Chapter 01 - Strategic Management: Creating Competitive Advantages

Chapter 01 - Strategic Management: Creating Competitive Advantages
Chapter 01 Strategic Management: Creating Competitive Advantages

True / False Questions
1. Nortel, like other firms, suffered from a drop in overall industr demand for telecommunications e!uipment during "000 and "001. According to the te#t, this $ould %e an e#ample of the &romantic& perspective of leadership. 'rue (alse
". Strategic management consists of the anal sis, decisions, and actions an organi)ation undertakes in order to create and sustain competitive advantages. 'rue (alse
*. Strategic management includes strateg anal sis, strateg formulation, and strateg implementation. 'rue (alse
+. Management innovations such as total !ualit , %enchmarking, and %usiness process reengineering often lead to sustaina%le competitive advantage. 'rue (alse
,. Strategic management recogni)es the trade-offs %et$een effectiveness and efficienc . 'rue (alse
-. 'he %est firms al$a s reali)e their intended strateg . 'rue (alse
1-1
.. According to the te#t, formulating strateg includes taking into consideration strateg at the %usiness, international, and corporate levels. /n addition managers must formulate effective entrepreneurial initiatives. 'rue (alse
0. 1usiness-level strateg focuses on t$o issues, 213 $hat %usinesses to compete in, and 2"3 ho$ %usinesses can %e managed to achieve s nerg . 'rue (alse
4. Corporate-level strateg addresses ho$ firms compete and outperform their rivals as $ell as achieve and sustain competitive advantages. 'rue (alse
10. 5ffective leadership can pla a large role in fostering corporate entrepreneurship. Corporate entrepreneurship can have a ver positive impact on a firm6s %ottom line. 'rue (alse
11. 'he three primar participants in corporate governance are: 213 the shareholders7 2"3 management 2led % the chief e#ecutive officer37 and, 2*3 emplo ees. 'rue (alse
1". 8ecisions % 1oards of 8irectors are al$a s consistent $ith shareholder interests. 'rue (alse
1*. (ormer Chr sler vice chairman 9o%ert :ut) stated: &;e are here to serve the shareholder and create shareholder value. / insist that the onl person $ho o$ns the compan is the person $ho paid good mone for it.& 'his is an e#ample of a s m%iotic approach to stakeholder management. 'rue (alse
1-"
1+. Stockholders in a compan are the onl individuals $ith an interest in the financial performance in the compan . 'rue (alse
1,. Stockholders, emplo ees, and the communit -at-large are among a firm6s stakeholders. 'rue (alse
1-. S m%iosis is the a%ilit to recogni)e interdependencies among the interests of multiple stakeholders $ithin and outside an organi)ation. 'rue (alse
1.. <ne of the %enefits of cro$dsourcing is that stakeholders are restricted to one narro$ role. 'rue (alse
10. Social responsi%ilit is the idea that organi)ations are not onl accounta%le to stockholders %ut also to the communit -at-large. 'rue (alse
14. Shell, N5C, and =roctor > ?am%le have %een measuring their performance according to $hat has %een called a &triple %ottom line.& 'his techni!ue involves an assessment of financial, social, and environmental performance. 'rue (alse
"0. 'he strategic management process should %e addressed onl % top-level e#ecutives. Midlevel and lo$-level emplo ees are %est e!uipped to implement the organi)ation6s strategies. 'rue (alse
1-*
"1. <rgani)ational vision statements are the %eginning point for the hierarch of goals throughout the organi)ation. An organi)ation6s vision statement should %e massivel inspiring, overarching, and long-term. 'rue (alse
"". Although vision statements var from organi)ation to organi)ation, vision statements are intended to motivate and inspire emplo ees to $ork to$ard a general goal. 'rue (alse
"*. Strategic o%@ectives are more specific than vision statements. 'rue (alse
"+. According to the te#t, a mission statement is an overarching statement that is massivel inspiring, long-term, and onl discusses the purpose of the compan . 'rue (alse
",. A mission statement encompasses %oth the purpose of the compan as $ell as the %asis of competition and competitive advantage. 'rue (alse
"-. Some e#cellent e#amples of mission statements are: &'o %e the happiest place on earth& 28isne 3 and &restoring patients to full life& 2Medtronic3. 'rue (alse
".. Strategic o%@ectives should %e measura%le, specific, appropriate, and realistic, %ut not constrained % time deadlines. 'rue (alse
1-+
"0. Much research has supported the notion that individuals $ork much harder $hen the are asked to &do their %est& rather than $hen the are striving to$ard a specific goal. 'rue (alse
"4. <%@ectives in organi)ations should %e clear, stated, and kno$n % emplo ees throughout the organi)ation. 'rue (alse
*0. Strategic management should onl include short-term o%@ectives. :ong-term o%@ectives are covered in the organi)ation6s vision statement. 'rue (alse
*1. <rgani)ational goals and o%@ectives should %e vague in order to allo$ for changes in strateg . 'rue (alse
Multiple Choice Questions
*". 'he te#t addresses t$o perspectives of leadership as $ell as their implications. 'hese t$o perspectives are A. romantic and unromantic. 1. romantic and internal control. C. e#ternal control and unromantic. 8. romantic and e#ternal control.
