MGT491 CH2

Hannah is the Chief Operating Officer of the startup AppPalace. In which of the following scenarios does Hannah exhibit strategic leadership? (TYPE LETTER OF ANSWER) A. Hannah schedules a meeting with the manager of the marketing department and overcomes his skepticism about a new campaign aimed at customers in the 55+ age group. Over the next three months, AppPalace gains 250,000 new users in that group. B. With a major pitch to potential investors coming up, Hannah works alone for 10 hours a day until she writes the perfect sales pitch. Even though the rest of her team doubts that they can meet the performance goals Hannah has set, she makes the presentation anyway. C. Citing budget concerns, Hannah ignores the directions from AppPalace's CEO to double the size of the customer support staff. As a result, the company misses its third quarter customer satisfaction target but exceeds its net profit expectations by 5 percent. D. Hannah directs the company to produce an app for reptile enthusiasts, a community she happens to be a part of. Even though the app ends up losing significant amounts of money, Hannah is proud of the product and uses it every day.

A

Which of the following statements is true of corporate strategy? The objective of corporate-level strategy is to ensure that the sum of the values of individual business units is greater than the overall corporate value. A corporate strategy must be able to create synergies across business units that are quite different. Deciding whether to adopt a differentiation or a cost-leadership strategy is part of formulating the corporate strategy. Formulating a corporate strategy involves general managers answering questions relating to how to compete in order to achieve superior performance.

A corporate strategy must be able to create synergies across business units that are quite different

Which of the following best describes a Level 5 manager in the Level-5 leadership pyramid? (TYPE LETTER OF ANSWER) A. Luigi is part of the marketing team at RT Corp.; he has been given the charge of managing a team of three, so he will be promoted to a manager's position next month. B. Connie is an employee who just started her career at DK Inc.; she has already been appreciated for her knowledge and skills in the new company. C. Asoka is the CEO of Green Machines Inc.; he has helped his company in gaining and sustaining a competitive advantage through ethical decision making. D. Dmitri is an employee at Infinite Circle Inc.; he has helped his team achieve their targets by contributing to the team's efforts.

C

Eleanor owns a large portion of Apex Apparel's stock. However, she is not employed by the company. In this scenario, Rachel is the company's internal stakeholder. external stakeholder. creditor. customer.

internal stakeholder

Ida has been tasked with formulating the business strategy for Contour Cosmetics' new line of lipsticks. Which of the following ideas would Ida be likely to include in her proposal? Open kiosks in shopping centers located in developing countries with rising disposable incomes. Reorganize the manufacturing division to gain efficiency. Invest in building an online store for Contour products. Promote the lipsticks as the longest-lasting on the market.

Promote the lipsticks as the longest-lasting on the market

Which of the following statements is true of the social responsibilities of a business? A firm's ethical responsibilities go beyond its legal responsibilities. Legal responsibilities are often subsumed under the idea of corporate citizenship, reflecting the notion of voluntarily giving back to society. Shareholders mandatorily require a firm to perform its ethical and philanthropic responsibilities. Ethical responsibilities are the foundational building block of a firm's social responsibility.

a firms ethical responsibilities go beyond its legal responsibilities

The CEO of Chyron Media has decided to enter the markets of emerging nations like China and Brazil. This means that the books, magazines, and websites published under the Chyron Media banner would be made available in these nations. Which of the following strategies does this scenario best illustrate? functional strategy business strategy corporate strategy divisional strategy

corporate strategy

Mercurial Foods is the parent company of several chain restaurants offering a variety of cuisines. The top management at Mercurial 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 divisional strategy functional strategy business strategy

corporate strategy

Which of the following summarizes the difference between corporate strategy and business strategy? Corporate strategy deals with how to compete; business strategy deals with when to compete. Corporate strategy deals with when to compete; business strategy deals with how to compete. Corporate strategy deals with where to compete; business strategy deals with how to compete. Corporate strategy deals with how to compete; business strategy deals with where to compete.

corporate strategy deals with where to compete; business strategy deals with how to compete

