Deck 1: Introduction to Strategic Management

Question 1

Resources are considered rare when they allow firms to exploit opportunities in the external environment.

Answer 1

False

Question 2

A stakeholder approach to strategic management is highly pertinent to a central problem management is facing today - a general lack of trust of corporations and their managers.

Answer 2

True

Question 3

An organization's "dream" is its strategic mission created by organizational strategists.

Answer 3

False

Question 4

The I/O (Industrial Organization) model argues that core competencies are the basis of a firm's competitive advantage.

Question 5

Information or intelligence does not help the organization compete unless it is transformed into usable knowledge and diffused rapidly throughout the firm.

Question 6

The I/O (Industrial Organization) model assumes that a firm's unique resources and capabilities are its main source of above-average returns.

Question 7

Businesses that have become uncompetitive because of an inability to make necessary changes for continued success are even more common than businesses that fail.

Question 8

Customers,suppliers,unions,and local governments are examples of capital market stakeholders.

Question 9

Average returns are returns in excess of what an investor expects to earn from other investments with a similar amount of risk.

Question 10

Firms must provide enough flexibility in their strategic management process to allow for the incorporation of new ideas with high potential.

Question 11

In a hypercompetitive market,firms often aggressively challenge their competitors in hopes of improving their competitive position and ultimately their performance.

Question 12

E-culture is the unique organizational environment created by Internet-based firms.

Question 13

The strategic management process requires the making of only a single decision about the overall strategy of a firm.

Question 14

Strategic thinking ignores the past and only focuses on value creation in the future.

Question 15

The I/O model suggests that above-average returns are earned when firms implement the strategy dictated by the characteristics of the general,industry,and competitive environments.

Question 16

Organizations must choose between the Industrial Organization Model and the Resource-Based Model when it sets out on the strategic management process.

Question 17

Employees,managers,and non-managers are examples of organizational stakeholders.

Question 18

The resource-based model assumes that firms may form a competitive advantage by having resources that are rare or costly to imitate.

Question 19

A sustained or sustainable competitive advantage occurs when a firm has implemented a value-creating strategy that current competitors currently do not have,even if they are able to duplicate that strategy in the near future.

Question 20

The strategic management process is an informal approach to helping firms respond effectively to the competitive environment.

Question 21

An aspect of global competition is that it has increased performance standards in many dimensions.These dimensions do NOT include:

A) production cost.
B) quality of product.
C) social responsibility.
D) decreased production time.

Question 22

Corporate-level strategy is concerned with how a diversified firm competes in each industry in which it is active.

Question 23

Two of the primary drivers of the new competitive landscape are:

A) slow technological changes and increased inflation.
B) emergence of a global economy and rapid technological change.
C) increased competition and decreasing tariffs.
D) increased availability of capital and increased competition.

Question 24

Which of the following is NOT an assumption of the resource-based model?

A) Each firm is a unique collection of resources and capabilities.
B) All firms possess the same strategically relevant resources.
C) Resources are not highly mobile across firms.
D) Firms acquire different resources and capabilities over time.

Question 25

What has a firm achieved when it successfully formulates and implements a value-creating strategy?

A) Value creation
B) A permanently sustainable competitive advantage
C) Substantial returns
D) Average returns

Question 26

When utilizing the Industrial Organization,or I/O,model the key to success for a firm is:

A) proper utilization of the firm's human resources.
B) selecting the most attractive industry in which to compete.
C) identifying the firm's key competitive advantage.
D) developing the firm's unique resources and capabilities.

Question 27

Research into the causes of firm profitability suggests a reciprocal relationship between ____ and ____ affects firm performance.

A) employee training,capital resources
B) the number of competitors,product innovation
C) the board of directors,corporate managers
D) the environment,firm strategy

Question 28

An organization's willingness to tolerate or encourage unethical behavior is a reflection of its core values.

Question 29

The Industrial Organization,or I/O model,argues that:

A) the characteristics of the general,industry,and competitor environments dictate successful organizational strategy.
B) the firm's internal resources and capabilities represent the foundation for development of a value-creating strategy.
C) internationalization in certain industries will lead to globalization.
D) firms should seek to maximize their returns by organizing their organizational structure in a manner consistent with the most efficient producers in any given industry.

Question 30

The strategic management process is:

A) a set of activities that is guaranteed to prevent organizational failure.
B) a process concerned with a firm's resources,capabilities,and competencies,but not the conditions in its external environment.
C) a set of activities that to date have not been used successfully in the not-for-profit sector.
D) a dynamic process involving the full set of commitments,decisions,and actions related to the firm.

Question 31

In the new competitive landscape,firms will attain competitive success by:

A) continuing current corporate strategies.
B) meeting,or exceeding,global standards.
C) avoiding challenges that change their capabilities.
D) committing more resources to international products.

Question 32

The advent of inexpensive digital cameras able to compete with film cameras may be an example of ____.

A) disruptive technology
B) global competition
C) perpetual innovation
D) hypercompetition

Question 33

Which of the following is a characteristic of the global economy?

A) The spread of economic innovations around the world
B) The free movement of goods,services,people,skills,and ideas across geographic borders
C) The increased use of artificial constraints,such as tariffs
D) The ability of a firm to be first to market its products in a developing country

Question 34

Which of the following is NOT an assumption of the Industrial Organization,or I/O,model?

