chapter 1 Flashcards
What is the primary focus of strategy in a business context? A) To replicate competitors’ activities
B) To create a unique and valuable position
C) To minimize costs at all costs
D) To maximize market share without differentiation
b
How is strategy best described? A) A set of identical activities as competitors
B) A random collection of business decisions
C) The creation of a different set of activities
D) An approach focused solely on cost reduction
c
Why is being different important in strategy? A) It leads to increased competition
B) It helps firms avoid being compared to others
C) It allows firms to meet customer needs in a unique way
D) It ensures that all firms perform similarly
c
Which of the following statements best captures the essence of strategy? A) Strategy is about following industry norms
B) Strategy is about being different and creating value
C) Strategy is primarily concerned with financial metrics
D) Strategy is a temporary plan that changes frequently
b
What is necessary for achieving a sustainable competitive advantage? A) Replicating competitors’ strategies
B) Performing different activities or similar activities differently
C) Minimizing operational costs only
D) Focusing solely on customer service
b
How does the fit of a system of activities impact replication difficulty? A) High fit makes replication easier
B) High fit makes replication more difficult
C) Fit has no impact on replication
D) Low fit leads to better competition
b
Why are systems of activities more difficult to replicate than individual parts? A) They are less comprehensive
B) They involve interconnected processes that create unique value
C) They focus on one specific activity
D) They are easily documented
B
How does the fit of a system of activities impact replication difficulty? A) High fit makes replication easier
B) High fit increases the complexity and uniqueness, making replication more difficult
C) Fit has no impact on replication
D) Low fit leads to better competitive practices
b
What is a key requirement of strategy in a competitive environment? A) To avoid making any choices
B) To make trade-offs and choose what not to do
C) To focus solely on market share
D) To replicate competitors’ strategies
b
What does it mean to create “fit” among a company’s activities? A) Ensuring all activities are identical
B) Aligning activities so that they reinforce one another and contribute to overall strategy
C) Minimizing the number of activities a company engages in
D) Standardizing activities across the industry
b
What does operational effectiveness primarily focus on? A) Creating unique products
B) Improving productivity, quality, and speed
C) Developing long-term strategies
D) Expanding into new markets
b
Which of the following is a key outcome of operational effectiveness? A) Higher average unit prices
B) Greater efficiency and lower average unit costs
C) Unique competitive positioning
D) Enhanced customer loyalty
b
What is a fundamental difference between operational effectiveness and strategic positioning? A) Operational effectiveness focuses on cost, while strategy focuses on innovation
B) Operational effectiveness involves performing similar activities better, while strategy involves performing different activities or the same activities differently
C) There is no significant difference
D) Operational effectiveness is concerned only with short-term gains
b
Why is sustainable competitive advantage not achievable through operational effectiveness alone? A) It requires a focus on financial metrics
B) Operational effectiveness can be easily imitated by competitors
C) It relies on random chance
D) Operational effectiveness is less important than strategy
b
What is one of the limitations of operational effectiveness mentioned in the text? A) It guarantees long-term profitability
B) It leads to unique market positioning
C) Management innovations can be rapidly imitated
D) It eliminates the need for strategy
c
What does “generic solutions” refer to in the context of operational effectiveness? A) Unique practices tailored to specific companies
B) Widely applicable solutions that can be implemented across many contexts
C) Innovative strategies that enhance competitive advantage
D) Cost-cutting measures that are rarely adopted
b
What is essential for companies to achieve sustainable profitability according to the text? A) Focusing solely on operational improvements
B) Maintaining a unique position in the market
C) Imitating competitors’ strategies
D) Reducing prices across the board
b
What is one potential risk of relying solely on operational improvements? A) Enhanced product differentiation
B) Destructive competition within the industry
C) Increased customer loyalty
D) Greater market share
b
Which of the following statements best summarizes the relationship between operational improvements and strategy? A) Operational improvements guarantee success without a strategy
B) Strategy is secondary to operational effectiveness
C) Both operational improvements and a strong strategy are essential for long-term success
D) A strong strategy eliminates the need for operational improvements
c
What is the primary focus of strategic management in an organization? A) Maximizing departmental efficiency
B) Achieving overall organizational goals and objectives
C) Focusing solely on employee satisfaction
D) Prioritizing individual department needs
b
