4490 Chapter 1

Which of the following legal developments allow business to function as an institution? (Check all that apply.)

property rights contract enforcement

Which of the following is a tool that managers can use to address the needs of stakeholders while maintaining a competitive advantage?

stakeholder impact analysis

In a nutshell, strategy is the art and science of ______.

success and failure

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 external environment and associated challenges the role of strategic leadership and the strategy process the firm's internal strengths and resources

Strategy is ______.

the set of actions a firm takes to achieve a competitive advantage

Which of the following are the three important stakeholder attributes managers must pay particular attention to during stakeholder impact analysis? (Check all that apply.)

urgency power legitimacy

Which of the following are the relationships that a firm has with stakeholders?

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

A(n) ______ occurs when a firm performs below the industry average or is outperformed by its competitors.

competitive disadvantage

If a firm has a 10% return on invested capital while the industry average return on invested capital is 18%, the firm has a(n) ______.

competitive disadvantage

The concept, or framework, of corporate social _______ guides firms in identifying and addressing their economic, legal, ethical, and philanthropic obligations to society.

responsibility

In the ______ step of the stakeholder impact analysis the firm identifies their stakeholders' interests and claims according to the power, legitimacy, and urgency framework.

second

The field of management that focuses on attaining competitive advantage by combining analysis, formulation, and implementation is known as ______.

strategic management

Andrew's Home Center has created a unique situation for itself in its industry that allows the company to not only provide excellent value to its customers but also control its costs. This is known as ______.

strategic positioning

How should managers prioritize stakeholder concerns in the final step of stakeholder impact analysis?

by considering the power, legitimacy, and urgency of stakeholder claims

sustainable competitive advantage

outperforming competitors or the industry average over a prolonged period of time

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? (Check all that apply.)

philanthropic responsibilities ethical responsibilities

Match the element of the pyramid of corporate social responsibility with its explanation

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

Which statement about strategies is true?

A statement of desire on its own often leads to goal conflict.

What is the first step in the AFI strategy framework?

Analysis

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 ______.

strategy

Customers, suppliers, creditors, unions, and governments are known as ______.

external stakeholders

In the ______ step of the stakeholder impact analysis, managers need to decide the appropriate course of action for the firm in relation to stakeholder concerns.

fifth

In the ______ step of a stakeholder impact analysis, firms identify those stakeholders that currently have, or potentially can have, a material effect on the company.

first

Stakeholder impact analysis is a _____-step process that allows managers to better understand and address stakeholders' needs.

five

In the _____ step of the stakeholder impact analysis, firms identify their various social responsibilities to stakeholders.

fourth

The stakeholders of a firm are ______.

individuals or groups that can affect and are affected by the actions of the firm

A competitive advantage _____.

is assessed relative to other competitors in the industry

Value Creation

occurs when companies with a good strategy are able to provide products or services to consumers at a price point that they can afford while keeping their costs in check, thus making a profit at the same time. Both parties benefit from this trade as each captures a part of the value created.

The third step of stakeholder impact analysis requires managers to identify the ______ presented by internal and external stakeholders.

opportunities and threats

Stakeholders

organizations, groups, and individuals that can affect or are affected by a firm's actions

Microsoft donating more than $3 billion in cash and software to people in need is an example of which type of corporate social responsibility?

philanthropic

Strategic positioning allows managers to ______.

provide customers value while controlling costs

Which of the following statements regarding tasks in the AFI strategy framework is true?

The tasks are very interdependent.

True or false: Firms should obey all the laws, including but not limited to labor, consumer protection, and the environment.

True

Which of the following questions are part of the five steps in stakeholder impact analysis? (Check all that apply.)

What are our stakeholders' interests and claims? Who are our stakeholders? What opportunities and threats do our stakeholders present?

Place the five steps of the stakeholder impact analysis in order, with the first step at the top.

1. Who are our stakeholders 2. What are our stakeholders' interests and claims 3. What opportunities and threats do our stakeholders present? 4. What economic, legal, ethical, and philanthropic responsibilities do we have to our stakeholders? 5. What should we do to effectively address the stakeholders concerns?

Stakeholder impact analysis is a decision tool that helps a company do which of the following? (Check all that apply.)

Achieve a competitive advantage Act as a good corporate citizen

What must a firm do after diagnosing its specific competitive challenge?

Create an effective guiding policy

What are the categories of expectations that society has of the business enterprise as described in the CSR framework? (Check all that apply.)

