Deck 1: Strategic Management: Creating Competitiveadvantages

Question 1

The concept of shared value redefines the purpose of the corporation as creating shared value in order to create a more even distribution of the profits to all employees,not just top level executives.

Answer 1

False
Explanation: Shared value can be defined as policies and operating practices that enhance the competitiveness of a company, while simultaneously advancing the economic and social conditions in which it operates. It is not about personal values or sharing the value created by firms, which is a redistribution approach. Instead, it is about expanding the total pool of economic and social value.

Question 2

Social responsibility is the idea that organizations are not only accountable to stockholders but also to the community-at-large.

Answer 2

True
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.

Question 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 3

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.

Question 4

Former Chrysler vice chairman Robert Lutz observed that companies exist to serve the shareholder and create shareholder value.He insisted that the only person who owns the company is the person who paid good money for it.This is an example of a symbiotic approach to stakeholder management.

Question 5

Business-level strategy focuses on (1)what businesses to compete in,and (2)the management of the business portfolio to create synergy among its businesses.

Question 6

Strategic management recognizes the trade-offs between effectiveness and efficiency.

Question 7

Corporate-level strategy addresses how firms compete and outperform their rivals as well as achieve and sustain competitive advantages.

Question 8

Decisions by boards of directors are always consistent with shareholder interests.

Question 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.

Question 10

According to the text,formulating strategy includes taking into consideration strategy at the business,corporate,and international levels.

Question 11

The success Apple,Inc.achieved over the past decade was a direct result of the creative and forceful leadership of its late CEO,Steve Jobs.According to the text,this would be an example of the "romantic" perspective of leadership.

Question 12

According to Henry Mintzberg,a management scholar,most firms realize their original intended strategy.

Question 13

According to the textbook,strategic management does not consist of the analyses that an organization undertakes in order to create and sustain competitive advantages.

Question 14

The three interrelated and principal activities of strategic management are: strategy analysis,strategy formulation,and strategy implementation.

Question 15

Strategic management consists of the analyses,decisions,and actions an organization undertakes in order to create and sustain competitive advantages.

Question 16

Stockholders,employees,and the community-at-large are among the stakeholders of a firm.

Question 17

Symbiosis is the ability to recognize interdependencies among the interests of multiple stakeholders within and outside an organization.

Question 18

Procter and Gamble developed a laundry detergent compaction technique that appeals to consumers,retailers,shipping and wholesalers,and environmentalists.This is an example of stakeholder symbiosis.

Question 19

Effective leadership can play a large role in fostering corporate entrepreneurship.Corporate entrepreneurship can have a very positive impact on the bottom line of a firm.

Question 20

Stockholders in a company are the only individuals with an interest in the financial performance of the company.

Question 21

According to the text,a mission statement is an overarching statement that is massively inspiring,long term,and only discusses the purpose of the company.

Question 22

The four key attributes of strategic management include the idea that:

A) strategy must be directed toward overall organizational goals and objectives
B) strategy must be focused on long-term objectives
C) strategy must be focused on one specific area of an organization
D) strategy must focus on competitor strengths

Question 23

Some excellent examples of mission statements are: To be the happiest place on earth (Disneyland)and Restoring patients to full life (Medtronic).

Question 24

Strategic objectives are more specific than vision statements.

Question 25

According to the text,the strategic management process entails three ongoing processes:

A) analyses, actions, and synthesis
B) analyses, decisions, and actions
C) analyses, evaluation, and critique
D) analyses, synthesis, and antithesis

Question 26

Strategic management should only include short-term objectives.Long-term objectives are covered in the vision statement of the organization.

Question 27

Objectives in organizations should be clear,stated,and known by employees throughout the organization.

Question 28

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

Question 29

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.

Question 30

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

Question 31

A mission statement encompasses both the purpose of the organization as well as its basis of competition,and the basis of its competitive advantage.

Question 32

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 and hence it does not make a company different from others

Question 33

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.

Question 34

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

Question 35

Organizational goals and objectives should be vague in order to allow for changes in strategy.

Question 36

Strategic objectives should be measurable,specific,appropriate,and realistic,but not constrained by time deadlines.

Question 37

The organizational versus the individual rationality perspective suggests that:

A) what is good for a functional area is always good for the organization
B) what is good for the organization is always good for a functional area
C) what is best for a functional area may not be best for the organization
D) the incremental perspective may be best for functional areas while the "rational" perspective may be best for the organization

Question 38

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.

