Question 1

Briefly compare and contrast the role and responsibility of a company's CEO and the board of directors in the strategy-making, strategy-executing process.

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Question 2

According to the Balanced Scorecard depicted in Table 2.4, boosting internal cash flows for reinvestment purposes, such as R&D, is a financial objective, while new product introductions, reduction of product development cycle time, improving information technology, improving teamwork, and increases in returns on equity are all strategic objectives.
-Strategy-making is

Accepted Answer

A)  primarily the responsibility of key executives rather than a task for a company's entire management team. 
B)  more of a collaborative group effort that involves all managers and sometimes key employees, as opposed to being the function and responsibility of a few high-level executives. 
C)  first and foremost the function and responsibility of a company's strategic planning staff. 
D)  first and foremost the function and responsibility of a company's board of directors. 
E)  first and foremost the function of a company's chief executive officer, who formulates strategic initiatives and submits them to the board of directors for approval.

Question 3

The benefit of a vivid, engaging, and convincing strategic vision is NOT its ability to

Accepted Answer

A)  crystallize top management's own view about the company's long-term direction. 
B)  reduce the risk of rudderless decision making by managers at all levels of the organization. 
C)  help an organization prepare for the future. 
D)  unite company personnel behind managerial efforts to get the company moving in the intended direction. 
E)  help company personnel understand the logic of the company's business model.

Question 4

What a company's top executives are saying about where the company is headed long term with respect to its future product-market-customer-technology mix

Accepted Answer

A)  indicates what kind of business model the company is going to have in the future. 
B)  constitutes the strategic vision for the company. 
C)  signals what the firm's emergent strategy will be. 
D)  serves to define the company's business plan. 
E)  indicates what kind of products and services the company plans to offer in the future.

Question 5

A company's overall strategy

Accepted Answer

A)  determines whether its strategic intent is proactive or reactive. 
B)  is subject to being changed much less frequently than either its objectives or its mission statement and thus serves as the base of its strategy-making pyramid. 
C)  should be based on a flexible strategic vision and strategic intent. 
D)  is customarily reviewed and approved level-by-level by the company board of directors. 
E)  is really a collection of strategic initiatives and actions devised by managers and key employees up and down the whole organizational hierarchy.

Question 6

Which of the following is NOT an example of a financial objective?

Accepted Answer

A)  Receive a bond rating of AA or higher. 
B)  Achieve a return on equity greater than ten percent. 
C)  Increase revenues at a pace greater than the rate of inflation. 
D)  Raise earnings per share by two percent. 
E)  Achieve a market share of nine percent.

Question 7

Identify the key characteristics of a well-stated organizational objective.

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Question 8

In a single-business company, the strategy-making hierarchy consists of

Accepted Answer

A)  business strategy, divisional strategies, and departmental strategies. 
B)  business strategy, functional strategies, and operating strategies. 
C)  business strategy and operating strategy. 
D)  managerial strategy, business strategy, and divisional strategies. 
E)  corporate strategy, divisional strategies, and departmental strategies.

Question 9

A well-conceived strategic vision helps prepare a company for the future. True or false? Explain and justify your answer.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is NOT the result of a well-conceived and communicated strategic vision?

Accepted Answer

A)  Senior executives solidify their own view of the firm's long-term direction. 
B)  The risk of rudderless decision-making is minimized. 
C)  Organizational members support the changes internally that will help make the vision a reality. 
D)  The vision assists the organization in preparing for the future. 
E)  Stockholders protest that the business is rudderless.

Question 11

Which of the following is NOT an accurate description of the task of crafting a company's strategy?

Accepted Answer

A)  In most companies, crafting strategy is a team effort, involving managers and often key employees at many organization levels. 
B)  Ultimate responsibility for leading the strategy-making task rests with the chief executive officer. 
C)  The task of crafting strategy is best done by a company's chief strategic planning officer, who should report directly to the company's CEO and board of directors. 
D)  It is the responsibility and duty of a company's board of directors to ensure that new strategy proposals can be defended as superior to alternatives and, ultimately, to approve or disapprove of the strategy formulated and proposed by the company's management. 
E)  In most of today's companies, every company manager has a strategy-making role, ranging from major to minor, for his or her area of responsibility.

Question 12

Which of the following are integral parts of the managerial process of crafting and executing strategy?

