Strategic Management: A Competitive Advantage Approach, 14e
(David)
Chapter 1
The Nature of Strategic Management
1) Strategic
management focuses on integrating management, marketing, finance/accounting,
production/operations, research and development, and information systems to
achieve organizational success.
Answer: TRUE
Diff:
1 Page Ref: 5
Objective: 1.01 Describe the strategic-management
process.
Learning
Outcome: Define strategic management and
identify its basic concepts
2) Optimizing
for tomorrow the trends of today is the purpose of strategic management.
Answer: FALSE
Diff:
2 Page Ref: 5
Objective: 1.01 Describe the strategic-management
process.
Learning
Outcome: Define strategic management and
identify its basic concepts
3) Even though
useful, strategic planning has been cast aside by corporate America since the
early 1990s.
Answer: FALSE
Diff:
2 Page Ref: 5
Objective: 1.01 Describe the strategic-management
process.
Learning
Outcome: Define strategic management and
identify its basic concepts
4)
Resource allocation is included in strategy-formulation activities.
Answer: TRUE
Diff:
2 Page Ref: 5
Objective: 1.01 Describe the strategic-management
process.
Learning
Outcome: Define strategic management and
identify its basic concepts
5)
The terms strategic management and strategic planning are
synonymous in this text.
Answer: TRUE
Diff:
1 Page Ref: 5
Objective: 1.01 Describe the strategic-management
process.
Learning
Outcome: Define strategic management and
identify its basic concepts
6)
A vision statement identifies the scope of a firm's operations in product and
market terms.
Answer: FALSE
Diff:
1 Page Ref: 10
Objective: 1.03 Define and give examples of key terms in
strategic management.
Learning
Outcome: Discuss the functions of vision
statements, mission statements, and long-term corporate objectives
7)
Strategy implementation is often considered to be the most difficult stage in
the strategic-management process because it requires personal discipline,
commitment, and sacrifice.
Answer: TRUE
Diff:
2 Page Ref: 6
Objective: 1.04 Describe the nature of strategy
formulation, implementation, and evaluation activities.
Learning
Outcome: Define strategic management and
identify its basic concepts
8)
The final stage in strategic management is strategy implementation.
Answer: FALSE
Diff:
2 Page Ref: 6
Objective: 1.04 Describe the nature of strategy
formulation, implementation, and evaluation activities.
Learning
Outcome: Define strategic management and
identify its basic concepts
9)
Strategy formulation, implementation and evaluation activities occur at three
hierarchical levels in a large organization: corporate, divisional and
functional.
Answer: TRUE
Diff:
2 Page Ref: 6
Objective: 1.04 Describe the nature of strategy
formulation, implementation, and evaluation activities.
Learning
Outcome: Define strategic management and
identify its basic concepts
10)
One of the fundamental strategy evaluation activities is reviewing external and
internal factors that are the bases for current strategies.
Answer: TRUE
Diff:
2 Page Ref: 6
Objective: 1.04 Describe the nature of strategy
formulation, implementation, and evaluation activities.
Learning
Outcome: Define strategic management and
identify its basic concepts
11)
An objective, logical, systematic approach for making major decisions in an
organization is a way to describe the strategic-management process.
Answer: TRUE
Diff:
2 Page Ref: 6
Objective: 1.02 Explain the need for integrating
analysis and intuition in strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
12)
Strategic management is an attempt to organize qualitative and quantitative
information in a way that allows effective decisions to be made under
conditions of uncertainty.
Answer: TRUE
Diff:
2 Page Ref: 6
Objective: 1.02 Explain the need for integrating
analysis and intuition in strategic management.
Learning
Outcome: Describe how organizational
performance is measured
13)
Analytical and intuitive thinking should complement each other.
Answer: TRUE
Diff:
1 Page Ref: 7
Objective: 1.02 Explain the need for integrating
analysis and intuition in strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
14)
According to Albert Einstein, "Knowledge is far more important than
intuition."
Answer: FALSE
Diff:
3 Page Ref: 7
Objective: 1.02 Explain the need for integrating
analysis and intuition in strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
15)
Management by intuition can be defined as operating from the
"I've-already-made-up-my-mind-don't-bother- me-with-the-facts mode."
Answer: FALSE
Diff:
2 Page Ref: 7
Objective: 1.02 Explain the need for integrating
analysis and intuition in strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
16)
By occasionally monitoring external events, companies should be able to
identify when change is required.
Answer: FALSE
Diff:
1 Page Ref: 7
Objective: 1.01 Describe the strategic-management
process.
Learning
Outcome: Define strategic management and
identify its basic concepts
17)
Firms, like organisms, must be "adept at adapting" or they will not survive.
Answer: TRUE
Diff:
2 Page Ref: 7
Objective: 1.01 Describe the strategic-management
process.
Learning
Outcome: Define strategic management and
identify its basic concepts
18)
To say U.S. firms are being challenged in the automobile industry is an
inaccurate statement.
Answer: FALSE
Diff:
2 Page Ref: 8
Objective: 1.01 Describe the strategic-management
process.
Learning
Outcome: Define strategic management and
identify its basic concepts
19)
Anything the firm does especially well compared to rival firms could be
considered a competitive advantage.
Answer: TRUE
Diff:
1 Page Ref: 8
Objective: 1.03 Define and give examples of key terms in
strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
20)
Once a firm acquires a competitive advantage, they are usually able to sustain
the competitive advantage indefinitely.
Answer: FALSE
Diff:
2 Page Ref: 9
Objective: 1.07 Discuss how a firm may achieve sustained
competitive advantage.
Learning
Outcome: Discuss strategies that
companies use to acquire and maintain competitive advantages
21)
Newspaper companies in the United States provide a good example of how a
company can sustain a competitive advantage over the long-term.
Answer: FALSE
Diff:
3 Page Ref: 8-9
AACSB: Reflective Thinking Skills
Objective: 1.07 Discuss how a firm may achieve sustained
competitive advantage.
Learning
Outcome: Discuss strategies that
companies use to acquire and maintain competitive advantages
22)
Although the Internet has increased in popularity, it has actually led to
increases in company expenses.
Answer: FALSE
Diff:
2 Page Ref: 9
AACSB: Use of Information Technology (IT)
Objective: 1.07 Discuss how a firm may achieve sustained
competitive advantage.
