BA 405: Chapter 1 Homework
Emotional intelligence is a term used to describe a group of psychological attributes that strong and effective leaders exhibit. Which of these is an emotional intelligence attribute? a. Self-regulation b. Dialectic inquiry skills c. Vision and eloquence d. Reasoning by analogy
a. Self-regulation
Which of these mission statements is customer-focused? a. AutoNation: To be America's best run, most profitable automotive retailer. b. General Electric: To invent the next industrial era, to build, move, power and cure the world. c. Nike: To bring inspiration and innovation to every athlete in the world. d. Google: To organize the world's information and make it universally accessible and useful.
c. Nike: To bring inspiration and innovation to every athlete in the world.
Which of the following statements about cognitive biases is true? a. The bias of representativeness arises from our predisposition to estimate the probability of an outcome based on how easy the outcome is to imagine. b. The bias of the availability error is rooted in the tendency to generalize from a small sample or even a single, vivid anecdote. c. An awareness of cognitive biases allows managers to analyze whether the decision is being made strategically or relying on a "rule of thumb" or heuristic. d. The benefits of using heuristics in decision making far outweighs any drawbacks of cognitive biases that may occur.
c. An awareness of cognitive biases allows managers to analyze whether the decision is being made strategically or relying on a "rule of thumb" or heuristic.
The idea that the strategy-making process is constantly ongoing and adapting over time with the input of additional information is: a. autonomous action. b. scenario planning. c. the feedback loop. d. a SWOT analysis.
c. the feedback loop.
Which of the following steps precedes a SWOT analysis in the strategic planning process? a. Engaging in ivory tower planning b. Formulating a viable business model c. Implementing the strategic goals for the organization d. Crafting an organization's mission statement
d. Crafting an organization's mission statement
According to this text's authors, Hill and Schilling, which of these would be considered an important step in a formal strategic management process? a. Building the company's organizational chart of strategic leaders b. Research and development into the company's first prototype product c. Market research surveys of customer attitudes toward the recent product launch d. Defining the company's corporate mission and major corporate goals Hide Feedback
d. Defining the company's corporate mission and major corporate goals
In articulating what a company does in terms of its customers, their needs, and through what core competencies, managers first formulate the company's: a. vision statement. b. mission statement. c. SWOT analysis. d. emergent strategies.
b. mission statement.
Mickey is the CEO of a multidivisional company who has determined that it is time for the company to revisit its strategic plan and is working on the agenda for the meeting, beginning with a review of the company's mission, vision, and values. On day 2, Mickey plans to conduct an analysis of internal and external forces affecting the company. The invitee list for the strategic planning session includes the CFO, the COO, the vice president of human resources, and the vice president of sales. Mickey believes this smaller team will be able to reach a greater consensus and be efficient in developing the strategic plan for the next five years. Which potential pitfall could impact the strategic plan for this company? a. An "ivory tower" approach could lead the executive team to a plan created in a vacuum without an understanding of current operating realities. b. The cognitive bias of the illusion of control could lead the CEO to believe the leadership role means being the only person to direct the company's strategic plan. c. The utilization of outside view could lead the strategic plan to exclude data that doesn't reinforce the team's preconceived ideas about the company's direction. d. The scenario planning approach could lead the company to split its focus and prevent any meaningful progress toward the development of a competitive advantage.
a. An "ivory tower" approach could lead the executive team to a plan created in a vacuum without an understanding of current operating realities.
Lake, the vice president of sales and marketing for a software development company, has been working with the sales force in recent months to develop a promotion strategy to sell obsolete software quickly at a reduced price rather than the original suggested price. Which strategic manager role is Lake fulfilling with this approach? a. Functional-level manager b. Corporate-level manager c. Business-level manager d. Chief Financial Officer (CFO)
a. Functional-level manager
Experts who study strategic leadership have identified the key characteristics of high-performing leaders. Which of these is a characteristic for strategic leadership? a. Willingness to delegate and empower b. Devil's advocacy c. Decentralized planning d. Autonomous action
a. Willingness to delegate and empower
A business-level manager in a multidivisional company is: a. a strategic manager who is the head of an entire division, responsible for translating the corporate strategy into concrete strategies for the business unit. b. a strategic manager responsible for a specific business function, such as marketing or human resources. c. a member of the Board of Directors, responsible for setting the strategic direction for the entire multi-divisional company. d. a vice president, C-suite, or other company officer, responsible for the financial performance of the company across all business units.
a. a strategic manager who is the head of an entire division, responsible for translating the corporate strategy into concrete strategies for the business unit.
