ch 2

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.

First Pharma Inc. and GeoVax Inc. are two competing firms in the pharmaceutical industry. While First Pharma Inc.'s vision is "to be a preeminent drug manufacturer in the industry," GeoVax Inc.'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?

GeoVax Inc. will be more flexible than First Pharma Inc. when adapting to changing environments.

Do vision statements help firms gain and sustain competitive advantage?

It depends, because the effectiveness of vision statements differ by type.

Organizational values help individuals make choices that are

both ethical and effective in advancing a company's goals.

A traditional top-down strategic planning process typically begins with

strategic leaders adjusting a company's vision and mission based on environmental analysis.

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

Which of the following is an example of a business acting upon an organizational core value?

Emerald Autos reduces engine emissions below federal guidelines to reduce pollution.

The CEO of EveryCar 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

Big Wheel, 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 Big Wheel?

All nations around the globe should be able to provide energy produced by sustainable sources.

n the top-down strategic planning approach, all strategic intelligence and decision-making responsibilities rest primarily on the

CEO

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

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

Which of the following statements about product-oriented visions is true?

They tend to force managers to take a myopic view of the competitive landscape.

TransNational Inc. is a large conglomerate that operates in 17 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, or the value of potential future revenues generated by all its customers in a lifetime. Based on this guideline received from the top management team, the product leader of the home audio division has decided to adopt a cost-leadership strategy in all of his 17 units. Thus, the decision made by the product leader best illustrates a ________ strategy.

business

Jennifer was just named the CEO of a pen company called National Pens Inc. She immediately changed the name to "Jenn's Pens." When asked why she made this change by the board of directors, who showed research that there was no correlation between success and CEP names, she responded by saying, "my previous company had the name of their CEO in the title, and they were very successful." This fallacy on Jenifer's part reveals her

confirmation bias.

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

All Foods is the parent company of several chain restaurants offering a variety of cuisines. The top management at All Foods has decided to enter the frozen foods industry based on its assessment of the profit potential in that industry. Which of the following strategies does this best illustrate?

corporate strategy

Strategic commitments are actions that are

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

Bob is exploring multiple suppliers in order to find the best price. However, instead of calling all eight potential suppliers, he only reaches out to the first three and bases his selection on those instead of contacting all suppliers. Bob's action best describes the concept of

satificing

Madeline is the founder of an online service that allows users to rent out spare rooms in their homes. She has hired several 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

Visionary companies are able to outperform their competitors because

they provide more aspirational visions