Chapter 1

59. __________ can best be described as short-term in nature. a. Mission statements b. Tenure c. Annual objectives d. Strategies e. Management

Annual objectives

59. The first step in strategic planning is generally: a. Developing a vision statement b. Establishing goals and objectives c. Making a profit d. Developing a mission statement e. Determining opportunities and threats

Developing a vision statement

59. _________ and _________ are external forces transforming business and society today. a. E-commerce; strategy b. E-commerce; globalization c. Strategy; globalization d. Corporate culture; stakeholders e. Stakeholders; strategy

E-commerce; globalization

59. The act of strengthening employees' sense of effectiveness by encouraging and rewarding them to participate in decision-making and exercise initiative and imagination is referred to as: a. Authoritarianism b. Proaction c. Empowerment d. Transformation e. Delegation

Empowerment

A vision statement answers the question, "What is our business?," whereas a mission statement answers, "What do we want to become?"

False

A vision statement is, in essence, a company's game plan.

False

According to Albert Einstein, "Knowledge is far more important than intuition."

False

All strategists have similar attitudes, values, ethics and concerns for social responsibility.

False

Although the Internet has increased in popularity, it has actually led to increases in company expenses.

False

An integral part of strategy implementation must be to evaluate the quality of the strategic-management process.

False

Annual objectives are especially important in strategy formulation.

False

By monitoring external events, companies should be able to identify when change is required.

False

Consumer e-commerce is five times greater than business-to-business e-commerce.

False

Crises and fires in an organization allows managers the training and time for effective strategic planning.

False

Even though useful, strategic planning has been cast aside by corporate America since the early 1990s.

False

Identifying an organization's existing vision, mission, objectives and strategies is the final step for the strategic management process.

False

In a multidivisional firm, objectives should be established for the overall company and not for each division.

False

In most situations, business strategy is very different than military strategy.

False

In the last five years, the position of chief strategy officer (CSO) has diminished in comparison to other top management ranks of many organizations.

False

Management by intuition can be defined as operating from the "I've-already-made-up-my-mind-don't-bother- me-with-the-facts mode."

False

Managers must be very formal in strategic planning because formality induces flexibility and creativity.

False

Newspaper companies in the United States provide a good example of how a company can sustain a competitive advantage over the long term.

False

Nonprofit organizations have less need for strategic management because they are not interested in making a profit

False

Once a firm acquires a competitive advantage, they are usually able to sustain the competitive advantage for an extended period of time.

False

Once an effective strategy is designed, modifications are rarely required.

False

Optimizing for tomorrow the trends of today is the purpose of strategic management.

False

The changes that occurred at Disney after Robert Iger took over as CEO exemplifies the fact that more and more organizations are centralizing the strategic-management process.

False

The final stage in strategic management is strategy implementation.

False

59. What step in the strategic development process involves mobilizing employees and managers to put strategies into action? a. Formulating strategy b. Strategy evaluation c. Implementing strategy d. Strategic advantage e. Competitive advantage

Implementing strategy

59. What types of skills are especially critical for successful strategy implementation? a. Interpersonal b. Marketing c. Technical d. Conceptual e. Thinking

Interpersonal

59. What is not a pitfall an organization should avoid in strategic planning? a. Failing to communicate the plan to employees b. Involving all managers rather than delegating planning to a "planner" c. Top managers not actively supporting the strategic planning process d. Doing strategic planning only to satisfy accreditation or regulatory requirements

Involving all managers rather than delegating planning to a "planner"

59. Which statement best describes intuition? a. It represents the marginal factor in decision-making. b. It represents a minor factor in decision-making integrated with analysis. c. It should be coupled with analysis in decision-making. d. It is better than analysis in decision-making. e. It is management by ignorance.

It should be coupled with analysis in decision-making.

59. Which of the following is not included in the strategic management model? a. Measure and evaluate performance. b. Perform internal research to identify customers. c. Establish long-term objectives. d. Implement strategies. e. Develop mission and vision statements.

Perform internal research to identify customers

59. What can be defined as the art and science of formulating, implementing and evaluating cross-functional decisions that enable an organization to achieve its objectives? a Strategy formulation b Strategy evaluation c Strategy implementation d Strategic management e. Strategic leading

Strategic managemen

59. Which of the following statements is false? a. Open-mindedness is an important guideline for effective strategic management. b. Strategic management must become a self-perpetuating socialist mechanism. c. No organization has unlimited resources. d. Strategic decisions require trade-offs. e. Strategic management must be a self-reflective learning process.

Strategic management must become a self-perpetuating socialist mechanism.

