Test Bank Strategic Management: Text and Cases 9th Edition by Dess, McNamara, Eisner

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Strategic Management: Text and Cases, 9e (Dess) Chapter 1 Strategic Management: Creating Competitive Advantages 1) Lands' End's failure under the leadership of Ms. Frederica Marchionni was said ... to be a direct result of the quality of her leadership. According to the text, this would be an example of the "romantic" perspective of leadership. Answer: TRUE Explanation: In the romantic view of leadership, the implicit assumption is that the leader is the key force in determining an organization's success or lack thereof. Under Ms. Marchionni's leadership, the company reported a 19.5-million-dollar loss for 2016 after having reported a 73.8-million-dollar profit for the previous year under its previous CEO. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-01 The definition of strategic management and its four key attributes. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 2) Strategic management consists of the analyses, decisions, and actions an organization undertakes in order to create and sustain competitive advantages. Answer: TRUE Explanation: According to the textbook, this is the definition of strategic management. Difficulty: 1 Easy Topic: Strategy and the Strategic Management Process Learning Objective: 01-01 The definition of strategic management and its four key attributes. Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 3) Management innovations such as total quality, just-in-time, benchmarking, business process reengineering, and outsourcing are important but not enough for building sustainable competitive advantage. Answer: TRUE Explanation: Sustainable competitive advantage cannot be achieved through operational effectiveness alone. Popular management innovations of the last two decades like total quality, just-in-time, benchmarking, business process reengineering, and outsourcing are concerned with operational effectiveness. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-01 The definition of strategic management and its four key attributes. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 4) Trade-off decisions between effectiveness and efficiency are important in the practice of strategic management. Answer: TRUE Explanation: The fourth attribute of strategic management is that it involves the recognition of trade-offs between effectiveness and efficiency. Some authors have referred to this as the difference between doing the right thing (effectiveness) and doing things right (efficiency). Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-01 The definition of strategic management and its four key attributes. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 5) According to Henry Mintzberg, a management scholar, most firms do not realize their original intended strategy. Answer: TRUE Explanation: Henry Mintzberg states that the intended strategy rarely survives in its original form. Unforeseen environmental developments, unanticipated resource constraints, or changes in managerial preferences may result in at least some parts of the intended strategy remaining unrealized. On the other hand, good managers will want to take advantage of a new opportunity presented by the environment, even if it was not part of the original set of intentions. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-02 The strategic management process and its three interrelated and principal activities. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 6) The final realized strategy of a firm is a combination of deliberate and time-tested strategies only. Answer: FALSE Explanation: Realized strategy is that strategy of a firm in which organizational decisions are determined by both analysis and unforeseen environmental developments, unanticipated resource constraints, and/or changes in managerial preferences. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-02 The strategic management process and its three interrelated and principal activities. Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation   7) Strategy analysis is the study of only the big picture external environments of the firm. Answer: FALSE Explanation: Strategy analysis is the study of the external and internal environments of a firm, and their fit with organizational vision and goals. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-02 The strategic management process and its three interrelated and principal activities. Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation 8) All successful firms compete and outperform their rivals by developing bases for competitive advantage, which can be achieved only through cost leadership. Answer: FALSE Explanation: Successful firms strive to develop bases for competitive advantage, which can be achieved through cost leadership and/or differentiation as well as by focusing on a narrow or industrywide market segment. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-02 The strategic management process and its three interrelated and principal activities. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 9) The three primary participants in corporate governance are: (1) the shareholders, (2) the management (led by the chief executive officer), and (3) the employees. Answer: FALSE Explanation: The primary participants are: (1) the shareholders, (2) the management (led by the chief executive officer), and (3) the board of directors. Difficulty: 2 Medium Topic: Corporate Governance Learning Objective: 01-03 The strategic role of corporate governance and stakeholder management, as well as how "symbiosis" can be achieved among an organization's stakeholders. Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation   10) Decisions by boards of directors are always consistent with shareholder interests. Answer: FALSE Explanation: The board of directors (BOD) are the elected representatives of the shareholders, charged with ensuring that the interests and motives of management are aligned with those of the owners (i.e., shareholders). Recent scandals have resulted in criticism and cynicism that the BOD fulfills this charge. Difficulty: 2 Medium Topic: Corporate Governance Learning Objective: 01-03 The strategic role of corporate governance and stakeholder management, as well as how "symbiosis" can be achieved among an organization's stakeholders. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 11) Ensuring effective corporate governance requires an effective and engaged board of directors, uninvolved shareholders, and proper managerial rewards and incentives. Answer: FALSE Explanation: We focus on three important mechanisms to ensure effective corporate governance: (1) an effective and engaged board of directors, (2) shareholder activism, and (3) proper managerial rewards and incentives. Difficulty: 2 Medium Topic: Corporate Governance Learning Objective: 01-03 The strategic role of corporate governance and stakeholder management, as well as how "symbiosis" can be achieved among an organization's stakeholders. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 12) Social responsibility is the idea that organizations are only accountable to stockholders. Answer: FALSE Explanation: Social responsibility is the expectation that businesses or individuals will strive to improve the overall welfare of society. From the perspective of a business, this means that managers must take active steps to make society better by virtue of the business being in existence. Difficulty: 2 Medium Topic: Corporate Social Responsibility and Sustainability Learning Objective: 01-04 The importance of social responsibility, including environmental sustainability, and how it can enhance a corporation's innovation strategy. Bloom's: Analyze AACSB: Analytical Thinking Accessibility: Keyboard Navigation   13) Shell, NEC, and Procter and Gamble have been measuring their performance according to what has been called a triple bottom line. This technique involves an assessment of financial, social, and environmental performance. Answer: TRUE Explanation: Many companies are now measuring what has been called a triple bottom line. This involves assessing financial, social, and environmental performance. Shell, NEC, Procter and Gamble, and others have recognized that failing to account for the environmental and social costs of doing business poses risks to the company and its community. Difficulty: 2 Medium Topic: Corporate Social Responsibility and Sustainability Learning Objective: 01-04 The importance of social responsibility, including environmental sustainability, and how it can enhance a corporation's innovation strategy. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 14) Sustainability is being increasingly recognized as a source of cost efficiencies and revenue growth. Answer: TRUE Explanation: A CEO survey on sustainability by Accenture debunks the notion that sustainability and profitability are mutually exclusive corporate goals. The study found that sustainability is being increasingly recognized as a source of cost efficiencies and revenue growth. In many companies, sustainability activities have led to increases in revenue and profits. Difficulty: 2 Medium Topic: Corporate Social Responsibility and Sustainability Learning Objective: 01-04 The importance of social responsibility, including environmental sustainability, and how it can enhance a corporation's innovation strategy. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation   15) Strategic management requires managers at all levels of the organization to take a segregated view of the organization. Answer: FALSE Explanation: Strategic management requires managers to take an integrative view of the organization and assess how all of the functional areas and activities fit together to help an organization achieve its goals and objectives. This cannot be accomplished if only the top managers in the organization take an integrative, strategic perspective of issues facing the firm, and everyone else fends for themselves in their independent, isolated functional areas. Instead, people throughout the organization must strive toward overall goals. Difficulty: 1 Easy Topic: Value of Strategic Leadership Learning Objective: 01-05 The need for greater empowerment throughout the organization. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 16) The strategic management process should be addressed only by top-level executives. Mid-level and low-level employees are best equipped to implement the strategies of the organization. Answer: FALSE Explanation: To develop and mobilize people and other assets, leaders are needed throughout the organization. No longer can organizations be effective if the top level does the thinking, and the rest of the organization does the work. Everyone must be involved in the strategic management process. Difficulty: 2 Medium Topic: Value of Strategic Leadership Learning Objective: 01-05 The need for greater empowerment throughout the organization. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation   17) Richard Branson, the founder of the Virgin Group, is well known for creating an inclusive organizational structure in which anybody in the organization can be involved in generating and acting on new business ideas. Answer: TRUE Explanation: Richard Branson, founder of the Virgin Group, whose core businesses include retail operations, hotels, communications, and an airline, is well known for creating a culture and an informal structure where anybody in the organization can be involved in generating and acting on new business ideas. Difficulty: 2 Medium Topic: Value of Strategic Leadership Learning Objective: 01-05 The need for greater empowerment throughout the organization. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 18) The vision of an organization is at the top level of its hierarchy of organizational goals. The vision statement should be massively inspiring, overarching, and long term. Answer: TRUE Explanation: A vision is a goal that is massively inspiring, overarching, and long term. Difficulty: 2 Medium Topic: The Roles of Vision, Mission, and Values in the Strategic Management Process Learning Objective: 01-06 How awareness of a hierarchy of strategic goals can help an organization achieve coherence in strategic decisions. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 19) Much research has supported the notion that individuals work much harder when they are asked to do their best rather than when they are striving toward a specific goal. Answer: FALSE Explanation: Challenging objectives can help to motivate and inspire employees to higher levels of commitment and effort. Much research has supported the notion that people work harder when they are striving toward specific goals instead of being asked simply to do their best. Difficulty: 2 Medium Topic: The Roles of Vision, Mission, and Values in the Strategic Management Process Learning Objective: 01-06 How awareness of a hierarchy of strategic goals can help an organization achieve coherence in strategic decisions. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation   20) An idealistic vision can arouse employee enthusiasm and therefore is a good vision. Answer: FALSE Explanation: An idealistic vision can arouse employee enthusiasm. However, that same enthusiasm can be quickly dashed if employees find that senior management behavior is not consistent with the vision. Difficulty: 2 Medium Topic: The Roles of Vision, Mission, and Values in the Strategic Management Process Learning Objective: 01-06 How awareness of a hierarchy of strategic goals can help an organization achieve coherence in strategic decisions. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 21) The text addresses two perspectives of leadership as well as their implications. These two perspectives are A) romantic and unromantic. B) romantic and internal control. C) external control and unromantic. D) romantic and external control. Answer: D Explanation: The two perspectives of leadership are the romantic and the external control perspectives. Difficulty: 1 Easy Topic: Strategy and the Strategic Management Process Learning Objective: 01-01 The definition of strategic management and its four key attributes. Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation   22) Ms. Frederica Marchionni became CEO of Land's End in February 2015 when the company showed a 73.8 million-dollar profit. By mid-June of 2016, the company had lost 27.2 million dollars. What went wrong? A) The new leadership did not understand the corporate culture and image. B) The marketplace liked the new image. C) The founder undermined the new CEO in her ability to bring about change. D) The new goals and objectives were coherent with the company mission statement. Answer: A Explanation: Ms. Marchionni's leadership style worked at her previous jobs in Ferrari and Dolce and Gabbana. This style did not meet the outdoorsy, casual clothes feel of the Lands' End customer. She chose to work in New York City with office perks such as private bathrooms, resulting in a misfit with the Land's End culture. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-01 The definition of strategic management and its four key attributes. Bloom's: Analyze AACSB: Analytical Thinking Accessibility: Keyboard Navigation 23) A CEO made a lot of mistakes in assessing the market and the competitive conditions and improperly redesigning the organization into numerous business units. Such errors led to significant performance declines. According to the text, this example illustrates the ________ perspective of leadership. A) external control B) romantic C) internal mechanism D) operational Answer: B Explanation: In the romantic view of leadership, the implicit assumption is that the leader is the key force in determining the success (or lack of success) of an organization. This view dominates the popular press in business magazines such as Fortune, BusinessWeek, and Forbes, wherein the CEO is either lauded for the success of the firm or chided for its demise. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-01 The definition of strategic management and its four key attributes. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation   24) According to the external control view of leadership, which of the following factors would not be considered an external factor that might positively or negatively affect a firm's success? A) economic downturns B) governmental legislation C) outbreak of war D) company employee morale Answer: D Explanation: In the external control view of leadership, external factors are responsible for positively or negatively affecting company success. These external factors often are unanticipated and are not due to the company's leadership. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-01 The definition of strategic management and its four key attributes. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 25) According to the text, the strategic management process entails three ongoing processes. They are A) analyses, actions, and synthesis. B) analyses, decisions, and actions. C) analyses, evaluation, and critique. D) analyses, synthesis, and decisions. Answer: B Explanation: The strategic management of an organization entails three ongoing processes: analyses, decisions, and actions. Difficulty: 1 Easy Topic: Strategy and the Strategic Management Process Learning Objective: 01-01 The definition of strategic management and its four key attributes. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation   26) Management innovations such as total quality, benchmarking, and business process reengineering cannot lead to sustainable competitive advantage because A) companies that have implemented these techniques have lost money. B) there is no proof that these techniques work. C) they cost too much money and effort to implement. D) every company is trying to implement them. Answer: D Explanation: The popular management innovations of the last two decades (total quality, just-in-time, benchmarking, business process reengineering and outsourcing) are all about operational effectiveness. Each of these is important, but none leads to sustainable competitive advantage because everyone is doing them. Strategy is all about being different. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-01 The definition of strategic management and its four key attributes. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 27) The organizational versus the individual rationality perspective suggests that objectives that are A) good for a functional area are always good for the overall organization. B) good for the overall organization are always best for a functional area. C) best for a functional area may not be best for the overall organization. D) best for one functional area will never be best for all functional areas. Answer: C Explanation: Strategic management is directed toward overall organizational goals and objectives. Effort must be directed at what is best for the total organization, not just a single functional area. Some authors have referred to this perspective as organizational versus individual rationality. What might look rational or ideal for one functional area, such as operations, may not be in the best interest of the overall firm. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-01 The definition of strategic management and its four key attributes. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation   28) The four key attributes of strategic management include the idea that strategy must A) be directed toward overall organizational goals and objectives. B) be focused only on long-term objectives. C) be focused on only one specific area of an organization. D) focus only on competitor strengths. Answer: A Explanation: The key attributes of strategic management are that it directs the organization toward overall goals and objectives, includes multiple stakeholders in decision making, needs to incorporate short-term and long-term perspectives, and recognizes trade-offs between efficiency and effectiveness. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-01 The definition of strategic management and its four key attributes. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 29) The four key attributes of strategic management include all of the following except A) including multiple stakeholder interests in decision making. B) incorporating both short-term and long-term perspectives. C) recognizing the trade-offs between effectiveness and efficiency. D) emphasis on the attainment of short-term objectives. Answer: D Explanation: The key attributes of strategic management are that it directs the organization toward overall goals and objectives, includes multiple stakeholders in decision making, needs to incorporate short-term and long-term perspectives, and recognizes trade-offs between efficiency and effectiveness. Difficulty: 1 Easy Topic: Strategy and the Strategic Management Process Learning Objective: 01-01 The definition of strategic management and its four key attributes. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation   30) Effectiveness is often defined as A) doing things right. B) stakeholder satisfaction. C) doing the right thing. D) productivity enhancement. Answer: C Explanation: Effectiveness is tailoring actions to the needs of an organization rather than wasting effort, or doing the right thing. Difficulty: 1 Easy Topic: Strategy and the Strategic Management Process Learning Objective: 01-01 The definition of strategic management and its four key attributes. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 31) In choosing to focus on stakeholders, which of the following will not lead to success for a manager? A) shareholders and employees B) employees and suppliers C) customers and the community at large D) customers only Answer: D Explanation: Stakeholders are those individuals, groups, and organizations that have a stake in the success of the organization, including owners (shareholders in a publicly held corporation), employees, customers, suppliers, the community at large, and so on. Managers will not be successful if they focus on a single stakeholder. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-01 The definition of strategic management and its four key attributes. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation   32) In strategic management, both the short-term and long-term perspectives need to be considered because A) shareholder value is only measured by short-term returns. B) shareholders only care about long-term returns. C) long-term vision precludes the analysis of present operating needs. D) the creative tension between the two forces managers to develop more successful strategy. Answer: D Explanation: Strategic management requires incorporating both short-term and long-term perspectives. Peter Senge, a leading strategic management author, has referred to this need as a creative tension. That is, managers must maintain both a vision for the future of the organization and a focus on its present operating needs. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-01 The definition of strategic management and its four key attributes. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 33) Strategic management involves the recognition of trade-offs between effectiveness and A) cost. B) value. C) return on investment. D) efficiency. Answer: D Explanation: Strategic management involves the recognition of trade-offs between effectiveness and efficiency. Some authors have referred to this as the difference between doing the right thing (effectiveness) and doing things right (efficiency). Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-01 The definition of strategic management and its four key attributes. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation   34) All the following are ambidextrous behaviors except A) taking initiative and being alert to opportunities beyond the job description. B) being cooperative and seeking opportunities to combine personal efforts with that of others. C) intensely focusing on the responsibilities of one individual and maximizing the output of the department in the organization in which that individual works. D) being brokers, always looking to build internal linkages. Answer: C Explanation: Ambidextrous behaviors include the following: (1) Individuals take time and are alert to opportunities beyond the confines of their own jobs; (2) they are cooperative and seek out opportunities to combine their efforts with others; (3) they are brokers, always looking to build internal networks; and (4) they are multitaskers, who are comfortable wearing more than one hat. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-01 The definition of strategic management and its four key attributes. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 35) Ambidextrous behaviors in individuals illustrate how a dual capacity for ________ can be woven into the fabric of an organization at the individual level. A) alignment and adaptability B) alignment and transparency C) alignment and internal linkages D) alignment and efficiency Answer: A Explanation: A recent study involving 41 business units in 10 multinational companies identified four ambidextrous behaviors in individuals. Such behaviors are the essence of ambidexterity, and they illustrate how a dual capacity for alignment and adaptability can be woven into the fabric of an organization at the individual level. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-01 The definition of strategic management and its four key attributes. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation   36) The innovation paradox implies that consistency in products and services provokes a tension with the need for new products. This results in a conflict between A) stability and change. B) structure and culture. C) rewards and metrics. D) stability and metrics. Answer: A Explanation: The innovation paradox arises when a company must decide if it is to manage for today or tomorrow. A firm's long-term survival requires taking risks and learning from failure in the pursuit of new products and services. However, companies also need consistency in their products and services. Thus there develops a tension between existing products and new ones, between stability and change. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-01 The definition of strategic management and its four key attributes. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 37) According to Henry Mintzberg, the final realized strategy of a firm is A) a combination of deliberate and emergent strategies. B) a combination of deliberate and differentiation strategies. C) not deliberate. D) a result of unrealized intended strategy. Answer: A Explanation: The final realized strategy of any firm is a combination of deliberate and emergent strategies. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-02 The strategic management process and its three interrelated and principal activities. Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation   38) ________ may be considered the advance work that must be done in order to effectively formulate and implement strategies. A) Goal setting B) Corporate entrepreneurship C) Strategy analysis D) Organizational design Answer: C Explanation: Strategy analysis may be looked upon as the starting point of the strategic management process. It consists of the advance work that must be done in order to effectively formulate and implement strategies. Difficulty: 1 Easy Topic: Strategy and the Strategic Management Process Learning Objective: 01-02 The strategic management process and its three interrelated and principal activities. Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 39) Strategy analysis is the starting point of the strategic management process and consists of the A) analysis only of the vision, mission, and objectives of the firm. B) analysis of the relevant internal and external environmental factors only. C) analysis of relevant competitors only. D) matching of vision, mission, and objectives with the relevant internal and external environmental factors. Answer: D Explanation: Strategy analysis may be looked upon as the starting point of the strategic management process. It consists of the advance work that must be done in order to effectively formulate and implement strategies. Many strategies fail because managers may want to formulate and implement strategies without a careful analysis of the overarching goals of the organization and without a thorough analysis of its external and internal environments. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-02 The strategic management process and its three interrelated and principal activities. Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation   40) Strategy formulation at the business level addresses best how to compete in a given business A) to attain competitive advantage. B) to reduce costs. C) to decrease buyer power. D) to thwart entry of new rivals. Answer: A Explanation: Business-level strategy addresses the issue of how to compete in a given business to attain competitive advantage. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-02 The strategic management process and its three interrelated and principal activities. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 41) Corporate level strategy focuses on what businesses to compete in and A) how business can be managed to achieve synergy. B) how business can be managed to reduce synergy. C) how the firm can work as a stand-alone entity. D) how the firm can create more value by operating alone. Answer: A Explanation: Corporate-level strategy focuses on two issues: (a) what businesses to compete in and (b) how businesses can be managed to achieve synergy; that is, they create more value by working together than by operating as stand-alone businesses. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-02 The strategic management process and its three interrelated and principal activities. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation   42) Corporate-level strategy looks at how to manage the ________ of its businesses to create synergies. A) portfolio B) stock prices C) competitors D) market pricing Answer: A Explanation: Corporate-level strategy addresses a portfolio (or group) of businesses of the firm. It addresses: (1) what business (or businesses) should we compete in and (2) how can we manage this portfolio of businesses to create synergies among the businesses. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-02 The strategic management process and its three interrelated and principal activities. Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 43) Entering foreign markets requires firms to ascertain foremost how they will attain A) market share. B) low costs. C) competitive advantage. D) low returns on investment. Answer: C Explanation: When firms enter foreign markets, they face both opportunities and pitfalls. Managers must decide not only on the most appropriate entry strategy but also how they will go about attaining competitive advantages in international markets. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-02 The strategic management process and its three interrelated and principal activities. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation   44) New value creation is a major engine for economic growth and is the main focus of ________ strategy. A) portfolio B) corporate-level C) business-level D) entrepreneurial Answer: D Explanation: Entrepreneurial activity aimed at new value creation is a major engine for economic growth. For entrepreneurial initiatives to succeed, viable opportunities must be recognized and effective strategies must be formulated. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-02 The strategic management process and its three interrelated and principal activities. Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation 45) Two types of strategic control that firms must exercise for good strategy implementation are A) informational and confrontational. B) confrontational and behavioral. C) behavioral and financial. D) informational and behavioral. Answer: D Explanation: Firms must exercise two types of strategic control. First, informational control requires that organizations continually monitor and scan the environment and respond to threats and opportunities. Second, behavioral control involves the proper balance of rewards and incentives as well as cultures and boundaries (or constraints). Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-02 The strategic management process and its three interrelated and principal activities. Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation   46) Effective organizational design means that firms must have ________ that are consistent with their strategy. A) designs and plans B) organizational structures and designs C) adopters and designs D) adopters and plans Answer: B Explanation: Firms must have organizational structures and designs that are consistent with their strategy. In the rapidly changing competitive environments today, firms must ensure that their organizational boundaries (those internal to the firm and external) are more flexible and permeable. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-02 The strategic management process and its three interrelated and principal activities. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 47) Learning organizations permit the entire organization to benefit from ________ talents. A) internal and external B) individual and collective C) internal and collective D) external and individual Answer: B Explanation: Given rapid and unpredictable change, leaders must create a learning organization so that the entire organization can benefit from individual and collective talents. Difficulty: 1 Easy Topic: Strategy and the Strategic Management Process Learning Objective: 01-02 The strategic management process and its three interrelated and principal activities. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation   48) Effective leaders set a direction and develop an organization so that it is committed to excellence and ________ behavior. A) performant B) strategic C) ethical D) positive Answer: C Explanation: Effective leaders set a direction, design the organization, and develop an organization that is committed to excellence and ethical behavior. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-02 The strategic management process and its three interrelated and principal activities. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 49) Strategies should be formulated that enhance foremost the ________ capacity of a firm. A) innovative B) learning C) implementation D) business-level Answer: A Explanation: Firms must continually improve and grow as well as find new ways to renew their organizations. Corporate entrepreneurship and innovation provide firms with new opportunities, and strategies should be formulated that enhance the innovative capacity of the firm. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-02 The strategic management process and its three interrelated and principal activities. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation   50) Strategy implementation can be the most difficult part of the strategic management process. Which of the following is not likely to be a cause of implementation failure? A) leadership B) competition C) coordination and integration of activities within and outside of the firm D) organizational commitment to excellence Answer: B Explanation: Strategy implementation involves ensuring proper strategic controls and organizational designs, which includes establishing effective means to coordinate and integrate activities within the firm as well as with its suppliers, customers, and alliance partners. Leadership plays a central role, ensuring that the organization is committed to excellence and ethical behavior. It also promotes learning and continuous improvement and acts entrepreneurially in creating new opportunities. Competition is not part of the implementation plan of the firm. It is considered earlier in the strategic management process. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-02 The strategic management process and its three interrelated and principal activities. Bloom's: Analyze AACSB: Analytical Thinking Accessibility: Keyboard Navigation 51) In the interview with Admiral William H. McRaven, he suggests that several duties, responsibilities and organizational relationships are similar between his military career activity and his role as chancellor. He says that he is a servant leader. Which of the following lessons is not one from his military career? A) Change cannot be made without understanding the organizational environment. B) A leader must establish relationships early by reaching out to stakeholders within and external to the organization. C) Communication and collaboration need to be reinforced by the organizational culture. D) Actions must be moral, legal, ethical, and judgmental. Answer: D Explanation: Actions must be moral, legal, and ethical. Judgment is important in maintaining personal integrity but actions should not be judgmental in nature. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-02 The strategic management process and its three interrelated and principal activities. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation   52) The three participants in corporate governance are the shareholders, A) board of directors, and employees. B) labor unions, and employees. C) board of directors, and management. D) banks and lending institutions, and management. Answer: C Explanation: The primary participants in corporate governance are: (1) the shareholders, (2) the management (led by the chief executive officer), and (3) the board of directors. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-02 The strategic management process and its three interrelated and principal activities. Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 53) While working to prioritize and fulfill their responsibilities, members of the board of directors of an organization should A) represent their own interests. B) represent the interests of the shareholders. C) direct all actions of the CEO. D) emphasize the importance of short-term goals. Answer: B Explanation: The board of directors (BOD) consists of the elected representatives of the shareholders charged with ensuring that the interests and motives of management are aligned with those of the owners (i.e., shareholders). Difficulty: 2 Medium Topic: Corporate Governance Learning Objective: 01-03 The strategic role of corporate governance and stakeholder management, as well as how "symbiosis" can be achieved among an organization's stakeholders. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation   54) Members of boards of directors are A) appointed by the Securities and Exchange Commission. B) elected by the shareholders as their representatives. C) elected by the public. D) only allowed to serve one term of four years. Answer: B Explanation: The board of directors (BOD) consists of the elected representatives of the shareholders charged with ensuring that the interests and motives of management are aligned with those of the owners (i.e., shareholders). Difficulty: 2 Medium Topic: Corporate Governance Learning Objective: 01-03 The strategic role of corporate governance and stakeholder management, as well as how "symbiosis" can be achieved among an organization's stakeholders. Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 55) An organization is responsible to many different entities. In order to meet the demands of these groups, organizations must participate in stakeholder management. Stakeholder management means that A) interests of the stockholders are not the only interests that matter. B) stakeholders are second in importance to the stockholders. C) stakeholders and managers inevitably work at cross-purposes. D) all stakeholders receive financial rewards. Answer: A Explanation: A stakeholder can be defined as an individual or group, inside or outside the company, that has a stake in and can influence the performance of an organization. Each stakeholder group makes various claims on the company. Five key stakeholders have been identified in all organizations: owners, customers, suppliers, employees, and society at large. Successful firms go beyond an overriding focus on satisfying solely the interests of owners. Rather, they recognize the inherent conflicts that arise among the demands of the various stakeholders, as well as the need to endeavor to attain symbiosis among the various stakeholder groups. Difficulty: 1 Easy Topic: Corporate Governance Learning Objective: 01-03 The strategic role of corporate governance and stakeholder management, as well as how "symbiosis" can be achieved among an organization's stakeholders. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation   56) Stakeholders are A) a new way to describe stockholders. B) individuals, groups, and organizations who have a stake in the success of the organization. C) creditors who hold a lien on the assets of the organization. D) attorneys and their clients who sue the organization. Answer: B Explanation: Stakeholders are those individuals, groups, and organizations that have a stake in the success of the organization, including owners (shareholders in a publicly held corporation), employees, customers, suppliers, the community at large, and so on. Difficulty: 1 Easy Topic: Corporate Governance Learning Objective: 01-03 The strategic role of corporate governance and stakeholder management, as well as how "symbiosis" can be achieved among an organization's stakeholders. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 57) Procter and Gamble has perfected a technique for compacting cleaning powder into a liquid concentration. Consumers, retailers, shipping and wholesalers, and environmentalists all have benefited from the resulting change in consumer shopping habits and the revolution in industry supply-chain economics. According to the text, this is an example of A) zero-sum relationship among stakeholders. B) stakeholder symbiosis. C) rewarding stakeholders. D) emphasizing financial returns. Answer: B Explanation: Organizations can achieve mutual benefit through stakeholder symbiosis, which recognizes that stakeholders are dependent upon each other for their success and well-being. Difficulty: 2 Medium Topic: Corporate Governance Learning Objective: 01-03 The strategic role of corporate governance and stakeholder management, as well as how "symbiosis" can be achieved among an organization's stakeholders. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation   58) There are several perspectives of competition. One perspective is zero-sum thinking. Zero-sum thinking means that A) all parts of the organization gain at no loss. B) in order for someone to gain others must experience no gain or benefit. C) one can only gain at the expense of someone else. D) everyone in the organization shares gains and losses equally. Answer: C Explanation: In the zero-sum view, the role of management is to look upon the various stakeholders as competing for the resources of the organization. In essence, the gain of one individual or group is the loss of another individual or group. Difficulty: 2 Medium Topic: Corporate Governance Learning Objective: 01-03 The strategic role of corporate governance and stakeholder management, as well as how "symbiosis" can be achieved among an organization's stakeholders. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 59) Managers should do more than focus on short-term financial performance. One concept that helps managers do this is stakeholder symbiosis. This means that A) stakeholders are dependent on each other for their success. B) stakeholders look out for their individual interests. C) one can only gain at the expense of someone else. D) all stakeholders want to maximize shareholder returns. Answer: A Explanation: Organizations can achieve mutual benefit through stakeholder symbiosis, which recognizes that stakeholders are dependent upon each other for their success and well-being. Difficulty: 1 Easy Topic: Corporate Governance Learning Objective: 01-03 The strategic role of corporate governance and stakeholder management, as well as how "symbiosis" can be achieved among an organization's stakeholders. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation   60) Employee stakeholders are concerned with A) taxes, warranties, and regulations. B) wages, benefits, and job security. C) good citizenship behavior. D) dividends. Answer: B Explanation: Employees as a stakeholder group are concerned with wages, benefits, safe working environment, and job security. Difficulty: 2 Medium Topic: Corporate Governance Learning Objective: 01-03 The strategic role of corporate governance and stakeholder management, as well as how "symbiosis" can be achieved among an organization's stakeholders. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 61) Stockholders as a stakeholder group are interested primarily in A) payment of interest and repayment of principal. B) value and warranties. C) dividends and capital appreciation. D) taxes and compliance with regulations. Answer: C Explanation: Stockholders are interested in dividends and capital appreciation. Difficulty: 1 Easy Topic: Corporate Governance Learning Objective: 01-03 The strategic role of corporate governance and stakeholder management, as well as how "symbiosis" can be achieved among an organization's stakeholders. Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation   62) Wall Street executives have received excessive bonus pay in the past. This concerns which of the following stakeholder groups most directly? A) government B) suppliers C) creditors D) stockholders Answer: D Explanation: For example, JPMorgan CEO Jamie Dimon was the highest-paid banker with $23.1 million in compensation, an 11 percent increase from the previous year. The shareholders of the firm did not do as well because the stock fell 20 percent. Difficulty: 3 Hard Topic: Corporate Governance Learning Objective: 01-03 The strategic role of corporate governance and stakeholder management, as well as how "symbiosis" can be achieved among an organization's stakeholders. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation 63) Supplier stakeholders are concerned with A) assurance of a continued relationship with the firm. B) employee benefits. C) safe working conditions. D) capital appreciation. Answer: A Explanation: Supplier stakeholders are concerned with on-time payment and assurance of a continued relationship with the firm. Difficulty: 2 Medium Topic: Corporate Governance Learning Objective: 01-03 The strategic role of corporate governance and stakeholder management, as well as how "symbiosis" can be achieved among an organization's stakeholders. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation   64) Community stakeholders are concerned primarily with A) product warranties. B) corporate citizenship behavior. C) capital appreciation. D) repayment of principal. Answer: B Explanation: Community stakeholders are concerned with good citizenship behavior such as charities, employment, and not polluting the environment. Difficulty: 2 Medium Topic: Corporate Governance Learning Objective: 01-03 The strategic role of corporate governance and stakeholder management, as well as how "symbiosis" can be achieved among an organization's stakeholders. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 65) Firms must be aware of goals other than short-term profit maximization. One area of concern should be social responsibility, which is the A) expectation that business will strive to improve the overall welfare of society. B) idea that organizations are solely responsible to local citizens. C) fact that court costs could impact the financial bottom line. D) idea that businesses are responsible for maintaining a healthy social climate for their employees. Answer: A Explanation: Social responsibility is the expectation that businesses or individuals will strive to improve the overall welfare of society. From the perspective of a business, this means that managers must take active steps to make society better by virtue of the business being in existence. Difficulty: 2 Medium Topic: Corporate Governance Learning Objective: 01-04 The importance of social responsibility, including environmental sustainability, and how it can enhance a corporation's innovation strategy. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation   66) According to the text, the triple bottom line approach to corporate accounting includes which three components? A) financial, environmental, and customer B) financial, organizational, and customer C) financial, environmental, and social D) financial, organizational, and psychological Answer: C Explanation: Many companies are now measuring what has been called a triple bottom line. This involves assessing financial, social, and environmental performance. Difficulty: 2 Medium Topic: Corporate Social Responsibility and Sustainability Learning Objective: 01-04 The importance of social responsibility, including environmental sustainability, and how it can enhance a corporation's innovation strategy. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 67) A key stakeholder group that is particularly susceptible to corporate social responsibility (CSR) initiatives is A) suppliers. B) rivals. C) government agencies. D) consumers. Answer: D Explanation: A key stakeholder group that appears to be particularly susceptible to corporate social responsibility (CSR) initiatives is customers. Surveys indicate a strong positive relationship between CSR behaviors and consumer reaction to products and services of a firm. Difficulty: 2 Medium Topic: Corporate Social Responsibility and Sustainability Learning Objective: 01-04 The importance of social responsibility, including environmental sustainability, and how it can enhance a corporation's innovation strategy. Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation   68) According to the Corporate Citizenship poll conducted by Cone Communications, most Americans say they would be likely to switch brands to one associated with a good cause, if there are similarities between A) price and availability. B) availability and quality. C) price and quality. D) price and durability. Answer: C Explanation: A Corporate Citizenship poll conducted by Cone Communications found that 84 percent of Americans say they would be likely to switch brands to one associated with a good cause, if price and quality are similar. Difficulty: 2 Medium Topic: Corporate Social Responsibility and Sustainability Learning Objective: 01-04 The importance of social responsibility, including environmental sustainability, and how it can enhance a corporation's innovation strategy. Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 69) According to a CEO survey by Accenture, ________ are not mutually exclusive corporate goals. A) quality and profitability B) sustainability and profitability C) ROI and quality D) availability and ROI Answer: B Explanation: A CEO survey on sustainability by Accenture debunks the notion that sustainability and profitability are mutually exclusive corporate goals. The study found that sustainability is being increasingly recognized as a source of cost efficiencies and revenue growth. Difficulty: 2 Medium Topic: Corporate Social Responsibility and Sustainability Learning Objective: 01-04 The importance of social responsibility, including environmental sustainability, and how it can enhance a corporation's innovation strategy. Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation   70) The ROI on sustainability efforts can be difficult to quantify because A) an excess of necessary data for accurate calculation is readily available. B) benefits from such projects are tangible. C) the payback period is on a different time frame. D) the payback period is on the same time frame. Answer: C Explanation: The ROIs on sustainability projects are often very difficult to quantify for a number of reasons. Among these are: (1) the data necessary to calculate ROI accurately are often not available when it comes to sustainability projects; (2) many of the benefits from such projects are intangible; and (3) the payback period is on a different time frame. Difficulty: 2 Medium Topic: Corporate Social Responsibility and Sustainability Learning Objective: 01-04 The importance of social responsibility, including environmental sustainability, and how it can enhance a corporation's innovation strategy. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 71) Sustainability programs often find their success beyond company boundaries, thus ________ systems and ________ metrics cannot capture all of the relevant numbers. A) external; bio B) internal; process C) external; external D) internal; internal Answer: B Explanation: The data necessary to calculate ROI accurately are often not available when it comes to sustainability projects. However, sustainability programs may often find their success beyond company boundaries, so internal systems and process metrics cannot capture all the relevant numbers. Difficulty: 2 Medium Topic: Corporate Social Responsibility and Sustainability Learning Objective: 01-04 The importance of social responsibility, including environmental sustainability, and how it can enhance a corporation's innovation strategy. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation   72) Traditional financial models are built around relatively easy-to-measure, monetized results; whereas, the benefits of sustainability projects involve A) clear tangibles. B) clear intangibles. C) fuzzy tangibles. D) fuzzy intangibles. Answer: D Explanation: Traditional financial models are built around relatively easy-to-measure, monetized results. Yet many of the benefits of sustainability projects involve fuzzy intangibles, such as the goodwill that can enhance firm brand equity. Difficulty: 2 Medium Topic: Corporate Social Responsibility and Sustainability Learning Objective: 01-04 The importance of social responsibility, including environmental sustainability, and how it can enhance a corporation's innovation strategy. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 73) The case for sustainability projects needs to be made on the basis of a more holistic and comprehensive understanding of all the ________ benefits. A) measurable and unmeasurable B) financial and physical C) tangible and intangible D) measurable and physical Answer: C Explanation: Clearly, the case for sustainability projects needs to be made on the basis of a more holistic and comprehensive understanding of all the tangible and intangible benefits rather than whether or not they meet existing hurdle rates for traditional investment projects. For example, 3M uses a lower hurdle rate for pollution prevention projects. Difficulty: 2 Medium Topic: Corporate Social Responsibility and Sustainability Learning Objective: 01-04 The importance of social responsibility, including environmental sustainability, and how it can enhance a corporation's innovation strategy. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation   74) Some benefits of sustainability projects include A) reducing risks. B) lagging behind regulations. C) displeasing communities. D) ignoring employee morale. Answer: A Explanation: The intangible benefits of sustainability projects such as reducing risks, staying ahead of regulations, pleasing communities, and enhancing employee morale are substantial, even when they are difficult to quantify. Difficulty: 1 Easy Topic: Corporate Social Responsibility and Sustainability Learning Objective: 01-04 The importance of social responsibility, including environmental sustainability, and how it can enhance a corporation's innovation strategy. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 75) Many organizations have a large number of functional areas with very diverse and sometimes competing interests. Such organizations will be most effective if A) each functional area focuses on achieving their own goals. B) goals are defined at the bottom and implemented at the top. C) functional areas work together to attain overall goals. D) management and employees have separate goals. Answer: C Explanation: Strategic management requires managers to take an integrative view of the organization and assess how all of the functional areas and activities fit together to help an organization achieve its goals and objectives. This cannot be accomplished if only the top managers in the organization take an integrative, strategic perspective of issues facing the firm, and everyone else fends for themselves in their independent, isolated functional areas. Instead, people throughout the organization must strive toward overall goals. Difficulty: 2 Medium Topic: Value of Strategic Leadership Learning Objective: 01-05 The need for greater empowerment throughout the organization. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation   76) Strategy formulation and implementation is a challenging ongoing process. To be effective, it should not involve A) the CEO and the board of directors. B) the board of directors, CEO, and CFO. C) rivals. D) line and staff managers. Answer: C Explanation: To develop and mobilize people and other assets, leaders are needed throughout the organization. No longer can organizations be effective if the top does the thinking, and the rest of the organization does the work. People throughout the organization must strive toward overall goals. Difficulty: 2 Medium Topic: Value of Strategic Leadership Learning Objective: 01-05 The need for greater empowerment throughout the organization. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 77) The text argues that a strategic perspective in an organization should be emphasized A) at the top of the organization. B) at the middle of the organization. C) throughout the organization. D) from the bottom up. Answer: C Explanation: No longer can organizations be effective if the top does the thinking, and the rest of the organization does the work. People throughout the organization must strive toward overall goals. Difficulty: 2 Medium Topic: Value of Strategic Leadership Learning Objective: 01-05 The need for greater empowerment throughout the organization. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation   78) Peter Senge, of MIT, recognized three types of leaders. ________ are individuals that, although having little positional power and formal authority, generate their power through the conviction and clarity of their ideas. A) Local line leaders B) Executive leaders C) Internal networkers D) Shop floor leaders Answer: C Explanation: Internal networkers, although they have little positional power and formal authority, generate their power through the conviction and clarity of their ideas. Difficulty: 1 Easy Topic: Value of Strategic Leadership Learning Objective: 01-05 The need for greater empowerment throughout the organization. Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 79) Peter Senge, of MIT, recognized three types of leaders. Which of the following describes individuals who champion and guide ideas, create learning infrastructure, and establish a domain for taking action? A) local line leaders B) executive leaders C) internal networkers D) shop floor leaders Answer: B Explanation: Executive leaders champion and guide ideas, create a learning infrastructure, and establish a domain for taking action. Difficulty: 1 Easy Topic: Value of Strategic Leadership Learning Objective: 01-05 The need for greater empowerment throughout the organization. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation   80) Leadership is a necessary (but not sufficient) condition for organizational success. Leaders should emerge at which level(s) of an organization? A) only at the top B) in the middle C) throughout the organization D) only during times of change Answer: C Explanation: To develop and mobilize people and other assets, leaders are needed throughout the organization. Difficulty: 2 Medium Topic: Value of Strategic Leadership Learning Objective: 01-05 The need for greater empowerment throughout the organization. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 81) Local line leaders have ________ responsibility. A) local B) executive C) profit-and-loss D) no Answer: C Explanation: Local line leaders have significant profit-and-loss responsibility. Difficulty: 2 Medium Topic: Value of Strategic Leadership Learning Objective: 01-05 The need for greater empowerment throughout the organization. Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 82) Internal networks generate their power through the ________ of their ideas. A) validity and correctness B) conviction and clarity C) validation and recognition D) approval and awareness Answer: B Explanation: Internal networkers have little positional power and formal authority, but generate their power through the conviction and clarity of their ideas. Difficulty: 2 Medium Topic: Value of Strategic Leadership Learning Objective: 01-05 The need for greater empowerment throughout the organization. Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation 83) Executive leaders champion and guide ideas by A) reinforcing ideas that did not work. B) creating a learning infrastructure. C) validating their formal authority. D) increasing their personal power. Answer: B Explanation: Executive leaders champion and guide ideas, create a learning infrastructure, and establish a domain for taking action. Difficulty: 2 Medium Topic: Value of Strategic Leadership Learning Objective: 01-05 The need for greater empowerment throughout the organization. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 84) Richard Branson, founder of the Virgin Group, empowers his companies through a(n) ________ structure in which anyone can bring forth new ideas. A) formal B) hierarchal C) multi-level D) informal Answer: D Explanation: Richard Branson, founder of the Virgin Group, whose core businesses include retail operations, hotels, communications, and an airline, is well known for creating an informal structure and culture where anyone in the organization can be involved in generating and acting on new business ideas. Difficulty: 2 Medium Topic: Value of Strategic Leadership Learning Objective: 01-05 The need for greater empowerment throughout the organization. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation   85) To inculcate a strategic management perspective, managers must create management ________ to foster change. A) processes B) buy-back C) structures D) edicts Answer: A Explanation: To inculcate a strategic management perspective, managers must create management processes to foster change. This involves planning, leading, and holding people accountable. Difficulty: 2 Medium Topic: Value of Strategic Leadership Learning Objective: 01-05 The need for greater empowerment throughout the organization. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 86) Netflix inculcates a strategic management perspective by A) emphasizing transparency. B) creating an environment of non-sharing. C) obliging a top-down management style. D) training only high potential employees. Answer: A Explanation: To inculcate a strategic management perspective, managers must create management processes to foster change. This involves planning, leading, and holding people accountable. At Netflix, leading people is not based on a position in the hierarchy, nor an individual trait that is taught to people identified as high potentials. The expectation is that anyone can take initiative, make decisions, and influence others consistent with the firm's strategy. Everyone gets and receives feedback from team members, supervisors, managers, and customers. As part of the overall system that emphasizes transparency, there is the shared belief at Netflix that good results depend on people providing their insights and perspectives. Getting alignment, direction, and obtaining results the right way is essential. Those who fail to achieve this are asked to leave the firm. Difficulty: 2 Medium Topic: Value of Strategic Leadership Learning Objective: 01-05 The need for greater empowerment throughout the organization. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation   87) For strategic management to be effective in achieving organizational goals, A) people throughout the organization must work in isolation. B) top managers only take an integrative, strategic perspective. C) leaders alone are responsible for the organizational outcome. D) people throughout the organization must strive toward overall goals. Answer: D Explanation: Strategic management requires managers to take an integrative view of the organization and assess how all of the functional areas and activities fit together to help an organization achieve its goals and objectives. This cannot be accomplished if only the top managers in the organization take an integrative, strategic perspective of issues facing the firm and everyone else fends for themselves in their independent, isolated functional areas. Instead, people throughout the organization must strive toward overall goals. Difficulty: 2 Medium Topic: Value of Strategic Leadership Learning Objective: 01-05 The need for greater empowerment throughout the organization. Bloom's: Analyze AACSB: Analytical Thinking Accessibility: Keyboard Navigation 88) Richard Branson of the Virgin Group believes that the ________ of a person should not dictate the level of influence their ideas should be accorded. A) age B) seniority C) position D) education Answer: C Explanation: Richard Branson, founder of the Virgin Group, whose core businesses include retail operations, hotels, communications, and an airline, is well known for creating a culture and an informal structure where anybody in the organization can be involved in generating and acting upon new business ideas. In an interview, he stated: "If someone has an idea, they can pick up the phone and talk to me. I can vote, ‘Done, let us do it.' Or, better still, they can just go ahead and do it. They know that they are not going to get a mouthful from me if they make a mistake." Difficulty: 2 Medium Topic: Value of Strategic Leadership Learning Objective: 01-05 The need for greater empowerment throughout the organization. Bloom's: Analyze AACSB: Analytical Thinking Accessibility: Keyboard Navigation   89) The hierarchy of organizational goals is in the following order (least specific to most specific): A) vision statements, strategic objectives, mission statements. B) mission statements, strategic objectives, vision statements. C) vision statements, mission statements, strategic objectives. D) mission statements, vision statements, strategic objectives. Answer: C Explanation: Organizations express priorities best through stated goals and objectives that form a hierarchy of goals, which includes its vision, mission, and strategic objectives. What visions may lack in specificity, they make up for in their ability to evoke powerful and compelling mental images. On the other hand, strategic objectives tend to be more specific and provide a more direct means of determining if the organization is moving toward broader, overall goals. Difficulty: 1 Easy Topic: The Roles of Vision, Mission, and Values in the Strategic Management Process Learning Objective: 01-06 How awareness of a hierarchy of strategic goals can help an organization achieve coherence in strategic decisions. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 90) Vision statements are used to create a better understanding of the overall purpose and direction of the organization. Vision statements A) are very specific. B) provide specific objectives. C) set organizational structure. D) are massively inspiring. Answer: D Explanation: A vision is a goal that is massively inspiring, overarching, and long term. Difficulty: 1 Easy Topic: The Roles of Vision, Mission, and Values in the Strategic Management Process Learning Objective: 01-06 How awareness of a hierarchy of strategic goals can help an organization achieve coherence in strategic decisions. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation   91) Effective vision statements include A) all strategic directions of the organization. B) a brief statement of the company's direction. C) strategic posturing and future objectives. D) financial objectives and projected figures. Answer: B Explanation: A vision is a goal that is massively inspiring, overarching, and long-term. It represents a destination that is driven by and evokes passion. What visions may lack in specificity, they make up for in their ability to evoke powerful and compelling mental images. Difficulty: 2 Medium Topic: The Roles of Vision, Mission, and Values in the Strategic Management Process Learning Objective: 01-06 How awareness of a hierarchy of strategic goals can help an organization achieve coherence in strategic decisions. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 92) WellPoint Health Network states: WellPoint will redefine our industry through a new generation of consumer-friendly products that put individuals back in control of their future. This is an example of a A) strategic objective. B) vision statement. C) vague statement of direction. D) line manager's individual goal. Answer: B Explanation: Effective visions provide a fundamental statement of the values, aspirations, and goals of an organization. Such visions go well beyond narrow financial objectives, of course, and strive to capture both the minds and hearts of employees. Difficulty: 2 Medium Topic: The Roles of Vision, Mission, and Values in the Strategic Management Process Learning Objective: 01-06 How awareness of a hierarchy of strategic goals can help an organization achieve coherence in strategic decisions. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation   93) Although such visions cannot be accurately measured by a specific indicator of how well they are being achieved, they do provide a fundamental statement of the ________ of an organization. A) values, aspirations, and goals B) expected returns and limitations C) outstanding debt D) credibility Answer: A Explanation: Although such visions cannot be accurately measured by a specific indicator of how well they are being achieved, they do provide a fundamental statement of organization values, aspirations, and goals. Such visions go well beyond narrow financial objectives, of course, and strive to capture both the minds and hearts of employees. Difficulty: 2 Medium Topic: The Roles of Vision, Mission, and Values in the Strategic Management Process Learning Objective: 01-06 How awareness of a hierarchy of strategic goals can help an organization achieve coherence in strategic decisions. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 94) In contrast to the vision of an organization, its mission should A) be shorter in length. B) encompass both the purpose of the company as well as the basis of competition. C) encompass all the major rules and regulations of the corporate work force. D) be less detailed. Answer: B Explanation: The mission statement of a company differs from its vision in that it encompasses both the purpose of the company as well as the basis of competition and competitive advantage. Difficulty: 1 Easy Topic: The Roles of Vision, Mission, and Values in the Strategic Management Process Learning Objective: 01-06 How awareness of a hierarchy of strategic goals can help an organization achieve coherence in strategic decisions. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation   95) The vision and mission statements of a company set the overall direction of the organization. Strategic objectives serve what role? A) operationalize the mission statement B) modify the mission statement C) are a shorter version of the mission statement D) are only clarified by the board of directors Answer: A Explanation: Strategic objectives are used to operationalize the mission statement. That is, they help to provide guidance on how the organization can fulfill or move toward the higher goals in the goal hierarchy, that of the mission and vision. Difficulty: 1 Easy Topic: The Roles of Vision, Mission, and Values in the Strategic Management Process Learning Objective: 01-06 How awareness of a hierarchy of strategic goals can help an organization achieve coherence in strategic decisions. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 96) Successful organizations are effective in motivating people. Employees work best when A) they are asked to do their best. B) work requirements are vague and unclear. C) they are striving toward specific goals. D) they are guided by an abstract mission statement. Answer: C Explanation: Challenging objectives can help to motivate and inspire employees to higher levels of commitment and effort. Much research has supported the notion that people work harder when they are striving toward specific goals instead of being asked simply to do their best. Difficulty: 2 Medium Topic: The Roles of Vision, Mission, and Values in the Strategic Management Process Learning Objective: 01-06 How awareness of a hierarchy of strategic goals can help an organization achieve coherence in strategic decisions. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation   97) Fortune Brands states they will cut corporate overhead costs by $30 million a year. This is an example of a A) nonfinancial strategic objective. B) financial strategic objective. C) vision statement. D) mission statement. Answer: B Explanation: Strategic objectives are used to operationalize the mission statement. This is an example of a financial strategic objective. Difficulty: 2 Medium Topic: The Roles of Vision, Mission, and Values in the Strategic Management Process Learning Objective: 01-06 How awareness of a hierarchy of strategic goals can help an organization achieve coherence in strategic decisions. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 98) Our goal is to help save 100,000 more lives each year. (Varian Medical Systems) This is an example of a A) nonfinancial strategic objective. B) financial strategic objective. C) vision statement. D) mission statement. Answer: A Explanation: Strategic objectives are used to operationalize the mission statement. This is an example of a nonfinancial strategic objective. Difficulty: 2 Medium Topic: The Roles of Vision, Mission, and Values in the Strategic Management Process Learning Objective: 01-06 How awareness of a hierarchy of strategic goals can help an organization achieve coherence in strategic decisions. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation   99) In large organizations, conflicts can arise between functional areas. In order to resolve these conflicts, strategic objectives A) put financial objectives above human considerations. B) align departments toward departmental goals. C) help resolve conflicts through their common purpose. D) cause debate and increase conflict. Answer: C Explanation: There is always the potential for different parts of an organization to pursue their own goals rather than overall company goals. Although well intentioned, these may work at cross-purposes to the organization as a whole. Meaningful objectives thus help to resolve conflicts when they arise. Difficulty: 2 Medium Topic: The Roles of Vision, Mission, and Values in the Strategic Management Process Learning Objective: 01-06 How awareness of a hierarchy of strategic goals can help an organization achieve coherence in strategic decisions. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 100) Which of the following is not an example of a financial strategic objective? A) Increase sales growth 6 percent to 8 percent and accelerate core net earnings growth from 13 percent to 15 percent per share in each of the next 5 years. (Procter & Gamble) B) Reduce volatile air emissions 15 percent by 2015 from 2010 base year, indexed to net sales. (3M) C) Generate Internet-related revenue of $1.5 billion. (AutoNation) D) Cut corporate overhead costs by $30 million per year. (Fortune Brands) Answer: B Explanation: Reduce volatile air emissions 15 percent by 2015 from 2010 base year, indexed to net sales (3M) is a nonfinancial strategic objective. Difficulty: 2 Medium Topic: The Roles of Vision, Mission, and Values in the Strategic Management Process Learning Objective: 01-06 How awareness of a hierarchy of strategic goals can help an organization achieve coherence in strategic decisions. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation   101) In large organizations, the potential exists for different parts of an organization to pursue its own goals rather than the overall company goals. Proper ________ can help to resolve conflicts when they arise. A) mission statements B) vision statements C) organization structure D) objectives Answer: D Explanation: As we noted earlier in the chapter, there is always the potential for different parts of an organization to pursue their own goals rather than overall company goals. Although well intentioned, these may work at cross-purposes to the organization as a whole. Meaningful objectives thus help to resolve conflicts when they arise. Difficulty: 2 Medium Topic: The Roles of Vision, Mission, and Values in the Strategic Management Process Learning Objective: 01-06 How awareness of a hierarchy of strategic goals can help an organization achieve coherence in strategic decisions. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 102) Using Apple, Alphabet, or Microsoft, explain how strategic management has led the company to industry dominance. Discuss the vision/mission of the company, its corporate objectives, and the leadership qualities that support this company's strategy. Be sure to use specific numerical outcomes as proof of your evaluation. Answer: Answers will vary. Difficulty: 3 Hard Topic: Strategy and the Strategic Management Process Learning Objective: 01-01 The definition of strategic management and its four key attributes. Bloom's: Analyze AACSB: Analytical Thinking Accessibility: Keyboard Navigation 103) Do corporate mission statements really matter? Justify your response with concrete industry examples. Answer: Answers will vary. Difficulty: 3 Hard Topic: Strategy and the Strategic Management Process Learning Objective: 01-01 The definition of strategic management and its four key attributes. Bloom's: Analyze AACSB: Analytical Thinking Accessibility: Keyboard Navigation   104) Explain how corporate governance mechanisms are used in the strategic management process. Illustrate the role of each stakeholder with industry examples. Answer: Answers will vary. Difficulty: 3 Hard Topic: Corporate Governance Learning Objective: 01-03 The strategic role of corporate governance and stakeholder management, as well as how "symbiosis" can be achieved among an organization's stakeholders. Bloom's: Analyze AACSB: Analytical Thinking Accessibility: Keyboard Navigation 105) Why do organizations need three types of leaders (local line leaders, executive leaders, internal networkers)? Use industry examples to support your answer. Answer: Answers will vary. Difficulty: 2 Medium Topic: Value of Strategic Leadership Learning Objective: 01-05 The need for greater empowerment throughout the organization. Bloom's: Evaluate AACSB: Analytical Thinking Accessibility: Keyboard Navigation 106) Strategic coherence is an essential element for assuring that a company's mission/vision is realized. Describe the factors that are involved in creating strategic coherence. Use an industry example to support your description and explain how the objectives meet the SMART criteria (Specific, Measurable, Appropriate, Realistic, Timely). Answer: Answers will vary. Difficulty: 3 Hard Topic: The Roles of Vision, Mission, and Values in the Strategic Management Process Learning Objective: 01-06 How awareness of a hierarchy of strategic goals can help an organization achieve coherence in strategic decisions. Bloom's: Analyze AACSB: Analytical Thinking Accessibility: Keyboard Navigation [Show More]

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