1-,
**. A C5< made a lot of mistakes such as committing errors in assessing the market and competitive conditions and improperl redesigning the organi)ation into numerous %usiness units. Such errors led to significant performance declines. According to the te#t, this e#ample illustrates the AAAAAAAAAA perspective of leadership. A. e#ternal control 1. romantic C. internal mechanism 8. operational
*+. According to the te#t, the strategic management process entails three ongoing processes: A. anal sis, actions, and s nthesis. 1. anal sis, decisions, and actions. C. anal sis, evaluation, and criti!ue. 8. anal sis, s nthesis, and antithesis.
*,. Management innovations such as total !ualit , %enchmarking, and %usiness process reengineering cannot lead to sustaina%le competitive advantage %ecause A. companies that have implemented these techni!ues have lost mone . 1. there is no proof that these techni!ues $ork. C. the cost too much mone and effort to implement. 8. ever compan is tr ing to implement them and hence it does not make a compan different from others.
*-. 'he &organi)ational versus individual rationalit & perspective suggests that A. $hat is good for a functional area is al$a s good for the organi)ation. 1. $hat is good for the organi)ation is al$a s good for a functional area. C. $hat is %est for a functional area ma not %e %est for the organi)ation. 8. the &incremental& perspective ma %e %est for functional areas $hile the &rational& perspective ma %e %est for the organi)ation.
1--
*.. 'he four ke attri%utes of strategic management include the idea that A. strateg must %e directed to$ard overall organi)ational goals and o%@ectives. 1. strateg must %e focused on long-term o%@ectives. C. strateg must %e focused on one specific area of an organi)ation. 8. strateg must focus on competitor strengths.
*0. 'he four ke attri%utes of strategic management include all of the follo$ing except: A. including multiple stakeholder interests in decision making. 1. incorporating %oth short-term and long-term perspectives. C. recogni)ing the trade-offs %et$een effectiveness and efficienc . 8. emphasis on the attainment of short-term o%@ectives.
*4. &5ffectiveness& is often defined as A. doing things right. 1. stakeholder satisfaction. C. doing the right thing. 8. productivit enhancement.
+0. All of the follo$ing are am%ide#trous %ehaviors except A. taking initiative and %eing alert to opportunities %e ond the confines of one6s o$n @o%. 1. %eing cooperative and seeking opportunities to com%ine one6s efforts $ith others. C. intensel focusing on one6s o$n responsi%ilities and ma#imi)ing the output of one6s department in an organi)ation. 8. %eing %rokers, al$a s looking to %uild internal linkages.
+1. According to Benr Mint)%erg, the reali)ed strategies of a firm A. are a com%ination of deli%erate and emergent strategies. 1. are a com%ination of deli%erate and differentiation strategies. C. must %e %ased on a compan 6s strategic plan. 8. must %e kept confidential for competitive reasons.
1-.
+". According to Benr Mint)%erg, decisions flo$ing from a firm6s strategic anal sis are its A. emergent strateg . 1. deli%erate strateg . C. intended strateg . 8. reali)ed strateg .
+*. AAAAAAAAAA ma %e considered the &advance $ork& that must %e done in order to effectivel formulate and implement strategies. A. ?oal setting 1. Corporate entrepreneurship C. Strateg anal sis 8. <rgani)ational design
++. AAAAAAAAAA involves ensuring proper strategic controls and organi)ational designs. A. Corporate governance 1. Corporate-level strateg C. Strateg implementation 8. 1usiness-level strateg
+,. 'he three participants in corporate governance are A. the shareholders, %oard of directors, and emplo ees. 1. the shareholders, la%or unions, and emplo ees. C. the shareholders, %oard of directors, and management. 8. the shareholders, %anks and lending institutions, and management.
