MGMT 490 - Test 1 - Chps 1-4
What is a stretch objective?
A performance target that will require significant effort to achieve
The most reliable leading indicators are ______.
strategic outcomes that measure competitiveness and market position
Which document spells out the direction a company will take as it anticipates future developments?
The strategic vision
To mobilize employee support for a new strategic vision for a company, executives should ______.
give convincing reasons for taking the organization in a new direction
Which mission statement is written in the most effective manner?
"To provide nutritious food at an affordable price, served with a smile"
Which of the following are developed during the first stage in crafting a company strategy? (Choose every correct answer.)
-A mission statement -A set of core values -A strategic vision
Which performance indicators are signs of a winning strategy? (Choose every correct answer.)
-Above-average financial performance -Increased market share -Gains in competitive position
Financial objectives are important for doing which of the following? (Choose every correct answer.)
-Achieving shareholder satisfaction -Increasing revenue -Increasing profit margins
When management discovers that there are strategic conflicts among the various levels of an organization, what should management do? (Choose every correct answer.)
-Adapt high-level strategies to incorporate more appealing ideas from lower levels. -Consider which low-level strategies might be changed to accommodate high-level strategies. -Ensure all conflicts are resolved.
Which of the following are part of the fifth and final stage for crafting and executing a company's strategy? (Choose every correct answer.)
-Adjusting the mission statement -Evaluating performance -Monitoring developments
What will a typical strategic plan accomplish? (Choose every correct answer.)
-Allocate resources that will help implement the plan -Establish a time period for accomplishing goals
What are strategic objectives primarily concerned with? (Choose every correct answer.)
-An organization's market standing -An organization's competitive position
Which elements form part of a company's strategic plan? (Choose every correct answer.)
-Basic business model -Intended competitive moves -Company direction
What are the two basic ways that companies achieve competitive advantage over their business rivals?
-By delivering higher perceived value to customers -By producing products or services at a lower cost
What are some of the ways that companies typically implement a competitive strategy? (Choose every correct answer.)
-By delivering superior customer service -By focusing on quality -By diversifying product lines
Which actions are often helpful for a company when it adopts a value statement? (Choose every correct answer.)
-Combining its values, vision, and mission in one document -Posting the finished values statement on the company's website
Which factors do managers consider when establishing performance objectives? (Choose every correct answer.)
-Competition from other businesses -Economic conditions within the industry -The company's internal capabilities
To produce a value statement for a new company, what will management typically do? (Choose every correct answer.)
-Consider feedback from employees -Write an initial draft and have employees read it
A business strategy becomes unethical when it involves what elements? (Choose every correct answer.)
-Disreputable behavior -Deceitfulness -Unreasonable damage to the environment
An organization should set performance targets for which of the following? (Choose every correct answer.)
-Each of the organization's separate businesses -Each of the organization's product lines -Each of the organization's individual work units
What are two basic approaches in company strategy to improve chances of success in competing against rivals?
-Establish a position in an uncrowded market. -Clearly differentiate a company from its rivals.
What are the best tactics for convincing lower-level managers and employees to support the company's strategic vision? (Choose every correct answer.)
-Explaining why the company is taking a particular direction -Sharing updates and progress reports
Which of the following are the components of a fit test that help evaluate how well a company's strategy matches its situation? (Choose every correct answer.)
-External fit -Dynamic fit -Internal fit
A company's ultimate success or failure is fundamentally tied to how well its management team does which of the following? (Choose every correct answer.)
-Facilitates internal operating excellence -Charts the company's direction -Develops competitively effective strategies
When setting objectives, which types of performance targets must be established? (Choose every correct answer.)
-Financial -Strategic
The balanced-scorecard approach measures which of the following? (Choose every correct answer.)
-Financial objectives -Strategic objectives
What choices must managers consider when committing to a company strategy for competing against rival companies? (Choose every correct answer.)
-How to attract customers -How to capitalize on growth opportunities -How to respond to market conditions
Business strategy, in contrast to corporate strategy, involves which of the following? (Choose every correct answer.)
-Improving the performance of individual business units -Strengthening the market position of individual business units
Which of the following are impediments to a company's long-term industry success? (Choose every correct answer.)
-Inadequate attempts to improve -Imitative strategies -Illogical strategies
Which of the following are NOT likely to happen if a company's financial objectives are met or exceeded? (Choose every correct answer.)
-Revenues will decrease. -The company will go into bankruptcy. -Senior executives will be fired.
Members of an organization are most likely to support a new strategic vision if the document does which of the following? (Choose every correct answer.)
-Is explained by top executives to as many people as possible -Explains where the organization is going and why -Is distributed throughout the organization
Which statements are true of a company's strategic vision? (Choose every correct answer.)
-It explains why the vision makes sound business sense. -It is crafted by the company's top managers. -It steers the organization in a specific direction.