All of the following would be part of a business model that outlines strategies for a company wanting to achieve competitive advantage EXCEPT: a. the changes to be made in the external environment. b. the creation of value for its customers. c. the production of specific goods or services. d. the organization of activities within the company.
a. the changes to be made in the external environment.
The hubris hypothesis of takeovers is a term that describes: a. the overconfidence of leaders in their ability to create value by acquiring another company. b. a strategic plan for building a company through mergers and acquisitions. c. a commitment by managers to continue investing in a strategic plan even after they have received information that the project is failing. d. a manager deciding an acquisition is the right choice for a company because serendipity put the other firm in his or her path. Hide Feedback
a. the overconfidence of leaders in their ability to create value by acquiring another company.
All of the following are examples of a cognitive bias that can lead to poor strategic decisions EXCEPT: a. willingness to delegate. b. illusion of control. c. escalating commitment. d. confirmation bias.
a. willingness to delegate.
Binh was recently named general manager of a newly created business unit of a multidivisional company. His first order of business will be to implement the new division's strategic plan. Which of these statements about Binh's responsibilities for the company is true? a. Binh isn't concerned with the performance of the other business units in his company. The other general managers are on their own. b. Binh works with managers within his business unit to develop and implement concrete strategies for his division that align with corporate goals. c. Binh should spend the majority of his time concerned with the human resources operations of his business unit, focusing on the employee team. d. Binh will manage the entire corporation's finance structure, working with the finance directors of each division to implement the company's strategies.
b. Binh works with managers within his business unit to develop and implement concrete strategies for his division that align with corporate goals.
Which parts of the SWOT analysis deal with the external environment and which parts deal with the internal environment? a. External: strengths and opportunities. Internal: weaknesses and threats. b. External: opportunities and threats. Internal: strengths and weaknesses. c. External: scenario planning. Internal: vision and values. d. External: strengths and weaknesses. Internal: threats and opportunities. Hide Feedback
b. External: opportunities and threats. Internal: strengths and weaknesses.
A leader's use of power can influence his or her overall effectiveness as a strategic manager. Which of these statements is true? a. Edward Wrapp says that effective leaders should use their power in a dictatorial fashion to ensure team members understand who the final decision maker is. b. Jeffrey Pfeffer explains that ultimately a manager's power comes from his or her control over resources, such as budgets, capital, positions, information, and knowledge. c. Jeffrey Pfeffer believes that only those with a title and official position can exert power within an organization. d. Edward Wrapp argues that organizational leaders do not have anything in common with political leaders and should not behave democratically. Hide Feedback
b. Jeffrey Pfeffer explains that ultimately a manager's power comes from his or her control over resources, such as budgets, capital, positions, information, and knowledge.
Which of these is a definition for an emergent strategy making process? a. A process that leaves strategies up to chance and happenstance, waiting for technological discoveries, acquisition opportunities, and changes in the industry environment to drive action b. Strategies that evolve as the unplanned responses to unforeseen circumstances, arising from autonomous action by individual managers, serendipitous events, and changed circumstances c. A strategy process that utilizes "what-if" scenarios to arrive at a company's corporate strategy, including multiple views of the company's future state d. Planning that relies on rules of thumb and cognitive biases to define strategies that will be successful despite a competitive industry environment
b. Strategies that evolve as the unplanned responses to unforeseen circumstances, arising from autonomous action by individual managers, serendipitous events, and changed circumstances
Which of these could be an example of a competitive advantage? a. The status of a company with the largest top line sales number in an industry b. The ability of a firm to outperform its rivals by achieving greater profitability and growth than others in the industry c. A solid company with predictable sales and profitability every year, delivering predictability for its shareholders d. A start-up company with an innovative new product that changes an industry
b. The ability of a firm to outperform its rivals by achieving greater profitability and growth than others in the industry
Scenario planning is one methodology strategic managers can use to avoid pitfalls in their planning process. In scenario planning, managers: a. plan a sequence of events that a manager will execute in order, regardless of the circumstances or changing industry environment. b. create a what-if scenario for the future and develop strategic options associated with that future state. c. develop a single, deliberate strategy through an organized process with its top leaders. d. change directions, adapt a strategy, or develop a new strategy based on the results of an accidental event or unexpected opportunity.
b. create a what-if scenario for the future and develop strategic options associated with that future state.