+-. ;hile $orking to prioriti)e and fulfill their responsi%ilities, mem%ers of an organi)ation6s %oard of directors should A. represent their o$n interests. 1. represent the interests of the shareholders. C. direct all actions of the C5<. 8. emphasi)e the importance of short-term goals.
1-0
+.. Mem%ers of 1oards of 8irectors are A. appointed % the Securities and 5#change Commission. 1. elected % the shareholders as their representatives. C. elected % the pu%lic. 8. onl allo$ed to serve one term of four ears.
+0. An organi)ation is responsi%le to man different entities. /n order to meet the demands of these groups, organi)ations must participate in stakeholder management. Stakeholder management means that A. interests of the stockholders are not the onl interests that matter. 1. stakeholders are second in importance to the stockholders. C. stakeholders and managers inevita%l $ork at cross-purposes. 8. all stakeholders receive financial re$ards.
+4. Stakeholders are A. a ne$ $a to descri%e stockholders. 1. individuals, groups, and organi)ations $ho have a stake in the success of the organi)ation. C. creditors $ho hold a lien on the assets of the organi)ation. 8. attorne s and their clients $ho sue the organi)ation.
,0. <ut%ack Steakhouse has developed a sophisticated !uantitative model and found that there $ere positive relationships %et$een emplo ee satisfaction, customer satisfaction, and financial results. According to the te#t, this is an e#ample of AAAAAAAAAA. A. )ero-sum relationship among stakeholders 1. stakeholder s m%iosis C. re$arding stakeholders 8. emphasi)ing financial returns
,1. 'here are several perspectives of competition. <ne perspective is )ero-sum thinking. Cero-sum thinking means that A. all parts of the organi)ation gain at no loss. 1. in order for someone to gain others must e#perience no gain or %enefit. C. one can onl gain at the e#pense of someone else. 8. ever one in the organi)ation shares gains and losses e!uall .
1-4
,". Managers should do more than @ust focus on short-term financial performance. <ne concept that helps managers do this is stakeholder s m%iosis. 'his means that A. stakeholders are dependent on each other for their success. 1. stakeholders look out for their individual interests. C. one can onl gain at the e#pense of someone else. 8. all stakeholders $ant to ma#imi)e shareholder returns.
,*. Cro$dsourcing can %e defined as A. using surve s to get supplier input. 1. using multiple sources for a firm6s ra$ material inputs. C. tapping the latent talent of the online cro$d. 8. addressing strategic issues directl $ith managers and emplo ees.
,+. (irms must %e a$are of goals other than short-term profit ma#imi)ation. <ne area of concern should %e social responsi%ilit $hich is A. the e#pectation that %usiness $ill strive to improve the overall $elfare of societ . 1. the idea that organi)ations are solel responsi%le to local citi)ens. C. the fact that court costs could impact the financial %ottom line. 8. the idea that %usinesses are responsi%le to maintain a health social climate for their emplo ees.
,,. According to the te#t, the &triple %ottom line& approach to corporate accounting includes $hich three components A. financial, environmental, and customer. 1. financial, organi)ational, and customer. C. financial, environmental, and social. 8. financial, organi)ational, and ps chological.
,-. Man organi)ations have a large num%er of functional areas $ith ver diverse, and sometimes competing, interests. Such organi)ations $ill %e most effective if A. each functional area focuses on achieving their o$n goals. 1. functional areas $ork together to attain overall goals. C. goals are defined at the %ottom and implemented at the top. 8. management and emplo ees have separate goals.
1-10
,.. Strateg formulation and implementation is a challenging on-going process. 'o %e effective, it should involve A. the C5< and the %oard of directors. 1. the %oard of directors, C5<, and C(<. C. line and staff managers. 8. all of the a%ove.
,0. 'he te#t argues that a strategic perspective in an organi)ation should %e emphasi)ed A. at the top of the organi)ation. 1. at the middle of the organi)ation. C. throughout the organi)ation. 8. from the %ottom up.