Perpetual Batteries recently came under criticism when a newspaper article revealed that the company's production plant had leaked a chemical compound into a sensitive wetland ecosystem. Although use of the chemical was not technically prohibited by law, the local government levied a small fine for cleaning up the spill. Environmental groups, however, argued that continued use of the chemical was damaging to the local wildlife and threatened to organize a boycott against Perpetual Batteries. What should Perpetual Batteries do to ensure that it meets its ethical responsibilities? Move its production facilities to an area that is less concerned with environmental issues. Design batteries without the chemical and market them as environmentally friendly. Take out an advertisement arguing that use of the chemical is perfectly legal. Pay the fine levied by the local government and resume operations.

design batteries without the chemical and market them as environmentally friendly

In the pyramid of corporate social responsibility, ________ responsibilities are the foundational building block. legal economic ethical philanthropic

economic

The amount of xylene that can be used in household paint is legally limited to 0.03 percent. Anything beyond this amount is hazardous to health and the environment, and considered a legal offense. Consequently, CW Paints Corp. has vouched to make its products as safe as possible. Therefore, it manufactures xylene-free paints even though this increases its costs and reduces the dividends paid to its shareholders in the long run. Which of the following responsibilities is CW Paints Corp. primarily compromising in this scenario? ethical responsibilities toward the society legal responsibilities toward the government economic responsibilities toward its shareholders philanthropic responsibilities toward the local community

economic responsibilities toward its shareholders

Understanding the Resource Allocation Process (RAP) will have large effects on shaping a firm's realized strategy. Which of the following is an example of such an allocation of resources? Teach For America's mission statement Starbucks' launch of iced drinks Intel's rule to "maximize margin-per-wafer-start" Merck's voluntary withdrawal of Vioxx from the market

intel's rule to "maximize margin per wafer start"

The production head at the Omnitone Paint Company would frequently stay back after office hours and experiment with new color combinations even though this was part of the new product development team's job. As a result of these experiments, he came up with two new interior paint colors, foggy morning and mint julep. The new colors proved popular among test groups, and quickly became some of Omnitone's best-selling products. Which of the following strategies does this scenario best illustrate? tactical strategy unrealized strategy emergent strategy intended strategy

emergent strategy

The interaction between a firm and its diverse internal and external stakeholders is best described as a(n) ergonomic relationship. exchange relationship. fiduciary responsibility. cartel arrangement.

exchange relationship

Organic Food Inc., a multinational company, relies on its media partner Radio Plus to regularly advertise its offers, sales, and new products. Radio Plus is invested in this relationship because it generates most of its revenue from advertising Organic Food's products. In this scenario, Radio Plus is Organic Food Inc.'s stockholder. internal stakeholder. workforce. external stakeholder.

external stakeholder

A firm is required by society and its shareholders to meet its ethical and philanthropic responsibilities. T/F

false

The autocratic strategic management process exhibited by the former head of Apple, Steve Jobs, is best described as an emergent strategy. T/F

false

The best example of a firm's external stakeholder is a(n) employee of the firm who is responsible for a contract project. government agency that regulates the prices of products manufactured by the firm. shareholder who has invested money in the firm but is not employed by the firm. board member from a wholly-owned foreign subsidiary of the firm.

government agency that regulates the prices of products manufactured by the firm

Due to several black swan events in the past, the shareholders of public companies have become more confident in investing their resources in businesses. implicit trust relationship between the corporate world and society at large has deteriorated. need for corporate governance and transparency has decreased within various industries. nations around the globe have explicitly appreciated and accepted capitalism as an economic system.

implicit trust relationship between the corporate world and society at large has been deteriorated

Due to several black swan events in the past, the nations around the globe have explicitly appreciated and accepted capitalism as an economic system. shareholders of public companies have become more confident in investing their resources in businesses. need for corporate governance and transparency has decreased within various industries. implicit trust relationship between the corporate world and society at large has deteriorated.

implicit trust relationship between the corporate world and society at large has deteriorated

Yuki is part of a sales team. He effectively coordinates his tasks with others in the team and willingly contributes to their efforts in achieving the team's objectives. Thus, Yuki is in ________ of the Level-5 leadership pyramid. Level 4 Level 5 Level 3 Level 2

level 2

Which of the following is typically an economic responsibility of a firm? helping a nation increase its import of goods and services paying adequate returns to the firm's stockholders on the capital invested by them sourcing raw materials from highly developed countries donating resources, in terms of money and time, toward community development

paying adequate returns to the firm's stockholders on the capital invested by them