Learning
Outcome: Discuss strategies that
companies use to acquire and maintain competitive advantages
23)
While the number of people shopping online has increased, the average amount
spent online has decreased.
Answer: FALSE
Diff:
2 Page Ref: 8
AACSB: Use of Information Technology (IT)
Objective: 1.07 Discuss how a firm may achieve sustained
competitive advantage.
Learning
Outcome: Discuss strategies that
companies use to acquire and maintain competitive advantages
24)
One of the ways in which the Internet has transferred power from businesses to
individuals is by making comparison-shopping quick and easy.
Answer: TRUE
Diff:
2 Page Ref: 8
AACSB: Use of Information Technology (IT)
Objective: 1.07 Discuss how a firm may achieve sustained
competitive advantage.
Learning
Outcome: Discuss strategies that
companies use to acquire and maintain competitive advantages
25)
Most traditional retailers have tried in vain to use their online sales to
boost in-store sales.
Answer: FALSE
Diff:
1 Page Ref: 8
AACSB: Use of Information Technology (IT)
Objective: 1.07 Discuss how a firm may achieve sustained
competitive advantage.
Learning
Outcome: Discuss strategies that
companies use to acquire and maintain competitive advantages
26)
In order for a firm to achieve sustained competitive advantage, a firm must
continually adapt to changes in external trends and events and effectively
formulate, implement, and evaluate strategies that capitalize upon those
factors.
Answer: TRUE
Diff:
2 Page Ref: 9
Objective: 1.07 Discuss how a firm may achieve sustained
competitive advantage.
Learning
Outcome: Discuss strategies that
companies use to acquire and maintain competitive advantages
27)
Strategists are usually found in higher levels of management and have considerable
authority for decision-making in the firm.
Answer: TRUE
Diff:
1 Page Ref: 9
Objective: 1.03 Define and give examples of key terms in
strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
28)
The middle manager is the most visible and critical strategic manager.
Answer: FALSE
Diff:
2 Page Ref: 9
Objective: 1.03 Define and give examples of key terms in
strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
29)
All strategists have similar attitudes, values, ethics and concerns for social
responsibility.
Answer: FALSE
Diff:
2 Page Ref: 10
Objective: 1.03 Define and give examples of key terms in
strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
30)
A vision statement answers the question, "What is our business?"
whereas a mission statement answers, "What do we want to become?"
Answer: FALSE
Diff:
3 Page Ref: 10
Objective: 1.03 Define and give examples of key terms in
strategic management.
Learning
Outcome: Discuss the functions of vision
statements, mission statements, and long-term corporate objectives
31)
In the last five years, the position of chief strategy officer (CSO) has diminished
in comparison to other top management ranks of many organizations.
Answer: FALSE
Diff:
2 Page Ref: 10
Objective: 1.03 Define and give examples of key terms in
strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
32)
A clear mission statement describes the values and priorities of an
organization.
Answer: TRUE
Diff:
1 Page Ref: 10
Objective: 1.03 Define and give examples of key terms in
strategic management.
Learning
Outcome: Discuss the functions of vision
statements, mission statements, and long-term corporate objectives
33)
Strengths and weaknesses are determined relative to competitors.
Answer: TRUE
Diff:
1 Page Ref: 11
Objective: 1.03 Define and give examples of key terms in
strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
34)
In a multidivisional firm, objectives should be established for the overall
company but not for each division.
Answer: FALSE
Diff:
2 Page Ref: 11
Objective: 1.03 Define and give examples of key terms in
strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
35)
Objectives should be measurable, challenging, reasonable, consistent, and
clear.
Answer: TRUE
Diff:
1 Page Ref: 13
Objective: 1.03 Define and give examples of key terms in
strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
36)
Annual objectives are long-term milestones that organizations must achieve to
reach short-term objectives.
Answer: FALSE
Diff:
2 Page Ref: 11
Objective: 1.03 Define and give examples of key terms in
strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
37)
Annual objectives are especially important in strategy formulation.
Answer: FALSE
Diff:
1 Page Ref: 12
Objective: 1.03 Define and give examples of key terms in
strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
38)
According to research, a healthier workforce can more effectively and
efficiently implement strategies.
Answer: TRUE
Diff:
2 Page Ref: 12
Objective: 1.03 Define and give examples of key terms in
strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
39)
Identifying an organization's existing vision, mission, objectives, and
strategies is the final step for the strategic management process.
Answer: FALSE
Diff:
2 Page Ref: 13
Objective: 1.01 Describe the strategic-management
process.
Learning
Outcome: Define strategic management and
identify its basic concepts
40)
Once an effective strategy is designed, modifications are rarely required.
Answer: FALSE
Diff:
1 Page Ref: 13
AACSB: Reflective Thinking Skills
Objective: 1.01 Describe the strategic-management
process.
Learning
Outcome: Define strategic management and
identify its basic concepts
41)
Application of the strategic-management process is typically more formal in
larger and well-established organizations.
Answer: TRUE
Diff:
2 Page Ref: 14
Objective: 1.01 Describe the strategic-management
process.
Learning
Outcome: Define strategic management and
identify its basic concepts
42)
Followed by commitment, understanding is the most important benefit of
strategic management.
Answer: TRUE
Diff:
2 Page Ref: 15
Objective: 1.05 Describe the benefits of good strategic
management.
Learning
Outcome: Define strategic management and
identify its basic concepts
43)
The best thing strategists can do is develop strategic plans themselves and
then present them to operating managers to execute.
Answer: FALSE
Diff:
3 Page Ref: 15
Objective: 1.05 Describe the benefits of good strategic
management.
Learning
Outcome: Define strategic management and
identify its basic concepts
44)
Firms with planning systems more closely resembling strategic-management theory
generally exhibit superior long-term financial performance relative to their
industry.
Answer: TRUE
Diff:
3 Page Ref: 16
Objective: 1.05 Describe the benefits of good strategic
management.
Learning
Outcome: Define strategic management and
identify its basic concepts
45)
Low-performing firms typically underestimate their competitor's strengths and
overestimate their own firm's strengths.