What does the organizational versus individual rationality perspective suggest? A) All departments should pursue their own objectives regardless of the overall strategy
B) Objectives beneficial for one functional area may not be beneficial for the entire organization
C) Individual department goals are always aligned with organizational goals
D) Departments should operate independently without collaboration
b
in strategic management, decisions should ideally benefit: A) Only the top executives
B) The organization as a whole, not just specific departments
C) The marketing department exclusively
D) Individual employees
b
What is an example of a potential conflict in organizational objectives? A) All departments aiming for cost reduction
B) Operations aiming to reduce costs through standardization while marketing needs variety
C) Finance and operations working together on budget plans
D) Human resources promoting employee development initiatives
b
Why is it important for strategic management to consider the overall organization rather than just individual departments? A) To ensure all departments are equally prioritized
B) To prevent conflicts and align all efforts toward common goals
C) To encourage competition among departments
D) To limit the scope of decision-making
b
What should strategic management aim to achieve when making decisions? A) Short-term departmental success
B) Long-term organizational viability and success
C) Individual employee growth
D) Immediate cost reductions across all departments
b
Who are considered stakeholders in an organization? A) Only shareholders and employees
B) Shareholders, employees, customers, suppliers, and the broader community
C) Only customers and suppliers
D) Only top executives
b
What is a potential consequence of prioritizing profits for one stakeholder group, such as shareholders? A) Increased loyalty from customers
B) Enhanced employee morale
C) Alienation of other stakeholders like employees or customers
D) Improved overall company performance
c
What is essential for managers in strategic management regarding organizational needs? A) Focus solely on short-term profits
B) Address both current needs and long-term vision
C) Prioritize long-term investments only
D) Ignore financial pressures from markets
b
Why is it important to consider both short-term and long-term perspectives in strategy development? A) To create conflict among management
B) The creative tension between the two leads to more successful strategies
C) Short-term focus is always more beneficial
D) Long-term investments are not necessary
b
What must managers balance in effective strategic management? A) Cost reduction and revenue generation
B) Effectiveness (doing the right things) and efficiency (doing things right)
C) Employee satisfaction and customer loyalty
D) Short-term goals and long-term goals
b
Why is recognizing trade-offs important in strategic management? A) It eliminates the need for strategic planning
B) It helps managers decide between conflicting objectives based on the competitive environment
C) It allows for a singular focus on operational details
D) It simplifies the decision-making process
b
Ambidexterity refers to a manager’s challenge to align resources, without having to take advantage of
existing product markets or to proactively explore new opportunities.
F. Ambidexterity is the challenge managers face in both aligning resources to take advantage of existing
product markets and proactively exploring new opportunities.
Focusing on the short term and efficiency is always a bad management principle
F. Successful managers must make many trade-offs. It is central to the practice of strategic management. At
times, managers must focus on the short term and efficiency
Shareholders expect only short-term value and therefore good managers should only focus on meeting
short-term performance targets.
F. Strategic management requires incorporating both short-term and long-term
perspectives.
According to Peter Senge, a leading strategic management author, creative tension results from the need
to incorporate both short-term and long-term perspectives in strategic management.
T
Focusing on a single stakeholder is a good strategic principle for managers to follow
F
Strategic management is only concerned with short-term perspectives.
F
Only shareholders in a publicly held company are stakeholders because they are the only group that has
a stake in the success of the organization.
F.
Making trade-off decisions between effectiveness and efficiency is central to the practice of strategic
management
T
Ambidextrous behaviors in individuals illustrate how a dual capacity for _______ can be woven into the
fabric of an organization at the individual level.
A. alignment and adaptability
B. alignment and transparency
C. alignment and internal linkages
D. alignment and efficiency
D
Strategic management involves the recognition of trade-offs between effectiveness and
A. cost.
B. value.
C. return on investment.
D. efficiency
D
. In strategic management, both the short-term and long-term perspectives need to be considered because
A. shareholder value is only measured by short-term returns.
B. shareholders only care about long-term returns.
C. long-term vision precludes the analysis of present operating needs.
D. the creative tension between the two forces managers to develop more successful strategy
D
In choosing to focus on stakeholders, which of the following will not lead to success for a manager?