Question 39

The vision of an organization is the top level of its hierarchy of organizational goals.The vision statement should be massively inspiring,overarching,and long term.

Question 40

Effectiveness is often defined as:

A) doing things right
B) stakeholder satisfaction
C) doing the right thing
D) productivity enhancement

Question 41

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

Question 42

All of the following are ambidextrous behaviors EXCEPT:

A) taking initiative and being alert to opportunities beyond the confines of one's own job
B) being cooperative and seeking opportunities to combine one's efforts with 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

Question 43

The three participants in corporate governance are:

A) the shareholders, board of directors, and employees
B) the shareholders, labor unions, and employees
C) the shareholders, board of directors, and management
D) the shareholders, banks and lending institutions, and management

Question 44

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

Question 45

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

Question 46

According to the text,the triple bottom line approach to corporate accounting includes three components:

A) financial, environmental, and customer
B) financial, organizational, and customer
C) financial, environmental, and social
D) financial, organizational, and psychological

Question 47

Peter Senge,of MIT,recognized three types of leaders.__________ champion and guide ideas,create a learning infrastructure,and establish a domain for taking action.

A) Local line leaders
B) Executive leaders
C) Internal networkers
D) Shop floor leaders

Question 48

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) functional areas work together to attain overall goals
C) goals are defined at the bottom and implemented at the top
D) management and employees have separate goals

Question 49

Managers should do more than just 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

Question 50

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) competitors
D) line and staff managers

Question 51

Firms must be aware of goals other than short-term profit maximization.One area of concern should be social responsibility which is:

A) the expectation that business will strive to improve the overall welfare of society
B) the idea that organizations are solely responsible to local citizens
C) the fact that court costs could impact the financial bottom line
D) the idea that businesses are responsible to maintain a healthy social climate for their employees

Question 52

According to Henry Mintzberg,decisions following from the strategic analysis of the firm are its:

A) emergent strategy
B) deliberate strategy
C) intended strategy
D) realized strategy

Question 53

__________ 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

Question 54

According to Henry Mintzberg,the realized strategies of a firm:

A) are a combination of deliberate and emergent strategies
B) are a combination of deliberate and differentiation strategies
C) must be based on the strategic plan of the company
D) must be kept confidential for competitive reasons

Question 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

Question 56

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

Question 57

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

Question 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

Question 59

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

Question 60

__________ involves ensuring proper strategic controls and organizational designs.

A) Corporate governance
B) Corporate-level strategy
C) Strategy implementation
D) Business-level strategy

Question 61

The text discusses several characteristics of effective strategic objectives.List several of these and discuss why the strategic objectives of a firm should meet these criteria.

Question 62

A firm has a variety of stakeholders.Identify several possible stakeholders a firm may have and discuss how the firm may achieve stakeholder symbiosis.

Question 63

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) evoke powerful and compelling mental images

Question 64

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

Question 65

We want to be the top-ranked supplier to our customers.(PPG)This is an example of a:

A) nonfinancial strategic objective
B) financial strategic objective.
C) vision statement
D) mission statement

Question 66

The hierarchy of organizational goals is in this 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

Question 67

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

Question 68

Organizations must focus on financial and nonfinancial objectives.Select an organization and discuss possible financial and nonfinancial objectives the organization may have.

Question 69

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

Question 70

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

Question 71

According to the text,vision statements should be massively inspiring,overarching,and long term.Provide several examples of potential vision statements for various organizations and discuss how such vision statements would inspire employees around a cause.

Question 72

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

Question 73

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

Question 74

A mission statement encompasses the purpose of the company as well as the basis of competition and competitive advantage.Compare the purpose of a mission statement to that of a vision statement and a strategic objective.

Question 75

Examples of __________ include: To be the happiest place on earth (Disneyland),and Restoring patients to full life (Medtronic).

A) vision statements
B) mission statements
C) strategic objectives
D) operational objectives

Question 76

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.

Question 77

The strategic management process includes strategy analysis,strategy formulation,and strategy implementation.Discuss each of these steps.

Question 78

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

Question 79

Discuss the key elements of corporate governance.

Question 80

Leadership is a topic that is often discussed in the management literature.The text suggests that leaders should be at all levels in an organization.Discuss why it is important to have leaders throughout an organization.