Answer: TRUE
Diff:
1 Page Ref: 16
Objective: 1.05 Describe the benefits of good strategic
management.
Learning
Outcome: Define strategic management and
identify its basic concepts
46)
According to Greenley, strategic management provides a cooperative, integrated,
and enthusiastic approach to tackling problems and opportunities.
Answer: TRUE
Diff:
2 Page Ref: 16
Objective: 1.05 Describe the benefits of good strategic
management.
Learning
Outcome: Define strategic management and
identify its basic concepts
47)
The poor reward structure is one reason managers do not engage in strategic
planning.
Answer: TRUE
Diff:
1 Page Ref: 16
Objective: 1.05 Describe the benefits of good strategic
management.
Learning
Outcome: Define strategic management and
identify its basic concepts
48)
Crises and firefighting in an organization allow managers the training and time
for effective strategic planning.
Answer: FALSE
Diff:
1 Page Ref: 17
Objective: 1.05 Describe the benefits of good strategic
management.
Learning
Outcome: Define strategic management and
identify its basic concepts
49)
Making many intuitive decisions that conflict with the formal plan is one
pitfall top managers should avoid in strategic planning.
Answer: TRUE
Diff:
2 Page Ref: 17
Objective: 1.05 Describe the benefits of good strategic
management.
Learning
Outcome: Define strategic management and
identify its basic concepts
50)
Managers must be very formal in strategic planning because formality induces
flexibility and creativity.
Answer: FALSE
Diff:
1 Page Ref: 17
Objective: 1.05 Describe the benefits of good strategic
management.
Learning
Outcome: Define strategic management and
identify its basic concepts
51)
Many organizations mistakenly spend more time and effort on the implementation
of a plan, than on the formulation of the plan itself.
Answer: FALSE
Diff:
2 Page Ref: 18
Objective: 1.05 Describe the benefits of good strategic
management.
Learning
Outcome: Define strategic management and
identify its basic concepts
52)
Strategic-management must be a self-reflective learning process that
familiarizes managers and employees in the organization with key strategic
issues and feasible alternatives for resolving those issues.
Answer: TRUE
Diff:
2 Page Ref: 18
Objective: 1.05 Describe the benefits of good strategic
management.
Learning
Outcome: Define strategic management and
identify its basic concepts
53)
The most effective strategic management is ritualistic, predictable and formal.
Answer: FALSE
Diff:
2 Page Ref: 18
Objective: 1.05 Describe the benefits of good strategic
management.
Learning
Outcome: Define strategic management and
identify its basic concepts
54)
For the strategic planning process to be effective, organizations must
continually strengthen the "good ethics is good business" policy.
Answer: TRUE
Diff:
2 Page Ref: 19
AACSB: Ethical Understanding and Reasoning Abilities
Objective: 1.05 Describe the benefits of good strategic
management.
Learning
Outcome: Define strategic management and
identify its basic concepts
55)
Military success is usually the happy result of accidental strategies, but
business success is the product of continuous attention to changing conditions
and insightful adaptations to those conditions.
Answer: FALSE
Diff:
1 Page Ref: 19
Objective: 1.06 Discuss the relevance of Sun Tzu's
"The Art of War" to strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
56)
In most respects, business strategy is very different than military strategy.
Answer: FALSE
Diff:
2 Page Ref: 19
Objective: 1.06 Discuss the relevance of Sun Tzu's
"The Art of War" to strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
57)
The element of surprise provides great competitive advantages in both military
and business strategy.
Answer: TRUE
Diff:
2 Page Ref: 19
Objective: 1.06 Discuss the relevance of Sun Tzu's
"The Art of War" to strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
58)
Both military and business strategy are formulated, implemented, and evaluated
with an assumption of competition.
Answer: FALSE
Diff:
3 Page Ref: 19
Objective: 1.06 Discuss the relevance of Sun Tzu's
"The Art of War" to strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
59)
Superior strategy formulation is well and good, but it cannot overcome an
opponent's superiority in numbers and resources.
Answer: FALSE
Diff:
1 Page Ref: 19
Objective: 1.06 Discuss the relevance of Sun Tzu's
"The Art of War" to strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
60)
All firms have a strategy, even if it is informal, unstructured, and sporadic.
Answer: TRUE
Diff:
2 Page Ref: 21
Objective: 1.01 Describe the strategic-management
process.
Learning
Outcome: Define strategic management and
identify its basic concepts
61)
Firms can be more proactive with strategic management.
Answer: TRUE
Diff:
1 Page Ref: 15
Objective: 1.05 Describe the benefits of good strategic
management.
Learning
Outcome: Define strategic management and
identify its basic concepts
62)
The goal of strategic management is to
A)
achieve competitive advantage.
B)
maintain competitive advantage.
C)
achieve and maintain competitive advantage.
D)
eliminate competitive advantage.
E)
eliminate and abolish competitive advantage.
Answer: C
Diff:
1 Page Ref: 5
Objective: 1.01 Describe the strategic-management
process.
Learning
Outcome: Define strategic management and
identify its basic concepts
63)
Strategic management focuses on integrating management, ________, and
information systems to achieve organizational success.
A)
marketing
B)
finance/accounting
C)
production/operations
D)
research and development
E)
all of the above
Answer: E
Diff:
2 Page Ref: 5
Objective: 1.01 Describe the strategic-management
process.
Learning
Outcome: Define strategic management and
identify its basic concepts
64)
What can be defined as the art and science of formulating, implementing and
evaluating cross-functional decisions that enable an organization to achieve
its objectives?
A)
Strategy formulation
B)
Strategy evaluation
C)
Strategy implementation
D)
Strategic management
E)
Strategic leading
Answer: D
Diff:
1 Page Ref: 5
Objective: 1.01 Describe the strategic-management
process.
Learning
Outcome: Define strategic management and
identify its basic concepts
65)
________ is used to refer to strategic formulation, implementation and
evaluation, with ________ referring only to strategic formulation.
A)
Strategic planning; strategic management
B)
Strategic planning; strategic processing
C)
Strategic management; strategic planning
D)
Strategic management; strategic processing
E)
Strategic implementation; strategic focus
Answer: C
Diff:
2 Page Ref: 5
Objective: 1.01 Describe the strategic-management
process.