A. shareholders and employees
B. employees and suppliers
C. customers and the community at large
D. customers only
D
Effectiveness is often defined as
A. doing things right.
B. stakeholder satisfaction.
C. doing the right thing.
D. productivity enhancement.
C
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.
D. The key attributes of strategic management are that it directs the organization toward overall goals and
objectives, includes multiple stakeholders in decision making, needs to incorporate short-term and longterm perspectives, and recognizes trade-offs between efficiency and effectiveness.
The four key attributes of strategic management include the idea that strategy must
A. be directed toward overall organizational goals and objectives.
B. be focused only on long-term objectives.
C. be focused on only one specific area of an organization.
D. focus only on competitor strengths.
A
The organizational versus the individual rationality perspective suggests that objectives that are
A. good for a functional area are always good for the overall organization.
B. good for the overall organization are always best for a functional area.
C. best for a functional area may not be best for the overall organization.
D. best for one functional area will never be best for all functional areas.
C
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.
D
According to the text, the strategic management process entails three ongoing processes. They are
A. analyses, actions, and synthesis.
B. analyses, decisions, and actions.
C. analyses, evaluation, and critique.
D. analyses, synthesis, and decisions.
B
Melvin Alexander, executive director of Principled Solutions Enterprise, a management consulting firm
specializing in health care, suggests that environmental changes oblige firms to make strategic changes in
order to survive. Which of the following is one of the strategic changes he foresees will occur in the next
three to five years?
A. changes in the behavior of the health care consumers
B. reduction in the number of available medical doctors
C. increases in the number of locations of health care facilities
D. decreases in information technology investment
a
According to the external control view of leadership, which of the following factors would not be
considered an external factor that might positively or negatively affect a firm’s success?
A. economic downturns
B. governmental legislation
C. outbreak of war
D. company employee morale
D. In the external control view of leadership, external factors are responsible for positively or negatively
affecting company success. These external factors often are unanticipated and are not due to the
company’s leadership.
What are the three main components of the strategic management process?
A) Strategy formulation, strategy implementation, strategy evaluation
B) Strategy analysis, strategy formulation, strategy implementation
C) Market research, strategy formulation, financial planning
D) Resource allocation, strategy analysis, performance measurement
b
How do the components of the strategic management process relate to one another?
A) They are independent and occur in a sequential manner.
B) They are interdependent and typically occur in a non-sequential manner.
C) They follow a strict order and do not overlap.
D) They are optional and can be disregarded.
B
In the Mintzberg model, organizational decisions determined only by analysis are intended strategy.
t
What does “intended strategy” refer to?
A) The actual strategy that emerges after implementation
B) The initial plan created after analysis
C) Strategies developed in response to unexpected changes
D) Strategies that are never executed
b
Why does the intended strategy rarely survive in its original form?
A) It is too rigid to adapt to changes.
B) It is often abandoned before implementation.
C) Unforeseen circumstances can alter its execution.
D) It is not based on analysis.
c
What is “realized strategy”?
A) The initial plan created after analysis
B) The strategy that is intended but not implemented
C) The actual strategy that emerges after implementation
D) A theoretical concept without practical application
c
According to Henry Mintzberg, a management scholar, most firms realize their original intended
strategy.
f. → most firms do not realize their original intended strategy ( because of various reasons). Good managers will want to take advantage of a new opportunity presented by the environment, even if it was not part of the original set of intentions.
What leads to the development of “emergent strategies”?
A) Strict adherence to the intended strategy
B) Unexpected changes in the business environment
C) A lack of strategic planning
D) An emphasis on long-term goals
b
What primarily determines the intended strategy?
A) Organizational culture
B) Market trends
C) Analysis
D) Leadership styles
c
What does the final realized strategy of a firm combine?
