Strategic management includes a process by which organizations analyze and learn from their internal and external environments.
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True
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External stakeholders are groups or individuals outside the organization that have a particular interest in and a major impact on the organization
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True
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Enactment is the process of influencing the environment through strategic actions.
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True
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Adaptation is the process associated with attempting to control the environment to make it less hostile and more conducive to organizational success.
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False
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Environmental determinism is the view that good management is associated with determining which strategy will best fit the environment and then carrying it out.
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True
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Stakeholder analysis includes identifying and prioritizing key stakeholders.
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True
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Strategic thinking deals with the rigid and systematic parts of the strategic management process.
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False
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Strategic management includes the following:
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A. Establishment of strategic direction
B. Implementation of strategies
C. Analysis of the internal environment
D. Strategic restructuring
E. All of these are true
Answer: E
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Domain direction and navigation pertain to which aspect of the strategic management process?
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Business strategy formulation
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Which of the following is not a stakeholder of an organization?
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A. Employees
B. Stockholders
C. Customers
D. Competitors
E. These are all stakeholders. None of the above answers is correct.
Answer: E
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All of the following are members of an organization's task environment except:
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Managers
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Threats:
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Can stand in the way of organizational competitiveness and stakeholder satisfaction
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Strategy formulation involves which of the following?
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Corporate-level, business-level, and functional-level strategy formulation
The selection of business areas in which the firm will compete
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Corporate-level decisions are typically made by:
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The CEO and/or board of directors
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Business-level strategy formulation pertains to:
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Domain direction and navigation
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Regarding strategy implementation and strategic control:
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Strategy implementation refers to the details of strategy execution whereas strategic control refers to ongoing evaluation of and adjustments to strategy
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The industrial organization economics perspective suggests that:
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The performance of an industry is dependent on the conduct of the firms it contains, which is dependent on the structure of the industry
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Enactment is the process of:
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Influencing the environment
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Adaptation is the process of:
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Responding to the environment
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According to the resource-based view of the firm:
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A. Organizational resources include physical resources such as plants
B. The characteristics of resources firms possess influences their financial performance
C. Organizational resources include knowledge
D. Organizational resources include organizational culture
E. All of these
Answer: E
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Managing for stakeholders means:
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More resources are allocated to satisfy stakeholders than would be necessary merely to retain their participation in the productive activities of the firm
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The advantages of managing for stakeholders include:
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A. Fewer negative responses from stakeholders such as legal suits or boycotts
B. Stakeholders often reciprocate
C. An excellent reputation
D. Increased strategic flexibility
E: All of these
Answer: E
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Which of the following is not an element of stakeholder analysis?
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Financially motivating stakeholders
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All of the following are associated with the global business environment except:
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Reduced competition among firms
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Individual organizations typically have only a marginal impact on the broad environment.
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True
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The broad environment consists of sociocultural forces, competitive forces, technological trends, and political/legal forces.
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False
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Government intervention in business is increasing worldwide.
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True
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Industries may be defined as a group of organizations that compete directly with one another to win orders or sales in the marketplace.
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True
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The three major forces that drive industry competition and profitability are government regulators, direct competitors and social forces.
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False: customers, suppliers and competitors
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The power of a single customer is greater when there are many customers than when there are few.
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False
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Organizations that are in a weak position relative to their suppliers can attempt to balance power through vertical integration.
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True
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Low levels of competition may be caused by high fixed costs.
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False
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A strategic group map involves plotting industry rivals based on two or more strategic dimensions that are important to the industry.
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True
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The higher the entry barriers, the more intense is competition in an industry.
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False
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Discriminating and demanding buyers in the home country of a firm can help the firm to succeed as it competes in foreign markets.
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True
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What is a primary reason that an organization should monitor the broad environment?
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To anticipate concerns and trends
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An organization can typically have:
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Little influence over major occurrences and patterns in the broad environment
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Which of the following is part of the broad environment?