,4. =eter Senge, of M./.'., recogni)ed three t pes of leaders. AAAAAAAAAA are individuals that, although having little positional po$er and formal authorit , generate their po$er through the conviction and clarit of their ideas. A. :ocal line leaders 1. 5#ecutive leaders C. /nternal net$orkers 8. Shop floor leaders
-0. =eter Senge, of M./.'., recogni)ed three t pes of leaders. AAAAAAAAAA champion and guide ideas, create a learning infrastructure, and esta%lish a domain for taking action. A. :ocal line leaders 1. 5#ecutive leaders C. /nternal net$orkers 8. Shop floor leaders
-1. :eadership is a necessar 2%ut not sufficient3 condition for organi)ational success. :eaders should emerge at $hich level2s3 of an organi)ationD A. onl at the top 1. in the middle C. throughout the organi)ation 8. onl during times of change
1-11
-". 'he hierarch of organi)ational goals is in this order 2least specific to most specific3: A. vision statements, strategic o%@ectives, mission statements. 1. mission statements, strategic o%@ectives, vision statements. C. vision statements, mission statements, strategic o%@ectives. 8. mission statements, vision statements, strategic o%@ectives.
-*. Eision statements are used to create a %etter understanding of the organi)ation6s overall purpose and direction. Eision statements A. are ver specific. 1. provide specific o%@ectives. C. set organi)ational structure. 8. evoke po$erful and compelling mental images.
-+. 5ffective vision statements include A. all strategic directions of the organi)ation. 1. a %rief statement of the compan 6s direction. C. strategic posturing and future o%@ectives. 8. financial o%@ectives and pro@ected figures.
-,. 5#amples of AAAAAAAAAA include: &to %e the happiest place on earth&28isne 3, and &restoring patients to full life& 2Medtronics3. A. vision statements 1. mission statements C. strategic o%@ectives 8. operational o%@ectives
--. ;ellpoint Bealth Net$orks states: &;ellpoint $ill redefine our industr : through a ne$ generation of consumer-friendl products that put individuals %ack in control of their future.& 'his is an e#ample of a A. strategic o%@ective. 1. vision statement. C. vague statement of direction. 8. line manager6s individual goal.
1-1"
-.. /n contrast to an organi)ation6s vision, its mission should A. %e shorter in length. 1. encompass %oth the purpose of the compan as $ell as the %asis of competition. C. encompass all the ma@or rules and regulations of the corporate $ork force. 8. %e less detailed.
-0. An organi)ation6s mission statement and vision statement set the overall direction of the organi)ation. Strategic o%@ectives A. operationali)e the mission statement. 1. modif the mission statement. C. are a shorter version of the mission statement. 8. are onl clarified % the %oard of directors.
-4. Successful organi)ations are effective in motivating people. 5mplo ees $ork %est $hen A. the are asked to &do their %est.& 1. $ork re!uirements are vague and unclear. C. the are striving to$ard specific goals. 8. the are guided % an a%stract mission statement.
.0. (ortune 1rands states the $ill &cut corporate costs % F*0 million a ear.& 'his is an e#ample of a A. nonfinancial strategic o%@ective. 1. financial strategic o%@ective. C. vision statement. 8. mission statement.
.1. &;e $ant to %e the top-ranked supplier % our customers.& 2==?3 'his is an e#ample of a A. nonfinancial strategic o%@ective. 1. financial strategic o%@ective. C. vision statement. 8. mission statement.
1-1*
.". /n large organi)ations, conflicts can arise %et$een functional areas. /n order to resolve these conflicts, strategic o%@ectives A. put financial o%@ectives a%ove human considerations. 1. align departments to$ard departmental goals. C. help resolve conflicts through their common purpose. 8. cause de%ate and increase conflict.
Essay Questions
.*. 'he strategic management process includes strateg anal sis, strateg formulation, and strateg implementation. 8iscuss each of these steps.
.+. 8iscuss the ke elements of corporate governance.
.,. A firm has a variet of different stakeholders. /dentif several possi%le stakeholders a firm ma have and discuss ho$ the firm ma achieve stakeholder s m%iosis.
1-1+
.-. :eadership is a topic that is often discussed in the management literature. 'he te#t suggests that leaders should %e at all levels in an organi)ation. 8iscuss $h it is important to have leaders throughout an organi)ation.