A) Only intended strategies
B) Only emergent strategies
C) Both deliberate (intended) strategies and emergent strategies
D) Market-driven strategies and random adjustments
C
What are deliberate strategies often referred to as?
A) Realized strategies
B) Intended strategies
C) Emergent strategies
D) Tactical strategies
b
The final realized strategy of a firm is a combination of deliberate and emergent strategies.
t
What is the primary role of strategy analysis in the strategic management process?
A) To evaluate the effectiveness of implemented strategies
B) To serve as the starting point for formulating and implementing strategies
C) To allocate resources among different departments
D) To assess market trends
a
What does strategy analysis involve matching?
A) Resources with organizational culture
B) Vision, mission, and objectives with internal and external environmental factors
C) Financial performance with industry benchmarks
D) Employee skills with job requirements
b
What can result from a failure to conduct thorough strategy analysis?
A) Increased employee satisfaction
B) Effective strategies and smooth implementation
C) Ineffective strategies and poor implementation
D) Enhanced market competitiveness
C
Strategy analysis is the study of the external environments of the firm
F. Strategy analysis is study of the external and internal environments of a firm, and their fit with
organizational vision and goals.
Both the internal and external environments of a firm must be analyzed as well as the goals of the firm
before managers can formulate and implement appropriate strategies.
T
Strategy analysis is the starting point of the strategic management process and consists of the
A. analysis only of the vision, mission, and objectives of the firm.
B. analysis of the relevant internal and external environmental factors only.
C. analysis of relevant competitors only.
D. matching of vision, mission, and objectives with the relevant internal and external environmental
factors.
D
__________ 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
C
What forms a goal hierarchy that guides strategic decisions in a company?
A) Financial forecasts and market analysis
B) Vision, mission, and strategic objectives
C) Operational efficiency metrics
D) Employee performance reviews
B
How do goals help a firm in its strategic management?
A) They focus solely on short-term profits.
B) They define competitive advantage and align actions for long-term success.
C) They dictate daily operational tasks.
D) They are only relevant for external communication.
b
What must managers continuously do regarding external factors?
A) Analyze only internal issues
B) Monitor and analyze external factors affecting the firm
C) Rely on past strategies without assessment
D) Conduct infrequent reviews
b
Which framework includes factors like demographics and economic trends?
A) Competitive Environment
B) General Environment
C) Internal Environment
D) Market Environment
b
What does the industry environment primarily focus on?
A) Internal organizational culture
B) External economic conditions
C) The competitive landscape, including competitors and suppliers
D) Employee satisfaction metrics
c
Why is assessing the internal environment important for firms?
A) To identify potential sources of competitive advantage
B) To reduce operational costs
C) To assess customer satisfaction
D) To analyze external competition
a
Which activities are typically assessed in a firm’s value chain?
A) Only financial analysis
B) Operations, marketing, and human resources
C) External market trends
D) Regulatory compliance
b
What role do intellectual assets play in a firm’s strategy?
A) They are irrelevant to competitive advantage.
B) They contribute to creating and sustaining competitive advantages.
C) They are solely based on physical resources.
D) They focus only on financial investments.
b
How can firms strengthen their intellectual assets?
A) By limiting technology use and collaboration
B) By developing networks and fostering collaboration
C) By focusing exclusively on physical resources
D) By minimizing employee training
b
Why is strategy formulation considered crucial for a firm?
A) It ensures that all employees are satisfied.
B) It determines how a business competes, grows, and creates value.
C) It focuses solely on operational performance.
D) It is the last step in the strategic management process.
b
What does Fred Smith, CEO of FedEx, suggest about operational performance?
A) It is the most important aspect of business success.
B) It is meaningless if the firm pursues a poor strategy.
C) It should be prioritized over strategy formulation.
D) It can be achieved without a clear strategy.
b
At what levels is strategy formulation developed?
A) Only at the executive level
B) At several levels within the organization
C) Only during financial planning
D) Primarily through market analysis
b
What aspects does strategy formulation address for firms?
A) Daily operational tasks
B) Investments, commitments, and operations that create competitive advantage
C) Employee training and development programs
D) Customer satisfaction surveys
b