Learning
Outcome: Define strategic management and
identify its basic concepts
66)
During what stage of strategic management are a firm's specific internal
strengths and weaknesses determined?
A)
Formulation
B)
Implementation
C)
Evaluation
D)
Feedback
E)
Goal-setting
Answer: A
Diff:
1 Page Ref: 5
Objective: 1.04 Describe the nature of strategy
formulation, implementation, and evaluation activities.
Learning
Outcome: Define strategic management and
identify its basic concepts
67)
An important activity in ________ is taking corrective action.
A)
strategy evaluation
B)
strategy implementation
C)
strategy formulation
D)
strategy leadership
E)
all of the above
Answer: A
Diff:
2 Page Ref: 6
Objective: 1.04 Describe the nature of strategy
formulation, implementation, and evaluation activities.
Learning
Outcome: Define strategic management and
identify its basic concepts
68)
What step in the strategic development process involves mobilizing employees
and managers to put strategies into action?
A)
Strategy formulation
B)
Strategy evaluation
C)
Strategy implementation
D)
Strategic advantage
E)
Competitive advantage
Answer: C
Diff:
2 Page Ref: 6
Objective: 1.04 Describe the nature of strategy
formulation, implementation, and evaluation activities.
Learning
Outcome: Define strategic management and
identify its basic concepts
69)
What types of skills are especially critical for successful strategy
implementation?
A)
Interpersonal
B)
Marketing
C)
Technical
D)
Conceptual
E)
Visionary
Answer: A
Diff:
2 Page Ref: 6
AACSB: Communication Abilities
Objective: 1.04 Describe the nature of strategy
formulation, implementation, and evaluation activities.
Learning
Outcome: Define strategic management and
identify its basic concepts
70)
Which phase of strategic management is called the action phase?
A)
Strategy formulation
B)
Strategy implementation
C)
Strategy evaluation
D)
Allocating resources
E)
Measuring performance
Answer: B
Diff:
1 Page Ref: 6
Objective: 1.04 Describe the nature of strategy
formulation, implementation, and evaluation activities.
Learning
Outcome: Define strategic management and
identify its basic concepts
71)
________ is NOT a strategy-implementation activity.
A)
Taking corrective actions
B)
Establishing annual objectives
C)
Devising policies
D)
Allocating resources
E)
Motivating employees
Answer: A
Diff:
2 Page Ref: 6
Objective: 1.04 Describe the nature of strategy
formulation, implementation, and evaluation activities.
Learning
Outcome: Define strategic management and
identify its basic concepts
72)
Strategy evaluation is necessary because
A)
internal and external factors are constantly changing.
B)
the SEC requires strategy evaluation.
C)
success today is a guarantee of success tomorrow.
D)
the IRS requires strategy evaluation.
E)
firms have limited resources.
Answer: A
Diff:
2 Page Ref: 6
Objective: 1.04 Describe the nature of strategy
formulation, implementation, and evaluation activities.
Learning
Outcome: Define strategic management and
identify its basic concepts
73)
Which statement best describes intuition?
A)
It represents the marginal factor in decision-making.
B)
It represents a minor factor in decision-making integrated with analysis.
C)
It should be coupled with analysis in decision-making.
D)
It is better than analysis in decision-making.
E)
It is management by ignorance.
Answer: C
Diff:
2 Page Ref: 7
AACSB: Reflective Thinking Skills
Objective: 1.02 Explain the need for integrating
analysis and intuition in strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
74)
________ and ________ are external forces transforming business and society
today.
A)
Online social networking; strategy
B)
Online social networking; high energy prices
C)
Strategy; high energy prices
D)
Corporate culture; stakeholders
E)
Stakeholders; strategy
Answer: B
Diff:
2 Page Ref: 8
Objective: 1.01 Describe the strategic-management
process.
Learning
Outcome: Define strategic management and
identify its basic concepts
75)
Anything that a firm does especially well compared to rival firms is referred
to as
A)
competitive advantage.
B)
comparative disadvantage.
C)
opportunity cost.
D)
unsustainable advantage.
E)
an external opportunity.
Answer: A
Diff:
1 Page Ref: 8
Objective: 1.03 Define and give examples of key terms in
strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
76)
At the start of 2011 Myspace's customer base was ________ million, while
Facebook's base at the same time numbered ________ million.
A)
80/100
B)
100/80
C)
80/500
D)
350/500
E)
500/350
Answer: C
Diff:
2 Page Ref: 9
Objective: 1.03 Define and give examples of key terms in
strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
77)
The fact that Apple has no manufacturing facilities of its own
A)
has caused it to build up massive debt on its balance sheet.
B)
has enabled it to remain financially lean with virtually no long-term debt.
C)
has been problematic for Apple in terms of debt.
D)
illustrates that having more fixed assets than rival firms can provide major
competitive advantages in a global recession.
E)
means that it is in the same position as Sony.
Answer: B
Diff:
2 Page Ref: 8
AACSB: Reflective Thinking Skills
Objective: 1.03 Define and give examples of key terms in
strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
78)
________ allows firms to sell products, advertise, purchase supplies, bypass
intermediaries, track inventory, and eliminate paperwork.
A)
Social networking
B)
E-commerce
C)
Blogging
D)
Video sites
E)
None of the above
Answer: B
Diff:
2 Page Ref: 9
Objective: 1.03 Define and give examples of key terms in
strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
79)
The Internet has transferred power from ________ to ________.
A)
businesses, individuals
B)
governments, businesses
C)
individuals, businesses
D)
businesses, governments
E)
individuals, governments
Answer: A
Diff:
1 Page Ref: 8
Objective: 1.03 Define and give examples of key terms in
strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
80)
There is a dramatic shift in mass retailing to
A)
"trading up" and taking customers from more exclusive stores.
B)
selling only the most expensive merchandise.
C)
opening dramatically larger supercenters.
D)
operating stores with less square footage.
E)
cutting back on their online presence.
Answer: D
Diff:
2 Page Ref: 9
Objective: 1.03 Define and give examples of key terms in
strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
81)
The one factor that has most significantly impacted the nature and core of
buying and selling in nearly all industries has been
A)
the Internet.
B)
political borders.
C)
corporate greed.
D)
customer and employee focus.
E)
the government.