There are four main categories of strategies that managers may define to create and sustain a competitive advantage. Which of these is an example of a business-level strategy? a. A finance director developing a plan to improve the return on invested capital (ROIC) by negotiating more favorable payment terms with customers and vendors b. A CEO of a multidivisional company selecting a new customer market segment to pursue and establishing a new business unit to serve the segment c. A general manager defining a superior customer service strategy for his division to better deliver its products d. The vice president of human resources approving a 10% increase in staff in the company's Midwest division
c. A general manager defining a superior customer service strategy for his division to better deliver its products
Strategic managers may believe that they have to choose between what is best for the shareholders versus what is best for the company's customers and employees to achieve a competitive advantage. However, there is good evidence to suggest that the best way to maximize the return to shareholders is to focus on the customers and employees. Which of these scenarios is an illustration of that evidence? a. A manufacturing business routinely hires full-time employees to fill seasonal spikes in demand and then cuts their hours during slow times to lower costs and continue to pay high shareholder dividends. b. A restaurant company decides to operate with fewer employees, causing customer service to suffer, in order to increase its return to shareholders. c. A tech company determines that it should pay its top-performing employees above-market wages, decreasing shareholder returns in the short-term. But the employee longevity pays off through sustained research and development and breakthrough products that result in sales growth and lower recruitment costs. d. An airline decides to revamp its loyalty program to create more blackout dates, ensuring it can sell more tickets at full price and return greater profitability to shareholders. Customers call to complain and stop utilizing the loyalty program.
c. A tech company determines that it should pay its top-performing employees above-market wages, decreasing shareholder returns in the short-term. But the employee longevity pays off through sustained research and development and breakthrough products that result in sales growth and lower recruitment costs.
Logan is an entrepreneur with a new idea for a software product. His start-up company grows quickly to a team of about 25. A new federal law recently passed by Congress will cause the software to become obsolete without a major change in the programming. The investment in the programming is going to be costly, and the company faces some hard choices. Logan announces a move back to his programming roots and an intention to work alongside the software development team, taking the salary of a programmer, to ensure that the newest version of the software will be compliant with the new law. Which of these characteristics of an effective leader is Logan demonstrating the most? a. Being well informed b. Willingness to delegate and empower c. Commitment d. Outside view
c. Commitment
There are multiple techniques for improving decision making in the formulation and implementation of strategic plans. Which of these is a means of improving decision making? a. Reasoning by analogy b. Emphasizing all the reasons a proposal is unacceptable using dialectic inquiry c. Comparing a strategic plan against previous similar plans and reviewing the results of those experiences to gain an outside view d. Imagining the outcome and results of your strategic plan and deciding it will work because you believe there will be positive results
c. Comparing a strategic plan against previous similar plans and reviewing the results of those experiences to gain an outside view
Adrian is vice president for product management at a Brazilian-based skin care company. As a functional leader, Adrian led a strategy planning process with his team to create a new tan-enhancing cream. After a thorough strategy process, the team built consensus around a deployment plan for this new product. They introduced the tan enhancer to a regional segment of the marketplace as a prototype. Sales were dismal. After some focus groups, the team learned that consumers were not interested in it. But Adrian didn't give up, insisting the team continue to promote the product, pushing a deployment plan and launching to the entire market, along with a robust and expensive television and magazine ad campaign. Just like during the regional trial, it was a dismal failure with limited sales. The executive team suggested that Adrian's strategy planning was flawed in selecting this type of new product as the core of his strategy. Consider the potential techniques for improving decision making that Adrian could have utilized to avoid defects in his planning process. a. Astute use of power: Adrian could have shut down the entire strategy by unilaterally deciding it was not workable. b. Representativeness: Adrian could have insisted that the team continue to sell because he saw data from a small subsection of the sample that liked the product. c. Devil's advocacy: Adrian could have assigned one member of his team to identify potential problems with the plan and present them to team members, who would agree to take them into consideration. d. Escalating commitment: Adrian could have rescued the project by assigning additional team members to it and giving it more time.
c. Devil's advocacy: Adrian could have assigned one member of his team to identify potential problems with the plan and present them to team members, who would agree to take them into consideration.