Why is a well-designed strategic vision important to an organization? (Choose every correct answer.)
-It motivates personnel at all levels to help achieve the vision. -It helps managers coordinate efforts toward common goals. -It helps top executives clarify their sense of direction.
Which statements about a company's goal-setting process are true? (Choose every correct answer.)
-It should involve all organizational units within the company. -It should be a top-down process. -It should coordinate the efforts of each organizational unit.
Operating strategies are designed to manage which of the following? (Choose every correct answer.)
-Key units, such as distribution centers -Specific activities, such as Internet sales
In what ways does a competitive advantage benefit a business? (Choose every correct answer.)
-Larger profits -Greater success in the marketplace
What are three of the most reliable ways a company can distinguish itself in the marketplace, build customer loyalty, and achieve a competitive advantage?
-Low-cost provider strategy -Broad differentiation strategy -Focused low-cost strategy
Why should the mission statement NOT focus on the company's goal of making a profit? (Choose every correct answer.)
-Making a profit is best seen as a result of the company's actual mission. -The mission statement should define "who we are and what we do." -All commercial businesses aim to make a profit.
Which statements are true about assessing the effectiveness of a strategic plan? (Choose every correct answer.)
-Managers should evaluate how the strategy is working throughout the company. -Managers should make adjustments in areas that aren't working well and continue strategies that are succeeding. -Managers should search diligently for ways the strategy can be improved.
To ensure that employees will help execute the company's strategy, what should a manager do? (Choose every correct answer.)
-Managers should reward employees when they achieve performance goals. -Managers should provide leadership to keep the strategy moving forward. -Managers should encourage a company culture that will help the strategy succeed.
Better financial performance typically results from which of the following? (Choose every correct answer.)
-More competitive vitality -A stronger market standing -Competitive advantage
Which circumstances commonly require the modification of a company's strategy? (Choose every correct answer.)
-New market opportunities -Technological advances -A shift in buyer needs
During the final stage of developing and implementing a company strategy, what factors often cause the company to adjust its objectives or mission statement? (Choose every correct answer.)
-New opportunities -Changing conditions -New ideas
What are two characteristics of a broad differentiation strategy?
-Offering products or services that are difficult to imitate -Appealing to a wide range of consumers
To implement a strategy, what elements will a manager usually need to assemble? (Choose every correct answer.)
-Personnel with appropriate skills and expertise -Information and operating systems -Adequate resources for activities critical to strategic success
Long-term objectives are intended to do which of the following? (Choose every correct answer.)
-Prevent a nearsighted management philosophy -Prompt action now to improve the organization's performance later
Which of the following should the organizational units within a company do? (Choose every correct answer.)
-Produce results that help the company achieve its performance targets -See themselves as part of a team that includes the entire company -Know their strategic role within the company
What performance indicators reveal the most about the merits of a company's strategy? (Choose every correct answer.)
-Profitability and financial strength -Competitive strength and market standing
A company mission statement should do which of the following? (Choose every correct answer.)
-Specify what services and products the company offers -Establish the company's own identity -Identify the company's customers or markets
The general profit formula for fast-food restaurants as invented by McDonald's involves which of the following? (Choose every correct answer.)
-Strict specifications for ingredients -Standardized store design -Advertising and in-store promotions
Sometimes a company's CEO is the main person who develops the organization's strategy. This most often happens in which of the following situations? (Choose every correct answer.)
-The CEO is the founder of a company that grew into a larger corporation. -The CEO is the owner and manager of a small company. -The CEO has particularly strong strategic leadership skills.
In which of the following situations is an adjustment of a company's strategy most likely needed? (Check all that apply.)
-The company faces a drop in its market position. -The company repeatedly fails to achieve performance goals.
What is described by a company's mission statement? (Choose every correct answer.)
-The company's present purpose -The company's present business
A company's business model is comprised of which of the following? (Choose every correct answer.)
-The customer value proposition -The profit formula
Top executives can unify the various strategies within a company by telling lower managers and other personnel about which of the following? (Choose every correct answer.)
-The major components of the corporate strategy -The organization's objectives -The organization's vision
While developing a strategic vision, a company's managers might change which of the following? (Check all that apply.)
-The markets in which the company will compete -The products the company will offer -The type of customers the company will serve
Why might top executives involve lower-level managers in crafting and implementing a company strategy? (Choose every correct answer.)
-The organization is so big and complex that top management cannot keep track of all the parts that make up the strategy. -The managers know more details about the operation of their specific operating units than the executives do. -The company's operations are spread across various industries and geographic areas.
When do strategic actions fall into the "should not do" category? (Choose every correct answer.)
-They have a negative effect on customers, employees, and the surrounding community. -They make the company look bad. -They cause a public backlash and accusations of being irresponsible.
Why are stretch objectives helpful? (Choose every correct answer.)