Economic Philanthropic Ethical Legal

True or false: A statement such as, "We will be the biggest company in the world," is an example of strategy.

False

The Bright Bulb light bulb company produces a line of LED bulbs that customers consider very similar to competitors' LED bulbs. Which of the following conditions must be true for Bright Bulb to have a competitive advantage?

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

In which of the following situations can a firm providing goods and services gain a competitive advantage? (Check all that apply.)

Their offerings provide more value for consumers than competitors' offerings. Their offerings are of similar quality to competitors' offerings but can be sold at lower prices due to lower costs.

Which of the following are aims of stakeholder strategy? (Select all that apply.)

To gain and sustain competitive advantage To manage various stakeholders effectively

When a stakeholder has power over a company it is ______.

able to influence the company to do something it would otherwise not do

Which of the following are primary strategy objectives? (Check all that apply.)

controlling costs creating value

When identifying stakeholders, a firm should focus on those stakeholders that ______.

currently have, or could potentially have, a material effect on the firm

Internet privacy, genetic engineering, and stem-cell research are examples of areas in which a firm's ______ responsibilities exceed its legal responsibilities.

ethical

Starbucks's commitment to fair trade and responsible growing practices indicates that the firm takes its ______ responsibilities seriously.

ethical

competitive parity

performance of two or more firms at the same level

Burger Bomb has been outperforming other burger restaurants for a decade. This indicates that Burger Bomb has which of the following?

a competitive advantage

When a firm implements a strategy that leads to superior performance relative to other companies in the same industry, it is said to have achieved ______.

a competitive advantage

Stakeholder Impact Analysis

a decision tool with which managers can recognize, prioritize, and address the needs of different stakeholders, enabling the firm to achieve competitive advantage while acting as a good corporate citizen

Corporate Social Responsibility (CSR)

a framework that helps firms recognize and address the economic, legal, social, and philanthropic expectations that society has of the business enterprise at a given point in time

Based on its long dominance as a coffeehouse chain, Starbucks has ______.

a sustainable competitive advantage

Michael's Deli is able to perform at the same level as its primary competitor. Michael's Deli has ______.

competitive parity

The idea that firms should voluntarily give back to society when they are able to do so is also known as ______.

corporate citizenship

Which framework helps firms to identify their economic, legal, ethical, and philanthropic obligations to society?

corporate social responsibility

In the second step of the stakeholder impact analysis, managers need to identify and understand stakeholders' ______.

interests and claims

Managers have ______ resources in their quest for competitive advantage.

limited

A firm's attempts to manage the web of relationships between internal and external stakeholders in order to create value is known as ______.

stakeholder strategy

Effective guiding policy is supported by and stays consistent through the use of ______.

strategic commitments

Managers often have to make decisions between two conflicting strategic options, otherwise known as ______.

trade-offs

In the external analysis phase of the AFI strategy framework, managers should ask,

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

Analysis, Formulation, Implementation (AFI) Strategy Framework

A model that links three interdependent strategic management tasks - analyze, formulate, and implement - that, together, help managers plan and implement a strategy that can improve performance and result in competitive advantage

What is the overall purpose of strategic management?

Gain competitive advantage

Who among the following are considered internal stakeholders? (Check all that apply.)

Stockholders Board members Employees

A competitive advantage that lasts for a long period of time is said to be ______.

sustainable

To which types of organizations can we apply the principles of strategic management?

all types of organizations

Which of the four corporate social responsibilities is considered first and foremost for business enterprises?

economic

Among the various types of responsibilities a business firm has, which are specifically considered to be economic responsibilities? (Check all that apply.)

giving investors a return on invested capital repaying debts to creditors

competitive advantage

superior performance relative to other competitors in the same industry or the industry average

In order to determine if Home Depot has a competitive advantage, we must compare Home Depot's performance to ______.

the performance of other firms in its industry

Walmart and Nordstrom maintain very different strategic profiles, one based on cost-leadership and the other based on differentiation through superior customer service. This is an example of ______.

the trade-offs required by strategic positioning

In the ______ step of the stakeholder impact analysis, the firm identifies the opportunities and threats that stakeholders present to the firm.

third

Competitive parity occurs when ______.

two or more firms achieve the same performance results

competitive disadvantage

underperformance relative to other competitors in the same industry or the industry average

A well-devised strategy is about which two things?

what not to do what to do