An HVAC contractor is considering expanding into a new business line, offering commercial facility maintenance and service in addition to construction contracting services. As the contractor considers this potential strategy, it conducts a strategic planning process for this business unit, analyzing external and internal factors. Which of these can be classified as a part of the external operating environment of the company? a. The company has a handful of HVAC technicians with prior experience working for a service firm. b. The skills required to construct, assemble, and install HVAC equipment currently possessed by the contractor's employees would be required to service the equipment in existing buildings. c. Local commercial properties are most often served by one of three big national HVAC service firms and a handful of local smaller firms. d. Selling HVAC services is different from selling construction services. The contractor's team doesn't have anyone with experience selling to facilities managers.
c. Local commercial properties are most often served by one of three big national HVAC service firms and a handful of local smaller firms.
Rowan is the manager of sales and marketing for one of the organization's products. He was invited to participate in the strategic planning process for launching a new type of sunglasses to the millennial market. Rowan, age 25, was excited to be able to contribute to this product because he liked these new sunglasses and, when he showed them to his three best buddies, they also liked them. During the planning session, Rowan convinced the team that they did not need to conduct expensive focus groups to test the viability of the sunglasses. Rowan also convinced the team that the glasses would sell because of the numerous compliments he received when wearing a pilot pair of the sunglasses. Ultimately, the management team decided to go with Rowan's strategy and did not conduct focus groups before launching the new product. Which cognitive bias was at work in this situation? a. Illusion of control b. Escalating commitment c. Representativeness d. Reasoning by analogy
c. Representativeness
A nonprofit organization is considering holding a series of sessions to develop its mission, vision, goals, operation model, and strategic plan. Differentiate between planning for charities versus for companies. How will the process be different for the nonprofit? a. Nonprofit organizations do not conduct strategic planning. This meeting would be primarily symbolic for the charity's stakeholders to energize them and help them feel like they're involved in the cause. b. A nonprofit organization will not utilize a SWOT analysis or employ strategic managers at a variety of levels to participate in their strategic planning process. c. The strategic goals of the organization will include a combination of performance goals toward the charity's mission, revenue, and fundraising goals. d. The nonprofit organization will be most concerned about creating a strategic plan that creates a high income for its board of directors.
c. The strategic goals of the organization will include a combination of performance goals toward the charity's mission, revenue, and fundraising goals.
Chris is a mid-level manager who has been working with an executive coach to become a better leader within his organization. One of Chris's goals has been to develop his emotional intelligence. Recently, Chris scheduled a meeting with a challenging objective - to inform his team of employees that the executive team has decided to abandon the project they've been working on. When Chris discusses the situation with the team, which of these approaches would best demonstrate emotional intelligence? a. Chris should inform them all that the project they are working on is no longer aligned with the company and that all of their work has been in vain. b. Chris should take a few promising leaders aside and tell them first that the project is being killed but that their jobs are safe, and then announce the change in direction to everyone else and tell them that their inferior work is the reason management is stopping the project. c. Chris should blame the executive management for killing this project and tell everyone on the team that he was passionate about their work, the company is dropping the project anyway. d. Chris should start by complimenting the team on their hard work on the project so far and then explain that the company is shifting direction and is no longer pursuing the project. He should have as much information as is available for the employees on how this change will affect their job status.
d. Chris should start by complimenting the team on their hard work on the project so far and then explain that the company is shifting direction and is no longer pursuing the project. He should have as much information as is available for the employees on how this change will affect their job status.
Which of these is characteristic of a well-constructed goal? a. My company's goal is to create a more diverse employee base. We've decided we want to attract employees of different races, but our management team is uncomfortable with any kind of system that would count the number of employees we have of different races. b. My company's CEO has many pet projects. She's thinking about starting side businesses that are unrelated to our core competency and has set goals surrounding these new areas. c. My company has decided that we will pursue a goal to become the largest, ranked by revenue, grocery retailer in North America within three years. We currently operate 50 stores in five states. d. My company has set a goal of launching five new products each year for the next five years through at least a 10% annual investment in research and development.
d. My company has set a goal of launching five new products each year for the next five years through at least a 10% annual investment in research and development.