Answer: A
Diff:
2 Page Ref: 8
AACSB: Reflective Thinking Skills
Objective: 1.03 Define and give examples of key terms in
strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
82)
Which individuals are most responsible for the success and failure of an
organization?
A)
Strategists
B)
Financial planners
C)
Personnel directors
D)
Stakeholders
E)
Human resource managers
Answer: A
Diff:
1 Page Ref: 9
Objective: 1.03 Define and give examples of key terms in
strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
83)
The first step in strategic planning is generally
A)
developing a vision statement.
B)
establishing goals and objectives.
C)
making a profit.
D)
developing a mission statement.
E)
determining opportunities and threats.
Answer: A
Diff:
1 Page Ref: 10
Objective: 1.03 Define and give examples of key terms in
strategic management.
Learning
Outcome: Discuss the functions of vision
statements, mission statements, and long-term corporate objectives
84)
What are enduring statements of purpose that distinguish one business from
other similar firms?
A)
Policies
B)
Mission statements
C)
Objectives
D)
Rules
E)
Employee conduct guidelines
Answer: B
Diff:
2 Page Ref: 10
Objective: 1.03 Define and give examples of key terms in
strategic management.
Learning
Outcome: Discuss the functions of vision
statements, mission statements, and long-term corporate objectives
85)
An organization's vision statement
A)
is a constant reminder to its employees of why the organization exists.
B)
broadly charts the future direction of an organization.
C)
addresses the basic question: "What is our business?"
D)
answers the question: "What do we want to become?"
E)
none of the above
Answer: D
Diff:
1 Page Ref: 10
Objective: 1.03 Define and give examples of key terms in
strategic management.
Learning
Outcome: Discuss the functions of vision
statements, mission statements, and long-term corporate objectives
86)
Usually, external opportunities and threats are
A)
uncontrollable by a single organization.
B)
controlled by governments.
C)
not as important as internal strengths and weaknesses.
D)
key functions in strategy implementation.
E)
key functions in strategy exploitation.
Answer: A
Diff:
2 Page Ref: 10
Objective: 1.03 Define and give examples of key terms in
strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
87)
Specific results an organization seeks to achieve in pursuing its basic mission
are
A)
strategies.
B)
rules.
C)
objectives.
D)
policies.
E)
tenets.
Answer: C
Diff:
1 Page Ref: 10
Objective: 1.03 Define and give examples of key terms in
strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
88)
Internal ________ are activities in an organization that are performed
especially well.
A)
opportunities
B)
incompetencies
C)
strengths
D)
objectives
E)
factors
Answer: C
Diff:
1 Page Ref: 11
Objective: 1.03 Define and give examples of key terms in
strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
89)
What are the means by which long-term objectives will be achieved?
A)
Strategies
B)
Strengths
C)
Weaknesses
D)
Policies
E)
Opportunities
Answer: A
Diff:
2 Page Ref: 11
Objective: 1.03 Define and give examples of key terms in
strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
90)
Long-term objectives should be all of the following EXCEPT
A)
measurable.
B)
continually changing.
C)
reasonable.
D)
challenging.
E)
consistent.
Answer: B
Diff:
2 Page Ref: 11
Objective: 1.03 Define and give examples of key terms in
strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
91)
Annual objectives are especially important in strategy
A)
reduction.
B)
formulation.
C)
implementation.
D)
evaluation.
E)
policy.
Answer: C
Diff:
1 Page Ref: 12
Objective: 1.03 Define and give examples of key terms in
strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
92)
In which phase of strategic management are long-term objectives especially
important?
A)
Formulation
B)
Control
C)
Evaluation
D)
Implementation
E)
Management
Answer: A
Diff:
2 Page Ref: 12
Objective: 1.03 Define and give examples of key terms in
strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
93)
What are guides to decision making?
A)
Laws
B)
Rules
C)
Policies
D)
Objectives
E)
Goals
Answer: C
Diff:
1 Page Ref: 12
Objective: 1.03 Define and give examples of key terms in
strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
94)
The strategic-management process
A)
occurs once a year.
B)
is a semiannual process.
C)
is a continuous process.
D)
applies mostly to companies with sales greater than $100 million.
E)
applies mostly to small businesses.
Answer: C
Diff:
2 Page Ref: 13
Objective: 1.01 Describe the strategic-management
process.
Learning
Outcome: Define strategic management and
identify its basic concepts
95)
Which of the following is part of the strategic management model?
A)
Measure and evaluate performance
B)
Develop mission and vision statements
C)
Establish long-term objectives
D)
Implement strategies
E)
All of the above
Answer: E
Diff:
2 Page Ref: 14
Objective: 1.01 Describe the strategic-management
process.
Learning
Outcome: Define strategic management and
identify its basic concepts
96)
Strategic management enables an organization to ________, instead of just
responding to threats in its business environment.
A)
be proactive
B)
be immune to threats
C)
avoid responsibility for shaping its future
D)
relinquish control over its destiny
E)
be reactive
Answer: A
Diff:
2 Page Ref: 15
Objective: 1.05 Describe the benefits of good strategic
management.
Learning
Outcome: Define strategic management and
identify its basic concepts
97)
The act of strengthening employees' sense of effectiveness by encouraging and
rewarding them for participating in decision-making and exercising initiative
and imagination is referred to as
A)
authoritarianism.
B)
proaction.
C)
empowerment.
D)
transformation.
E)
delegation.
Answer: C
Diff:
3 Page Ref: 15
Objective: 1.05 Describe the benefits of good strategic
management.
Learning
Outcome: Define strategic management and
identify its basic concepts
98)
How do line managers become "owners" of the strategy?
A)
By attending top manager meetings
B)
By executing plans formulated by other people
C)
By involvement in the strategic-management process
D)
By becoming a shareholder of the firm
E)
By buying off top managers
Answer: C
Diff:
2 Page Ref: 15
Objective: 1.05 Describe the benefits of good strategic
management.
Learning
Outcome: Define strategic management and
identify its basic concepts
99)
Annually, ________ businesses in the U.S. fail.
A)
exactly 100
B)
less than 1,000
C)
about 10,000
D)
more than 100,000
E)
almost 10 million
Answer: D
Diff:
2 Page Ref: 15
Objective: 1.05 Describe the benefits of good strategic
management.