A) Organizational decision makers are rational and committed to acting in the firm's best interests.
B) Resources to implement strategies are not highly mobile across firms.
C) The external environment is assumed to impose pressures and constraints that determine the strategies that result in superior performance.
D) Firms in given industries,or given industry segments,are assumed to control similar strategically relevant resources.

Question 35

The resource-based model of the firm argues that:

A) all resources have the potential to be the basis of sustained competitive advantage.
B) resources are not a source of potential competitive advantage.
C) the key to competitive success is the structure of the industry in which the firm competes.
D) resources that are valuable,rare,costly to imitate,and non-substitutable form the basis of a firm's core competencies.

Question 36

The I/O model and the resource-based view of the firm suggest conditions that firms should study in order to:

A) compete in domestic but not international markets.
B) examine strategic outputs achieved mainly in the last 5-year period.
C) engage in different sets of competitive dynamics.
D) develop the most effective strategy.

Question 37

Which of the following is NOT a criterion that must be met in order for resources and capabilities to become a competitive advantage under the resource-based model?

A) The resources and capabilities possessed by competitors are ordinary.
B) The resources and capabilities are costly to imitate when firms cannot obtain them.
C) The resources and capabilities have no structural equivalents.
D) The resources and capabilities are valuable if they can be used to exploit opportunities.

Question 38

A set of capabilities used to respond to various demands and opportunities existing in a dynamic and uncertain competitive environment is:

A) strategic flexibility.
B) disruptive technology.
C) information,intelligence and expertise.
D) performance standards.

Question 39

The resource-based view of the firm:

A) suggests that resources,as compared to capabilities,are more closely linked with sustainable competitive advantage.
B) argues that the industry environment has a stronger influence on firms' ability to implement strategies successfully than does the competitor environment.
C) calls for firms to focus on their homogeneous skills to compete against their rivals.
D) assumes that resources may not be mobile across firms.

Question 40

To achieve greater strategic flexibility,firms must:

A) hire additional personnel.
B) adapt quickly to changes in their competitive landscape.
C) report net losses for a period of three years.
D) acquire competing firms.

Question 41

Define value creation and above-average returns.

Question 42

Explain the strategic management process.

Question 43

Stakeholders' interests may conflict,and the organization must prioritize its stakeholders because it cannot satisfy them all.____ is the most critical criterion in prioritizing stakeholders

A) Power of each stakeholder
B) Urgency of satisfying each stakeholder
C) Importance of each stakeholder to the firm
D) Influence of each stakeholder

Question 44

A business-level strategy describes:

A) the businesses in which the company intends to compete.
B) all policies and procedures used in functional departments.
C) the firm's actions to exploit its competitive advantage over rivals.
D) a firm's resources,intent,and mission.

Question 45

____ has been effectively formed when employees believe fervently in their company's product and are totally focused on their firm's ability to outcompete its competitors.

A) A culture of success
B) Competitive vision
C) An organizational mission
D) Strategic intent

Question 46

To have the potential to become sources of competitive advantage,resources and capabilities must be valuable,____,and ____.

A) common,easy to imitate.
B) easy to imitate,difficult to implement.
C) rare,costly to imitate.
D) easy to implement,costly to imitate.

Question 47

Describe and discuss the resource-based model of the firm.

Question 48

Product market stakeholders include the firm's customers,and the principal concern of this stakeholder group is:

A) maximizing the firm's return on investment.
B) providing a stimulating career environment for employees.
C) to obtain reliable products at the lowest possible price.
D) increasing the profitability of the firm.

Question 49

Describe and discuss strategic intent and strategic mission.

Question 50

Strategic intent is primarily:

A) internally focused.
B) externally focused.
C) industry focused.
D) chief executive officer focused.

Question 51

Generally speaking,product market stakeholders are satisfied when:

A) a firm's profit margin yields the lowest return to capital market stakeholders that is acceptable to them.
B) a firm's profit margin yields an above-average return to its capital market stakeholders.
C) the interests of the firm's organizational stakeholders have been maximized.
D) a firm grounds its operations in the principles of the resource-based view of the firm rather than the principles of the I/O model.

Question 52

Strategic intent seeks to ensure that:

A) the goals of the firm are realistic.
B) the goals of the firm are non-specific in order to allow creativity.
C) only top-level managers are committed to the goals of the organization.
D) all of the organization's employees are focused on achieving the firm's goals.

Question 53

Describe the Industrial Organization,or I/O,model of strategy.

Question 54

In a diversified firm,corporate-level strategy is concerned with:

A) operating each individual business.
B) determining how each functional department of the firm will operate.
C) determining in which businesses to compete and how resources will be allocated between businesses.
D) maximizing product distribution over rivals.

Question 55

Describe an organization's various stakeholders and their different interests.

Question 56

What is the 21^st century competitive landscape?

Question 57

The strategic management process is intended to be a rational approach to help a firm:

A) analyze its position in the marketplace.
B) understand its rivals' competitive moves.
C) design an extensive mission statement.
D) respond effectively to the challenges of the competitive environment.

Question 58

Organizational stakeholders are usually satisfied when:

A) their return on investment has been maximized.
B) customers pay the highest sustainable price for the goods and services they receive.
C) companies are willing to be longer-term employers.
D) companies are growing and helping individuals develop their skills.