Ch 1 (Capstone)

during the external phase of the afi strategy framework managers should ask

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

Institutional investors have more power over a firm than individual investors b/c:

(1) they are able to buy or sell a much larger number of shares than can individuals (2) they can exercise block-voting rights or otherwise influence the corporate government process

Competitive parity occurs when

2 or more firms achieve the same performance results

The industry a firm is in determines about __ of a firm's profitability.

20%

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

Analysis Formation Implementation

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

Controlling costs Creating value

T/F: A statement such as, "we will be the biggest company in the world," is an example of strategy?

False

T/F: Managers should only obey laws they do not interfere with the firm's strategy.

False

3 When a firm implements a strategy that leads to superior performance relative to other companies in the same industry, it's said to have achieved ___.

a competitive advantage

The most important factor in determining firm performance is

a firm's strategy (up to 55%) (industry effects ~20%, other effects ~25%)

A good strategy consists o 3 elements. The 2nd element is accomplished through strategy formulation, resulting in the firm's functional, business-level- and comport level strategies. This is also called ___.

a guiding policy

BP's actions after the 2010 deepwater horizon oil spill, widely described as gross negligence and a lack of business integrity may result in

a significant competitive disadvantage

Black swan event

an unexpected and unlikely occurrence that has significant impact on society ex: 2008 global financial crisis

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

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

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

competitive disadvantage

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

corporate citizenship

external stakeholders

customers suppliers creditors unions governments

3 elements of a good strategy

diagnosis -- analysis guiding policy -- formulation set of coherent actions -- implementation

Which elements of the pyramid of corporate social responsibility are said to be required by society?

economic legal

Which of the following incentivizes employees by offering them discounted shares or retirement plans based on company stocks? stock buyback plans employee stock ownership plans initial public offerings employee welfare benefit plans

employee stock ownership plans

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

ethical

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

ethical philanthropic economic legal

Customers, suppliers, creditors, unions, and governments are know as ___.

external stakeholders

T/F: Twitter's plan to charge advertisers to promote their goods to users is an example of an effective business strategy?

false

As a CEO, Maya's actions influence company performance far more than any forces exerted by the external environment. Maya's actions are classified as:

firm effects

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

global

Step 2 of the stakeholder impact analysis

identifies their stakeholders' interests and claims according to the power, legitimacy, and urgency framework

The stakeholders of a firm are ___.

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

What should be considered during the strategy analysis phase of the afi framework?

internal strengths/resources business model and competitive advantages external environment and associated challenges role of strategic leadership and the strategy-making process

A competitive advantage

is assessed relative to other competitors in the industry

In order for a firm such as Threadless to benefit from the "wisdom of the crowds," the crowds must be __ __.

large and diverse

Manager have __ resources in their quest for competitive advantage.

limited

In the __ 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

strategic positioning allows manager to

provide customer value while controlling costs

economic responsiblity

repay debts to suppliers give investors a return on invested capital

The most likely result of failing to meet the needs of shareholders is that they will

sell the company's stock, negatively affecting the firm's market value

Stakeholder strategy argues that focusing on only the needs of __ places the firm at risk of failure.

shareholders

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

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

stakeholder strategy

Internal stakeholders

stockholders board members employees

Which of the following factors would be examined in the external analysis stage of the afi strategy framework?

strategic groups competitive forces

strategy is the art and science of

success and failure

A competitive advantage that lasts for a long period of time is ___.

sustainable

Step 3 of the stakeholder impact analysis

the firm identifies the opportunities and treats that stakeholders present toe the firm

Strategy is ___.

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

Manager often have to make decisions between 2 conflicting strategic options known as:

trade-offs

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

5 key questions to be asked in the stakeholder impact analysis:

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 stakeholder concerns?

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

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

A firm that successfully executes a strategy benefits society by

creating value reinvesting profits and increasing employment

3 important stakeholder attributes managers must pay particular attention to during stakeholders impact analysis

power legitimate urgency

Step 4 of the stakeholder impact analysis

the firm identifies their various social responsibilities to stakeholders