Ch. 1 Learning Review Questions

Question 1

State four reasons why strategic management is important.

Answer 1

1. to so your job well and have your work valued and rewarded accordingly
2. it impacts organizational performance (ROA, profit)
3. organizations face continual internal and external changes
4. the organization’s divisions, departments and activities need to be coordinated and focused on achieving the overall goal

Question 2

Describe what studies have shown about the relationship between strategic
management and an organization’s performance.

Answer 2

• Organizations who use strategic management have better performance that reflects back in the bottom line (increased profit).
• It also leads to more effective decision-making when using analytical approaches to develop appropriate strategies.
• Using a systemic approach allows to cope better with uncertainty

Question 3

Define strategy and strategic management.

Answer 3

Strategy = goal-directed plans and actions that align capabilities and resources with threats and opportunities in the environment.

Strategic management = the process of analyzing the environment and developing appropriate strategies, implementing them, evaluate and adjusting them where appropriate.

Question 4

Describe the strategic management process.

Answer 4

• situation analysis
• strategy formulation
• strategy implementation
• strategy evaluation

Question 5

Describe the three types of organizational strategies.

Answer 5

1. Corporate strategy
2. Business/competitive strategy
3. Functional/operational strategy

Question 6

Explain the historical evolution of strategic management.

Answer 6

Strategy has military roots, however, as a field of study it has its foundation in economics and organization studies.

Question 7

Explain the role of the board of directors in strategic management.

Answer 7

The board of directors represent the shareholders interest. Main role is to select CEO and oversee a company’s management.

• review and approve strategic goals/plans
• review and approve company policies and financial standards
• ensure integrity of financial controls and reporting system
• approve organizational philosophy
• monitor organizational performance
• select, evaluate and compensate top managers
• develop management succession plans

Question 8

Discuss how top managers can be effective strategic leaders. (6 dimensions)

Answer 8

1. develop vision and mission
2. exploiting and maintaining core competencies
3. developing human capital
4. create & sustain strong culture
5. ethical decisions and practices
6. establish appropriate and balanced controls

Question 9

Describe the role of other managers and organizational employees in strategy.

Answer 9

They are responsible for strategy implementation.