59. ____________ is used to refer to strategic formulation, implementation and evaluation, with ______________ referring only to strategic formulation. a. Strategic planning; strategic management b. Strategic planning; strategic processing c. Strategic management; strategic planning d. Strategic management; strategic processing e. Strategic implementation; strategic focus

Strategic management; strategic planning

59. Which individuals are most responsible for the success and failure of an organization? a. Strategists b. Financial planners c. Personnel directors d. Stakeholders e. Human resource managers

Strategists

A clear mission statement describes the values and priorities of an organization.

True

According to Greenley, strategic management provides a cooperative, integrated and enthusiastic approach to tackling problems and opportunities.

True

According to research, a healthier workforce can more effectively and efficiently implement strategies.

True

All organizations have a strategy from their inception, even if the strategy is informal, unstructured, and sporadic

True

An integral part of the responsibility of all managers is to provide ethical leadership by constant example and demonstration

True

An objective, logical, systematic approach for making major decisions in an organization is a way to describe the strategic-management process.

True

Analytical and intuitive thinking should complement each other.

True

Anything the firm does especially well compared to rival firms could be considered a competitive advantage.

True

Application of the strategic-management process is typically more formal in larger and well-established organizations.

True

Firms can be more proactive with strategic management.

True

Firms with planning systems more closely resembling strategic-management theory generally exhibit superior long-term financial performance relative to their industry.

True

Followed by commitment, understanding is the most important benefit of strategic management.

True

In order for a firm to achieve sustained competitive advantage, a firm must continually adapt to changes in external trends and events and effectively formulate, implement, and evaluate strategies that capitalize upon those factors.

True

International operations can be as simple as exporting a product to a single foreign country.

True

Low-performing firms typically underestimate their competitor's strengths and overestimate their own firm's strengths.

True

Merely having a code of ethics is not sufficient to ensure ethical business behavior.

True

Objectives should be measurable, quantitative, challenging, realistic, consistent and prioritized.

True

One of the fundamental strategy evaluation activities is reviewing external and internal factors that are the bases for current strategies.

True

One risk in international operations is that nationalistic factions could seize the operations.

True

Resource allocation is included in strategy-formulation activities.

True

Strategic management is an attempt to organize qualitative and quantitative information in a way that allows effective decisions to be made under conditions of uncertainty.

True

Strategic-management must be a self-reflective learning process that familiarizes managers and employees in the organization with key strategic issues and feasible alternatives for resolving those issues

True

Strategists are usually found in higher levels of management and have considerable authority for decision-making in the firm.

True

Strategy formulation, implementation and evaluation activities occur at three hierarchical levels in a large diversified organization: corporate, divisional and functional.

True

Strategy implementation is often considered to be the most difficult stage in the strategic-management process because it requires personal discipline, commitment and sacrifice.

True

The poor reward structure is one reason managers do not engage in strategic planning.

True

The underpinnings of strategic management hinge on managers gaining an understanding of competitors, markets, prices, suppliers, distributors, governments, creditors, shareholders and customers worldwide.

True

Today, managers and employees can be found personally liable if they ignore, conceal, or disregard a pollution problem

True

Top managers making many intuitive decisions that conflict with the formal plan is one pitfall managers should avoid in strategic planning

True

59. Strategic management enables an organization to __________, instead of companies just responding to threats in their business environment. a. be proactive b. determine when the threat will subside c. avoid the threats d. defeat their competitors e. foresee into the future

be proactive

59. Principles of conduct that guide decision-making are known as a. human rights. b. the Constitution. c. business ethics. d. nonprofit organization policies. e. social responsibility requirements.

business ethics

59. A (n) ____________ can provide a basis on which policies can be devised to guide daily decisions and behavior at the work site. a. list of guidelines b. policy for safety c. vision statement d. code of business ethics e. annual objective

code of business ethics

59. Anything that a firm does especially well compared to rival firms is referred to as: a. competitive advantage. b. comparative advantage. c. opportunity cost. d. sustainable advantage. e. an external opportunity.

competitive advantage.

59. Long-term objectives should be all of the following except: a. measurable. b. continually changing. c. reasonable. d. challenging. e consistent

continually changing.

59. In which phase of strategic management are annual objectives especially important? a. formulation b. control c. evaluation d. implementation e. management

implementation

59. The changes that occurred when Robert Iger took over the reigns at Disney, demonstrate which current trend in organizations? a. increased formalization of the strategic management process b. increased structuring of strategic management c. increased decentralizing of strategic management d. increased emphasis on strategic planning e. increased central planning of the strategic management process

increased decentralizing of strategic management

59. Strategy evaluation is necessary because a. internal and external factors are constantly changing. b. the SEC requires strategy evaluation. c. competitors change their strategies. d. the IRS requires strategy evaluation. e irms have limited resources

internal and external factors are constantly changing.