-They help an organization perform at its full potential. -They prevent employees from settling for a comfortable level of performance. -They motivate employees to be more productive.
It is generally best for companies to craft objectives that have which of the following features? (Choose every correct answer.)
-They include a deadline for achieving the objective. -They can be measured.
Which statements are true about specific, measurable goals? (Choose every correct answer.)
-They motivate personnel to try harder. -They help an organization remain focused on what it is trying to accomplish. -They help an organization track its progress.
Why do companies designate a set of core values? (Choose every correct answer.)
-To encourage certain beliefs, traits, and behavioral norms -To guide the company as it pursues its vision and mission -To guide the behavior of personnel
What is the role of a company's board of directors? (Choose every correct answer.)
-To ensure that the company is operating in the best interests of shareholders and other stakeholders -To oversee top executives and ensure that they craft and implement an effective strategy
What purposes are served by a company slogan? (Choose every correct answer.)
-To motivate personnel to overcome obstacles -To define the organization's direction -To help employees maintain focus on the company's purpose
Under what circumstances would an extreme stretch goal involving radical expectations be most likely to succeed? (Choose every correct answer.)
-When the company has plenty of resources available -When the company's recent performance has been strong
What choices must managers consider when committing to a company strategy for competing against rival companies? (can me multiple answers) - how to hide the company's structural weaknesses - how to attract customers - how to capitalize on growth opportunities - how to respond to market conditions
-how to attract customers -how to capitalize on growth opportunities -how to respond to market conditions
What is a company slogan?
A brief phrase that summarizes the company's vision
What aspect of a company's operations is usually the easiest thing for competitors to duplicate?
Attributes of the company's products or services
Who is ultimately responsible for the results that a company strategy produces
CEO
When a company strives to achieve an extreme stretch goal but fails because the goal was simply too difficult, what will most likely happen?
Employees will lose their motivation.
Who is the target audience of an organization's strategic vision statement?
Everyone in the organization
True or False: The crafting and implementing of company strategy is exclusively a function of the top management of an organization.
False
What company invented the business model for fast food restaurants?
McDonald's
A measurement system that links financial performance goals with strategic goals is called a ______.
balanced scorecard
A blueprint that outlines the means for a company to deliver value to customers in a suitably profitable manner is known as its ______.
business model
Which of the following groups is primarily responsible for challenging a chief executive officer (CEO) who is acting inappropriately in that position?
The board of directors
A toy-making business is part of a larger corporation that owns various other businesses. The toy-making business unit decides to increase its production of board games. This is an example of a(n) ______.
functional-area strategy
Who is primarily responsible for crafting and implementing business strategy in a multibusiness organization?
The head of each business unit
Why do some companies state their core values but make little effort to ensure that individual personnel and the company in general will abide by them?
The statement about values serves only to make the company look good.
When charting a company's direction, why do managers set objectives?
To establish performance targets that the managers hope to achieve, using the company's mission and vision
True or false: It is easier for rivals to imitate a company's product line than it is for them to duplicate its capabilities.
True
A strategy that changes in response to new market conditions and challenges is known as ______.
an evolving strategy
A sound company strategy is essentially about ______ in comparison to company rivals.
competing differently
When a business is more successful than its rivals at attracting customers and handling competition, it is said to have a(n) ______ advantage.
competitive
Strategic performance is measured by the rise and fall of a company's ______.
competitiveness
A company's approach to meeting or exceeding its customers' needs at a price they consider a good value is called the _____.
customer value proposition
The actions that a company takes in accordance with its established business practices make up its ______ strategy, in contrast with actions the company takes in response to changing market conditions.
deliberate
Masterful strategies come from ______.
doing key things differently from competitors
The key for a company to achieve competitive advantage is either to provide superior value to customers or to deliver value more ______.
efficiently
Actions taken in response to new strategic maneuvers by rival firms or other unanticipated market circumstances make up a company's ______ strategy.
emergent
Organizing and guiding a new business activity is called _____.
entrepreneurship
The ____ profit is the company's approach to determining a cost structure that will allow for acceptable profits, given the pricing tied to its customer value proposition.
formula
The most demanding and lengthy part of the strategy management process is ______.
implementing the strategy
In a small, privately owned company, the strategic plan is most likely something that the owner has ______.
pondered without writing down
A company's realized strategy is a combination of ______.
proactive and reactive elements
A typical company's strategy is often both ______, meaning that it plans ways to improve the company's competitiveness, and ______, meaning that it responds to unforeseen market conditions.
proactive; reactive
The primary purpose of a vision statement is to ______.
provide the company with a sense of direction
When conditions outside or inside the company change enough to cause substantial disruptions, managers should ______.
reevaluate the organization's direction and strategy
Employees at various levels within an organization are best served by performance objectives that ______.
relate specifically to what their departments are doing
As a company strategy is implemented, it will typically ______
work well in some areas and not so well in others