Learning
Outcome: Define strategic management and
identify its basic concepts
100)
According to research, organizations using strategic management are ________
than those that do not.
A)
more profitable
B)
more complex
C)
less profitable
D)
less successful
E)
less complex
Answer: A
Diff:
2 Page Ref: 15
Objective: 1.05 Describe the benefits of good strategic
management.
Learning
Outcome: Define strategic management and
identify its basic concepts
101)
According to Greenley, strategic management offers all of these benefits EXCEPT
A)
it provides an objective view of management problems.
B)
it creates a framework for internal communication among personnel.
C)
it encourages a favorable attitude toward change.
D)
it maximizes the effects of adverse conditions and changes.
E)
it gives a degree of discipline and formality to the management of a business.
Answer: D
Diff:
2 Page Ref: 16
Objective: 1.05 Describe the benefits of good strategic
management.
Learning
Outcome: Define strategic management and
identify its basic concepts
102)
Which of the following is NOT a reason given for poor or no strategic planning
in an organization?
A)
Waste of time
B)
Being content with success
C)
Firefighting
D)
Poor reward structures
E)
Trust of management
Answer: E
Diff:
1 Page Ref: 16-17
Objective: 1.05 Describe the benefits of good strategic
management.
Learning
Outcome: Define strategic management and
identify its basic concepts
103)
All of these are pitfalls an organization should avoid in strategic planning
EXCEPT
A)
using plans as a standard for measuring performance.
B)
using strategic planning to gain control over decisions and resources.
C)
failing to involve key employees in all phases of planning.
D)
too hastily moving from mission development to strategy formulation.
E)
being so formal in planning that flexibility and creativity are stifled.
Answer: A
Diff:
2 Page Ref: 17
Objective: 1.05 Describe the benefits of good strategic
management.
Learning
Outcome: Define strategic management and
identify its basic concepts
104)
Which of the following is NOT a pitfall an organization should avoid in
strategic planning?
A)
Failing to communicate the plan to employees
B)
Involving all managers rather than delegating planning to a "planner"
C)
Top managers not actively supporting the strategic planning process
D)
Doing strategic planning only to satisfy accreditation or regulatory
requirements
E)
Failing to create a collaborative climate supportive of change
Answer: B
Diff:
2 Page Ref: 17
Objective: 1.05 Describe the benefits of good strategic
management.
Learning
Outcome: Define strategic management and
identify its basic concepts
105)
Which of the following statements is NOT true?
A)
Open-mindedness is an important guideline for effective strategic management.
B)
Strategic management must become a self-perpetuating bureaucratic mechanism.
C)
No organization has unlimited resources.
D)
Strategic decisions require trade-offs.
E)
Strategic management must be a self-reflective learning process.
Answer: B
Diff:
1 Page Ref: 18
Objective: 1.05 Describe the benefits of good strategic
management.
Learning
Outcome: Define strategic management and
identify its basic concepts
106)
All of the following are guidelines for effective strategic planning EXCEPT
A)
it should be simple and nonroutine.
B)
it should be a learning process for all managers and employees.
C)
it should be a paper process more than a people process.
D)
it should not disregard qualitative information.
E)
it should not be a formal system for control.
Answer: C
Diff:
2 Page Ref: 19
Objective: 1.05 Describe the benefits of good strategic
management.
Learning
Outcome: Define strategic management and
identify its basic concepts
107)
What is NOT a guideline given for effective strategic planning?
A)
Continually strengthen the "good ethics is good business" policy.
B)
It should not include jargon or arcane planning language.
C)
It should not be too formal, predictable, or rigid.
D)
It should welcome bad news.
E)
It should be controlled by "technicians."
Answer: E
Diff:
2 Page Ref: 19
Objective: 1.05 Describe the benefits of good strategic
management.
Learning
Outcome: Define strategic management and
identify its basic concepts
108)
Which of the following statements is false?
A)
No organization can pursue all the strategies that potentially could benefit
the firm.
B)
Most organizations today recognize that strategic-management concepts and
techniques can enhance the effectiveness of decisions.
C)
A key role of strategists is to facilitate continuous organizational learning
and change.
D)
Effective strategic planning should accept the assumptions underlying the
current corporate strategy.
E)
Even the most technically perfect strategic plan will serve little purpose if
it is not implemented.
Answer: D
Diff:
2 Page Ref: 18
Objective: 1.05 Describe the benefits of good strategic
management.
Learning
Outcome: Define strategic management and
identify its basic concepts
109)
Terms such as objectives, mission, strengths, and weaknesses
were first formulated to address problems
A)
on the battlefield.
B)
in the boardroom.
C)
on the trading floor.
D)
in the military hierarchy.
E)
in interpersonal relationships.
Answer: A
Diff:
2 Page Ref: 21
Objective: 1.06 Discuss the relevance of Sun Tzu's
"The Art of War" to strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
110)
According to Webster's New World Dictionary, ________ is "the
science of planning and directing large-scale military operations, of
maneuvering forces into the most advantageous position prior to actual
engagement with the enemy."
A)
competitive advantage
B)
war
C)
strategy
D)
formulation
E)
business
Answer: C
Diff:
1 Page Ref: 19
Objective: 1.06 Discuss the relevance of Sun Tzu's
"The Art of War" to strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
111)
Business or military success is
A)
generally the happy result of accidental strategies.
B)
undermined by the element of surprise.
C)
the product of both attention to changing external and internal conditions and
the insightful adaptations to those conditions.
D)
unrelated to external conditions.
E)
none of the above.
Answer: C
Diff:
2 Page Ref: 19
Objective: 1.06 Discuss the relevance of Sun Tzu's
"The Art of War" to strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
112)
Superior strategy formulation and implementation ________ an opponent's
superiority in numbers and resources.
A)
are irrelevant to
B)
are not enough to surmount
C)
can overcome
D)
can lead to
E)
unite
Answer: C
Diff:
1 Page Ref: 19
Objective: 1.06 Discuss the relevance of Sun Tzu's
"The Art of War" to strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
113)
A strong ________ heritage underlies the study of strategic management.