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Technological forces
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The influence of potential competitors on industry competition is determined primarily by:
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Strength of entry barriers
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Customers tend to exhibit a powerful force on competition in the industry if:
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Purchases customers make from the industry are large relative to the amount spent for items from other industries
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High levels of competition may be caused by:
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Low exit barriers
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All of the following are true about environmental uncertainty except:
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Organizations feel most of its influence directly from the broad environment
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According to Michael Porter, all of the following are conditions that create advantages for firms in certain countries and industries except:
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Shortages of critical raw materials or other supplies
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Board members can play important strategic roles in organizations such as providing advice to managers with regard to strategies and strategic direction.
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True
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Organizations that cluster near each other typically are at a competitive disadvantage relative to organizations that are not in clusters.
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False
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Tacit knowledge can be communicated with precision through written means.
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False
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Human resource management is a basic activity in the value chain.
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False
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Stakeholder-based performance measures reflect more of the total value a firm creates.
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True
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A realized competitive advantage becomes sustainable when:
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It is based on a resource or capability that is difficult to imitate by competitors and there is no readily available substitute
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If an organizational capability or resource is valuable and unique, but it is easy to imitate:
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It can be a source of competitive advantage for a period of time
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Which of the following is most likely to be a source of sustainable competitive advantage?
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A research and development process
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Which ratio measures a firm's liquidity?
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Current
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Which ratio measures a firm's leverage?
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Debt-to-equity
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General organizational resources include such things as:
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Brands, culture, and an organization's reputation
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Basic activities of the value chain include:
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Marketing management
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Basic activities of the value chain include all of the following except:
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Strategic planning processes
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Support activities of the value chain include:
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Information technology
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Support activities of the value chain include:
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Human resources/compensation systems
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With regards to the value chain, an organization can develop a competitive advantage:
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A. In any of the basic or support activities
B. In the way basic and support activities are combined
C. In the way internal activities are linked to the external environment
D. Through activities that create value for the customer
E. All of these are ways to develop a competitive advantage
Answer: E
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The traditional view of leaders in organizations is that they set direction, make the important decisions, and rally the followers.
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True
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One important responsibility of boards of directors is to monitor and prevent the potential for agency problems.
The labels a firm uses for its written statements of strategic direction are just as important as the elements they contain.
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False
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It has been suggested that the business definition question should include not only "What is our business?" but also "What was our business?"
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False
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A mission statement may contain a statement of vision.
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True
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Sustainable development is defined as growth that is sustainable because there are so many available resources that they will virtually never run out.
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False
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In Collin's (Good to Great) leadership skills hierarchy, the skill that comes right after becoming a capable individual is:
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Becoming a team player
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All of the following are ways to encourage top managers to act in the best interests of the shareholders except:
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Including close personal friends of the CEO on the board of directors
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Strategic direction is reflected by:
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A. The organization's purpose
B. A definition of the organization's business or businesses
C. The organization's vision
D. The organizational mission
E. All of the above
Answer: E
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Factors that influence strategic direction include all of the following except:
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A. The firm's history
B. Social trends
C. Economic influences
D. Competitors
E. All of these factors influence strategic direction; there is no exception.
Answer: E
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The forces in a firm that work to maintain the status quo are called:
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Strategic inertia
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A mission statement often contains:
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An organization's vision
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The view of top management concerning what an organization can become is the organization's:
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Vision
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A business definition should contain answers to all of the following questions except:
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When should customer needs be satisfied?
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Values statements:
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A. Are sometimes incorporated into a mission statement
B. Help the firm define what it stands for
C. Help guide the behavior of employees
D. Define what matters when making decisions
E. All of the above
Answer: E
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Ethical dilemmas:
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Occur when the values of different stakeholder of the organization are in conflict over a particular issue
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Which of the following is not a major component of social responsibility?
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Political obligations
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Sustainable development can be defined in terms of an organization's practices with regard to all of the following except:
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Financial management
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