Accepted Answer

A)  developing a strategic vision, Strategic Management, and crafting a strategy 
B)  developing a proven business model, deciding on the company's strategic intent, and crafting a strategy 
C)  Strategic Management, crafting a strategy, implementing and executing the chosen strategy, and deciding how much of the company's resources to employ in the pursuit of sustainable competitive advantage 
D)  coming up with a statement of the company's mission and purpose, Strategic Management, choosing what business approaches to employ, selecting a business model, and monitoring developments 
E)  deciding on the company's strategic intent, setting financial objectives, crafting a strategy, and choosing what business approaches and operating practices to employ

Question 13

What are the duties of a company's board of directors in the strategy-making, strategy-executing process?

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Question 14

The primary difference between a company's mission statement and the company's strategic vision is that

Accepted Answer

A)  a mission statement explains why it is essential to make a profit, whereas the strategic vision explains how the company will be a moneymaker. 
B)  a mission statement typically concerns a company's present business scope and purpose, whereas a strategic vision sets forth "where we are going and why." 
C)  a mission deals with how to please customers, whereas a strategic vision deals with how to please shareholders. 
D)  a mission statement deals with "where we are headed," whereas a strategic vision provides the critical answer to "how will we get there?" 
E)  a mission statement addresses "how we are trying to make a profit today," while a strategic vision concerns "how will we make money in the markets of tomorrow?"

Question 15

Operating strategies are primarily concerned with

Accepted Answer

A)  what the firm's operating departments are doing and plan to do to unify the company's functional and business strategies. 
B)  the specific plans for building competitive advantage in each major department and operating unit. 
C)  how to manage initiatives of strategic significance within each functional area, and adding detail and completeness in ways that support functional strategies and the overall business strategy. 
D)  how best to carry out the company's corporate strategy. 
E)  how best to implement and execute the company's different business-level strategies.

Question 16

The task of stitching together a strategy

Accepted Answer

A)  entails addressing a series of hows: how to grow the business, how to please customers, how to outcompete rivals, how to respond to changing market conditions, and how to achieve strategic and financial objectives. 
B)  is primarily an exercise in deciding which of several freshly emerging market opportunities to pursue. 
C)  is mainly an exercise that should be dictated by what is comfortable to management from a risk perspective and what is acceptable in terms of capital requirements. 
D)  requires trying to copy the strategies of industry leaders as closely as possible. 
E)  is mainly an exercise in good planning.

Question 17

Which of the following most accurately describes the task of crafting a company's strategy?

Accepted Answer

A)  In most companies, strategy-making is the exclusive province of top management-owner-entrepreneurs, CEOs, and other very senior executives. 
B)  The more a company's operations cut across different products, industries, and geographical areas, the more that headquarters executives have little option but to delegate considerable strategy-making authority to down-the-line managers in charge of particular subsidiaries, product lines, geographic sales offices, and plants. 
C)  A company's board of directors generally takes the lead role in crafting a company's strategy. 
D)  In most of today's companies, the lead strategy-making role is being assumed by an elite group of corporate entrepreneurs. 
E)  Masterful strategies are nearly always the product of brilliant corporate entrepreneurs.

Question 18

Which of the following is NOT a characteristic of an effectively worded strategic vision statement?

Accepted Answer

A)  directional (is forward-looking, describes the strategic course that management has charted that will help the company prepare for the future) 
B)  easy to communicate (is explainable in 5-10 minutes, and can be reduced to a memorable slogan) 
C)  graphic (paints a picture of the kind of company management is trying to create and the market position(s) the company is striving to stake out) 
D)  consensus-driven (commits the company to a "mainstream" directional path that almost all stakeholders will enthusiastically support) 
E)  focused (provides guidance to managers in making decisions and allocating resources)

Question 19

When companies adopt the strategy-making and strategy-execution process, it requires they start by

Accepted Answer

A)  developing a strategic vision, mission, and values. 
B)  developing a proven business model, deciding on the company's top management team, and crafting a strategy. 
C)  Strategic Management, developing a business model, crafting a strategy, and deciding how much of the company's resources to employ in the pursuit of sustainable competitive advantage. 
D)  coming up with a statement of the company's mission and communicating it to all employees, Strategic Management, selecting a business model, and monitoring developments and initiating corrective adjustments to the business model when necessary. 
E)  deciding on the company's board of directors, setting financial objectives, crafting a strategy, and choosing what business approaches and operating practices to employ.

Question 20

Discuss the meaning of each of the following levels of strategy and indicate what level of management tends to take the lead responsibility for crafting the strategy at each of the four levels. a. corporate strategy
b. business strategy
c. functional-area strategy
d. operating strategy

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Exam 2: Leading the Process of Crafting and Executing Strategy