percent of the division's annual profits will be invested in research and development. C. The regional manager for the consumer electronics division of Dawson & Co. has decided that the division will pursue backward integration to save costs. D. The production manager at the apparel division of Style Culture Co. has decided that the department will hire contract workers for three months to meet the temporary demand.

Which of the following strategies best illustrates a generic business strategy? A. A cost-cutting strategy that corporate executives in the headquarters want all business units of a large conglomerate to implement B. A strategy to use monetary incentives to motivate employees working on a project C. A decision to computerize a firm's database in order to improve customer service D. A decision to niche market the jewelry sold by a company while the apparel division under the same company sells its products through mass marketing

Who among the following is responsible for making business strategies in a large conglomerate? A. The board of directors at the headquarters B. The shareholder of the company C. The lower-level employees in the company D. The general managers of individual business units

_____ are best described as the ethical standards and norms that govern the behavior of individuals within a firm. A. Job descriptions B. Customs duties C. Corrective controls D. Organizational values

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