A)
military
B)
government
C)
political
D)
social
E)
cultural
Answer: A
Diff:
1 Page Ref: 19
Objective: 1.06 Discuss the relevance of Sun Tzu's
"The Art of War" to strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
114)
Military strategy is based on an assumption of ________, whereas business
strategy is based on an assumption of ________.
A)
conflict; cooperation
B)
conflict; competition
C)
cooperation; conflict
D)
competition; conflict
E)
cooperation; competition
Answer: B
Diff:
2 Page Ref: 19
Objective: 1.06 Discuss the relevance of Sun Tzu's
"The Art of War" to strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
115)
Both business and military organizations must ________ and ________ to be
successful.
A)
be impervious to change; continually improve
B)
adapt to change; continually improve
C)
shun change; stay the course
D)
be impervious to change; stay the course
E)
none of the above
Answer: B
Diff:
1 Page Ref: 19
Objective: 1.06 Discuss the relevance of Sun Tzu's
"The Art of War" to strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
116)
The strategic-management process is becoming more widely used by
A)
small firms.
B)
nonprofit institutions.
C)
governmental organizations.
D)
multinational conglomerates.
E)
all of the above
Answer: E
Diff:
2 Page Ref: 21
Objective: 1.01 Describe the strategic-management
process.
Learning
Outcome: Define strategic management and
identify its basic concepts
117)
Organizations should take a(n) ________ approach in their industry.
A)
adversarial rather than a collegial
B)
collegial rather than an adversarial
C)
reactive rather than a proactive
D)
proactive rather than a reactive
E)
cooperative rather than a competitive
Answer: D
Diff:
2 Page Ref: 21
Objective: 1.01 Describe the strategic-management
process.
Learning
Outcome: Define strategic management and
identify its basic concepts
118)
The strategic-management process represents a(n) ________, ________, and
________ approach for determining an enterprise's future direction.
A)
logical; systematic; subjective
B)
intuitive; disorganized; subjective
C)
logical; systematic; objective
D)
intuitive; disorganized; objective
E)
inconsistent; systematic; subjective
Answer: C
Diff:
2 Page Ref: 21
Objective: 1.01 Describe the strategic-management
process.
Learning
Outcome: Define strategic management and
identify its basic concepts
119)
Compare and contrast strategic planning with strategic management.
Answer: Strategic planning is more often used in the
business world, whereas strategic management is often used in academia.
Sometimes, strategic management is used to refer to strategy formulation,
implementation and evaluation, with strategic planning referring only to
strategy formulation. The purpose of strategic management is to exploit and
create new and different opportunities for tomorrow; long-range planning, in
contrast, tries to optimize for tomorrow the trends of today.
Diff:
1 Page Ref: 5
Objective: 1.01 Describe the strategic-management
process.
Learning
Outcome: Define strategic management and
identify its basic concepts
120)
Which stage in the strategic-management process is most difficult? Explain why.
Answer: Strategy implementation is the most difficult
stage in the strategic-management process because it requires personal
discipline, commitment and sacrifice. Successful strategy implementation hinges
upon managers' ability to motivate employees, which is more of an art than a
science.
Diff:
2 Page Ref: 6
Objective: 1.04 Describe the nature of strategy
formulation, implementation, and evaluation activities.
Learning
Outcome: Define strategic management and
identify its basic concepts
121)
Explain the relationship between strategic management and competitive advantage
for firms. How can a firm achieve sustained competitive advantage?
Answer: Strategic management is all about gaining and
maintaining competitive advantage. Competitive advantage is anything a firm
does especially well compared to rival firms. When a firm can do something that
rival firms cannot do, or owns something that rival firms desire, that can represent
a competitive advantage. Getting and keeping competitive advantage is essential
for long-term success of an organization. A firm must strive to achieve
sustained competitive advantage by 1) continually adapting to changes in
external trends and events and internal capabilities, competencies and
resources, and by 2) effectively formulating, implementing and evaluating
strategies that capitalize upon those factors.
Diff:
2 Page Ref: 8-9
Objective: 1.07 Discuss how a firm may achieve sustained
competitive advantage.
Learning
Outcome: Discuss strategies that
companies use to acquire and maintain competitive advantages
122)
Define what strategists are. Describe what they do in an organization.
Answer: Strategists are individuals who are most
responsible for the success or failure of an organization. They help an
organization gather, analyze and organize information. They track industry and
competitive trends, develop forecasting models and scenario analyses, identify
business threats and develop creative action plans. Strategic planners usually
serve in a support or staff role. Usually found in higher levels of management,
they typically have considerable authority for decision making in the firm.
Diff:
2 Page Ref: 9
Objective: 1.03 Define and give examples of key terms in
strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
123)
Define and discuss the differences between vision and mission statements.
Answer: Many organizations today develop a vision
statement that answers the question "What do we want to become?"
Developing a vision statement is often considered the first step in strategic
planning, preceding even development of a mission statement. Many vision
statements are a single sentence. For example, the vision statement of Stokes
Eye Clinic in Florence, South Carolina, is "Our vision is to take care of
your vision." Mission statements are "enduring statements of
purpose that distinguish one business from other similar firms. A mission
statement identifies the scope of a firm's operations in product and market
terms." It addresses the basic question that faces all strategists:
"What is our business?" A clear mission statement describes the
values and priorities of an organization. Developing a mission statement
compels strategists to think about the nature and scope of present operations
and to assess the potential attractiveness of future markets and activities. A
mission statement broadly charts the future direction of an organization.
Diff:
2 Page Ref: 10
Objective: 1.03 Define and give examples of key terms in
strategic management.
Learning
Outcome: Discuss the functions of vision
statements, mission statements, and long-term corporate objectives
124)
Discuss some forces that influence the formality of strategic-management
systems.
Answer: Application of the strategic-management
process is typically more formal in larger and well-established organizations.
Formality refers to the extent that participants, responsibilities, authority,
duties, and approach are specified. Smaller businesses tend to be less formal.
Firms that compete in complex, rapidly changing environments, such as
technology companies, tend to be more formal in strategic planning. Firms that
have many divisions, products, markets and technologies also tend to be more
formal in applying strategic-management concepts. Greater formality in applying
the strategic-management process is usually positively related with the cost,
comprehensiveness, accuracy and success of planning across all types and sizes
of organizations.
