Business Policy Chapter 1

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

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

Stakeholder impact analysis is a decision tool that helps a company do which of the following?

Achieve a competitive advantage Act as a good corporate citizen

What is the first step in the AFI strategy framework?

Analysis

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

Create an effective guiding policy

strategic commitments

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

What is the overall purpose of strategic management?

Gain competitive advantage

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

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

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.

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

The tasks are very interdependent.

In which of the following situations can a firm providing goods and services gain a competitive advantage?

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

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

To manage various stakeholders effectively To gain and sustain competitive advantage

When does a situation of competitive parity exist?

Two or more firms achieve the same performance results.

Strategic Management

What is the field of management that focuses on attaining competitive advantage by combining analysis, formulation, and implementation?

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 Blank______.

a competitive advantage

A stakeholder has Blank______ when its needs are within the bounds of the law or are otherwise relevant to the firm.

a legitimate claim

In a(n) Blank______ strategy formulation, managers focus on deciding HOW the firm should compete.

business

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

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

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

competitive parity

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

corporate social responsibility

Which of the following are primary strategy objectives?

creating value controlling costs

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

external stakeholders

Using a(n) Blank______ strategy formulation, managers examine where and how the firm should compete around the world.

global

Managers have ______ resources in their quest for competitive advantage.

limited

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

all types of organizations

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

corporate citizenship

A competitive advantage ______.

is assessed relative to other competitors in the industry

Which of the following elements of the pyramid of corporate social responsibilities are result from a society's expectations toward business?

philanthropic responsibilities ethical responsibilities

Among the various types of responsibilities a business firm has, which are specifically considered to be economic responsibilities?

repaying debts to creditors giving investors a return on invested capital

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

responsibility

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

What term describes the groups or individuals who can impact or be impacted by a firm's actions? Multiple choice question.

stakeholders

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

Burger Bomb has been outperforming other burger restaurants in recent years. This indicates that Burger Bomb has which of the following?

A competitive advantage

In a nutshell, strategy is the art and science of

success and failure

A well-devised strategy is about which two things?

what not to do what to do

Who among the following are considered internal stakeholders?

Employees Board members Stockholders

What are the categories of expectations that society has of the business enterprise as described in the CSR framework?

Ethical Philanthropic Legal Economic

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

Who are our stakeholders? What are our stakeholders' interests? What opportunities and threats do out stakeholders present? What economic, legal, ethical, and philanthropic responsibilities do we have to our stakeholders? What should we do to effectively address the stakeholder concerns?

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

ethical

Starbucks's actions to educate its workers and management about racism indicates that the firm takes its Blank______ responsibilities seriously.

ethical

Sustainable competitive advantage exists when a firm

maintains superior performance relative to its industry over a long period of time

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. These ideas are Burger Bomb's ______.

strategy

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

trade-offs

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

economic

Strategic positioning allows managers to

provide customers value while controlling costs

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

sustainable

Which statement about strategies is true?

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

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 legal developments allow business to function as an institution?

contract enforcement property rights

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

fifth

The question "How do we implement the formulated strategy through an organizational structure, culture, and control system that values and encourages ethical behavior?" would most likely be examined by managers in the Blank______ phase of the AFI strategy framework.

implementation

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

interests and claims

In the Blank______ step of the strategy implementation phase of the AFI strategy framework, managers would examine how the firm should be structured in order to implement the desired strategy.

organizational design

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

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

Which of the following topics should be considered during the analysis phase of the AFI framework?

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

In order to determine if Home Depot has a competitive advantage, we must compare Home Depot's performance to Blank______. Multiple choice question.

the performance of other firms in its industry

What is strategy?

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?

urgency legitimacy power