59. The strategic-management process a. occurs once a year. b. is a sequential process. c. is a continuous process. d. applies mostly to companies with sales greater than $100 million. e. applies mostly to small businesses

is a continuous process.

59. According to Greenley, strategic management offers all of these benefits except that a. it provides an objective view of management problems. b. it creates a framework for internal communication among personnel. c. it encourages a favorable attitude toward change. d. it maximizes the effects of adverse conditions and changes. e. it gives a degree of discipline and formality to the management of a business.

it maximizes the effects of adverse conditions and changes

59. What are enduring statements of purpose that distinguish one business from other similar firms? a. policies b. mission statements c. objectives d. rules e. employee conduct guidelines

mission statements

59. Because they must take the __________ of the firm, strategists' salaries are high compared to those of other individuals in the organization. a. moral risks b. social risks c. environmental risks d. societal criticism e. employee criticism

moral risks

59. According to research, organizations using strategic management are __________ than those that do not. a. more profitable b. more complex c. less profitable d. less static e. less complex

more profitable

59. Specific results an organization seeks to achieve in pursuing its basic mission are: a. strategies b. rules c. objectives d. policies e. mission

objectives

59. What are guides to decision making? a. laws b. rules c. policies d. procedures e. goals

policies

59. What are the means by which long-term objectives will be achieved? a. strategies. b. strengths. c. weaknesses. d. policies. e. opportunities.

strategies.

59. An important activity in __________ is taking corrective action. a. strategy evaluation b. strategy implementation c. strategy formulation d. strategy leadership e. all of the above

strategy evaluation

59. Internal __________ are activities in an organization that are performed especially well. a. opportunities b. competencies c. strengths d. management e. factors

strengths

59. The one factor that has most significantly impacted the nature and core of buying and selling in nearly all industries has been a. the Internet. b. political borders. c. corporate greed. d. customer and employee focus. e. the government.

the Internet.

59. Usually, external opportunities and threats are: a. uncontrollable by a single organization. b. controlled by governments. c. not as important as internal strengths and weaknesses. d. key functions in strategy implementation. e. key functions in strategy exploitation.

uncontrollable by a single organization.

59. All of these are pitfalls an organization should avoid in strategic planning except: a. using plans as a standard for measuring performance. b. using strategic planning to gain control over decisions and resources. c. failing to involve key employees in all phases of planning. d. too hastily moving from mission development to strategy formulation. e. being so formal in planning that flexibility and creativity are stifled.

using plans as a standard for measuring performance.

Annual objectives are long-term milestones that organizations must achieve to reach short-term objectives

False

The middle manager is the most visible and critical strategic manager.

False

The terms strategic management and strategy implementation are synonymous.

False

59. The term "environment" includes all of the following except: a. air. b. water. c. firms. d. natural resources. e. fauna

Firms

59. The largest company in the world is: a. Honda Motor b. ING Group c. Wal-Mart d. Ford Motor Company e. Royal Dutch/Shell Group

Ford Motor Company

59. During what stage of strategic management are a firm's specific internal strengths and weaknesses determined? a. Formulation b. Implementation c. Evaluation d. Feedback e. Goal-setting

Formulation

59. The trends in newspaper circulation in the United States provide support for which statement? a. Sustainable competitive advantage is easy to maintain. b. Several firms can have similar competitive advantages. c. Some products are relatively immune to changes in the external environment d. Most competitive advantages are hard to sustain e. Competition is generally good for companies and consumers

Most competitive advantages are hard to sustain

59. Which phase of strategic management is called the action phase? a. Strategy formulation b. Strategy implementation c. Strategy evaluation d. Allocating resources e. Measuring performance

Strategy implementation

59. __________ is not a strategy-implementation activity. a. Taking corrective actions b. Establishing annual objectives c. Devising policies d. Allocating resources e Motivating employees

Taking corrective actions

Strengths and weaknesses are determined relative to competitors.

True

59. What is not a reason given for poor or no strategic planning in organizations? a. Wasting of time b. Being content with success c. Fire-fighting d. Poor reward structure e. Trust of management

Trust of management

59. How do line managers become "owners" of the strategy? a. by attending top manager meetings b. by gathering information about competitors c. by involvement in the strategic-management process d. by becoming a shareholder of the firm e. by buying off top managers

by involvement in the strategic-management process