Diff:
2 Page Ref: 14
Objective: 1.01 Describe the strategic-management
process.
Learning
Outcome: Define strategic management and
identify its basic concepts
125)
List 10 major benefits of strategic management, as stated by Greenley.
Answer: There are 14 benefits stated by Greenley.
Students are to list any 10 of the following: 1) it allows for identification,
prioritization and exploitation of opportunities; 2) it provides an objective
view of management problems; 3) it represents a framework for improved
coordination and control of activities; 4) it minimizes the effects of adverse
conditions and changes; 5) it allows major decisions to better support
established objectives; 6) it allows more effective allocation of time and
resources to identified opportunities; 7) it allows fewer resources and less
time to be devoted to correcting erroneous or ad hoc decisions; 8) it creates a
framework for internal communication among personnel; 9) it helps integrate the
behavior of individuals into a total effort; 10) it provides a basis for
clarifying individual responsibilities; 11) it encourages forward thinking; 12)
it provides a cooperative, integrated and enthusiastic approach to tackling
problems and opportunities; 13) it encourages a favorable attitude toward
change; and 14) it gives a degree of discipline and formality to the management
of a business.
Diff:
2 Page Ref: 16
Objective: 1.05 Describe the benefits of good strategic
management.
Learning
Outcome: Define strategic management and
identify its basic concepts
126)
Give at least seven reasons why some firms do no strategic planning.
Answer: Some reasons for poor or no strategic
planning are as follows: lack of knowledge or experience in strategic planning,
poor reward structures, firefighting, waste of time, too expensive, laziness,
content with success, fear of failure, overconfidence, prior bad experience,
self-interest, fear of the unknown, honest difference of opinion, and
suspicion.
Diff:
2 Page Ref: 16-17
Objective: 1.05 Describe the benefits of good strategic
management.
Learning
Outcome: Define strategic management and
identify its basic concepts
127)
What are the pitfalls in strategic planning that management in an organization
should watch out for or avoid? Identify any five pitfalls.
Answer: There are 13 pitfalls. Students should list
any five of the following: 1) using strategic planning to gain control over
decisions and resources; 2) doing strategic planning only to satisfy accreditation
or regulatory requirements; 3) too hastily moving from mission development to
strategy formulation; 4) failing to communicate the plan to employees, who
continue to work in the dark; 5) top managers making many intuitive decisions
that conflict with the formal plan; 6) top managers not actively supporting the
strategic-planning process; 7) failing to use plans as a standard for measuring
performance; 8) delegating planning to a "planner" rather than
involving all managers; 9) failing to involve key employees in all phases of
planning; 10) failing to create a collaborative climate supportive of change;
11) viewing planning to be unnecessary or unimportant; 12) becoming so
engrossed in current problems that insufficient or no planning is done; and 13)
being so formal in planning that flexibility and creativity are stifled.
Diff:
2 Page Ref: 17
Objective: 1.05 Describe the benefits of good strategic
management.
Learning
Outcome: Define strategic management and
identify its basic concepts
128)
Discuss the importance of the implementation phase of strategic management.
Answer: Even the most technically perfect strategic
plan will serve little purpose if it is not implemented. Many organizations
tend to spend an inordinate amount of time, money, and effort on developing the
strategic plan, treating the means and circumstances under which it will be
implemented as an afterthought! Change comes through implementation and
evaluation, not through the plan. A technically imperfect plan that is
implemented well will achieve more than the perfect plan that never gets off
the ground.
Diff:
2 Page Ref: 18
Objective: 1.04 Describe the nature of strategy
formulation, implementation, and evaluation activities.
Learning
Outcome: Define strategic management and
identify its basic concepts
129)
Discuss the value of integrating intuition and analysis.
Answer: Most organizations can benefit from strategic
management, which is based upon integrating intuition and analysis in decision
making. Choosing an intuitive or analytic approach to decision making is not an
either-or-proposition. Managers at all levels in an organization inject their
intuition and judgment into strategic-management analyses. Analytical thinking
and intuitive thinking complement each other. Operating from the
"I've-already-made-up-my-mind-don't-bother-me-with-the-facts" mode is
not management by intuition; it is management by ignorance. Drucker says,
"I believe in intuition only if you discipline it. 'Hunch' artists, who
make a diagnosis but don't check it out with facts, are the ones in medicine
who kill people, and in management kill businesses." In a sense, the
strategic-management process is an attempt both to duplicate what goes on in
the mind of a brilliant, intuitive person who knows the business, and to couple
it with analysis.
Diff:
2 Page Ref: 7
Objective: 1.02 Explain the need for integrating
analysis and intuition in strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
130)
Compare and contrast business and military strategy.
Answer: Business and military strategy are very
similar. A key aim of both business and military strategy is "to gain
competitive advantage." They both also try to use their own strengths to
exploit competitor's weaknesses. Success is not the happy result of accidental
strategies in either business or military organizations. The element of
surprise provides great competitive advantages in both military and business
strategy. Information systems that provide data on opponents' or competitors'
strategies and resources are also vitally important. Finally, both business and
military organizations must adapt to change and constantly improve to be
successful.
While
business and military strategy are the same in many ways, they have one major
difference–business strategy is formulated, implemented and evaluated with an
assumption of competition, whereas military strategy is based on an assumption
of conflict.
Diff:
2 Page Ref: 19
Objective: 1.06 Discuss the relevance of Sun Tzu's
"The Art of War" to strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
131)
What are some external opportunities and threats that face many firms?
Answer: Some of the opportunities and threats are:
availability of capital can no longer be taken for granted; consumers expect
green operations and products; marketing is moving rapidly to the Internet;
global markets offer the highest growth in revenues; commodity food prices are
increasing; political unrest in the Middle East is raising oil prices; computer
hacker problems are increasing; intense price competition is plaguing most
firms; unemployment and underemployment rates remain high; interest rates are
rising; product life cycles are becoming shorter; state and local governments
are financially weak; turmoil and violence in Mexico is increasing; winters are
colder and summers hotter than usual; home prices remain exceptionally low.
Diff:
2 Page Ref: 10
Objective: 1.03 Define and give examples of key terms in
strategic management.
Learning
Outcome: Define strategic management and
identify its basic concepts
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