InTex manufactures medical devices. The firm's profitability depends on several variables that are subject to occasional change, including the cost of parts and labor, changes in medical practices, and the price of oil used in both manufacturing and shipping. To account for the potential impact of changes to any of these variables, InTex managers should implement a(n) ________ approach. scenario planning strategic business units upper-echelon top-down strategic planning

scenario planning

The executives at Red Couture Inc. are developing strategic plans to address plausible future situations like rise in the prices of cotton and synthetic fabrics by 20 percent, appreciation in the value of the dollar, increase in the cost of labor by 30 percent, and increase in demand for the company's products. By doing so, the company will be well prepared with its planned responses if any of these situations occurs in the future. Thus, Red Couture is employing ________ as the approach to the development of strategy. pattern recognition reverse engineering top-down strategic planning scenario planning

scenario planning

Which of following practices of a firm satisfies its ethical responsibilities? selling vaccines at a subsidized price in a less developed country even though this results in reduced shareholder returns using advertising and other forms of promotion to endorse luxurious lifestyles outsourcing production to a less developed country and paying wages that are below its own country's accepted minimum wages using plastic as the packaging material though it is harmful to the environment, yet legal

selling vaccines at a subsidized price in a less developed country even though this results in reduced shareholder returns

Top-down strategic planning as an approach to the strategic management process will be most effective when the top management wants to decentralize decision making. probability of black swan events is high. environment is constantly changing. size of the firm is large.

size of the firm is large

BlueStainless Corp. has been able to gain and sustain a competitive advantage due to its strong relationship with its employees, customers, suppliers, and local communities. The company believes in lifetime employment and ensures that its employees grow along with the company. Investors are more than satisfied with the returns on their investments. Also, 3 percent of the company's profit is spent on community development. With initiatives like these, customers feel privileged to associate themselves with BlueStainless products. This scenario best illustrates the implementation of a strategic analysis. black swan event. wild card event. stakeholder strategy.

stakeholder strategy

A traditional top-down strategic planning process typically begins with functional managers formulating functional strategies for their respective departments. employees at the operational level identifying problems within an organization. employees who have close contact with customers taking autonomous actions. strategic leaders adjusting a company's vision and mission based on environmental analysis.

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

Zenya is the founder of an online service that allows users to rent out spare rooms in their homes. She has hired a number of 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? strategic planning ad-hoc planning strategy as planned emergence scenario planning

strategy as planned emergence

A company uses the planned emergence approach in the development of its strategies. Which of the following is an implication of this? The lower-level employees will be restricted to the tasks involved in strategic implementation. The top management will create a strategy that is based on hard data alone, rather than an inspiring vision. The employees will be isolated from the process of setting the company's vision and mission. The company's organizational structure and systems will be designed to support bottom-up strategic initiatives.

the company's organizational structure and systems will be designed to support bottom up strategic initiatives

Which of the following was a key motivator for participants in the Occupy movement of 2011? the need for a capitalist economic system the issue of income disparity the need to reduce government intervention in businesses the desire to dump ecologically dangerous products overseas

the issue of income disparity

A surprise event that leads to a change in strategic initiatives, such as the accidental discovery of a new use for an existing product, is known as serendipity. T/F

true

An employee lacking some of the innate abilities to be a top-level manager can still become an effective strategic leader through hard work and experience. T/F

true

Molly Hue Apparels Inc. (MHA) had been outsourcing its production to less-developed countries in order to reduce its cost of production. With the emergence of its competitor, Hova Inc., MHA lost its competitive advantage. Hova had its production units in its home country that allowed the company to bring out the latest trends to the market earlier than MHA. Also, MHA frequently suffered due to political instability and lack of intellectual property laws in the outsourced countries. Thus, parts of MHA's strategies became obsolete and it had to relocate its production. What are such obsolete strategies referred to as in the planned emergence model? tactical strategy intended strategy unrealized strategy emergent strategy

unrealized strategy