... According to the te#t, vision statements should %e massivel inspiring, overarching, and long term. =rovide several e#amples of potential vision statements for various organi)ations and discuss ho$ such vision statements $ould inspire emplo ees around a cause.
.0. A mission statement encompasses the purpose of the compan as $ell as the %asis of competition and competitive advantage. Compare the purpose of a mission statement to that of a vision statement and a strategic o%@ective.
.4. <rgani)ations must focus on financial and nonfinancial o%@ectives. Select an organi)ation and discuss possi%le financial and nonfinancial o%@ectives the organi)ation ma have.
1-1,
00. 'he te#t discusses several characteristics of effective strategic o%@ectives. :ist several of these and discuss $h a firm6s strategic o%@ectives should meet these criteria.
1-1-
Chapter 01 Strategic Management: Creating Competitive Advantages Ans$er Ge
True / False Questions
1. (p. 6) Nortel, like other firms, suffered from a drop in overall industr demand for telecommunications e!uipment during "000 and "001. According to the te#t, this $ould %e an e#ample of the &romantic& perspective of leadership. FA SE
AACSB: Analytic Bloom's: Comprehension Difficulty: Medium earnin! "#$ecti%e: &'('
". (p. )) Strategic management consists of the anal sis, decisions, and actions an organi)ation undertakes in order to create and sustain competitive advantages. T!"E
AACSB: Analytic Bloom's: *no+led!e Difficulty: ,asy earnin! "#$ecti%e: &'('
*. (p. )) Strategic management includes strateg anal sis, strateg formulation, and strateg implementation. T!"E
1-1.
+. (p. )) Management innovations such as total !ualit , %enchmarking, and %usiness process reengineering often lead to sustaina%le competitive advantage. FA SE
,. (p. '') Strategic management recogni)es the trade-offs %et$een effectiveness and efficienc . T!"E
-. (p. '-) 'he %est firms al$a s reali)e their intended strateg . FA SE
AACSB: Analytic Bloom's: Comprehension Difficulty: Medium earnin! "#$ecti%e: &'(.
.. (p. '/) According to the te#t, formulating strateg includes taking into consideration strateg at the %usiness, international, and corporate levels. /n addition managers must formulate effective entrepreneurial initiatives. T!"E
1-10
0. (p. '/) 1usiness-level strateg focuses on t$o issues, 213 $hat %usinesses to compete in, and 2"3 ho$ %usinesses can %e managed to achieve s nerg . FA SE
AACSB: Analytic Bloom's: *no+led!e Difficulty: ,asy earnin! "#$ecti%e: &'(.
4. (p. '/) Corporate-level strateg addresses ho$ firms compete and outperform their rivals as $ell as achieve and sustain competitive advantages. FA SE
10. (p. '6) 5ffective leadership can pla a large role in fostering corporate entrepreneurship. Corporate entrepreneurship can have a ver positive impact on a firm6s %ottom line. T!"E
11. (p. '0) 'he three primar participants in corporate governance are: 213 the shareholders7 2"3 management 2led % the chief e#ecutive officer37 and, 2*3 emplo ees. FA SE
AACSB: Analytic Bloom's: *no+led!e Difficulty: ,asy earnin! "#$ecti%e: &'(-
1-14
1". (p. '0 ( '1) 8ecisions % 1oards of 8irectors are al$a s consistent $ith shareholder interests. FA SE
AACSB: Analytic Bloom's: Comprehension Difficulty: Medium earnin! "#$ecti%e: &'(-
1*. (p. '1) (ormer Chr sler vice chairman 9o%ert :ut) stated: &;e are here to serve the shareholder and create shareholder value. / insist that the onl person $ho o$ns the compan is the person $ho paid good mone for it.& 'his is an e#ample of a s m%iotic approach to stakeholder management. FA SE
AACSB: Analytic Bloom's: *no+led!e Difficulty: Medium earnin! "#$ecti%e: &'(-
1+. (p. '1) Stockholders in a compan are the onl individuals $ith an interest in the financial performance in the compan . FA SE
1,. (p. '1) Stockholders, emplo ees, and the communit -at-large are among a firm6s stakeholders. T!"E
1-"0
1-. (p. '1) S m%iosis is the a%ilit to recogni)e interdependencies among the interests of multiple stakeholders $ithin and outside an organi)ation. T!"E
1.. (p. ')) <ne of the %enefits of cro$dsourcing is that stakeholders are restricted to one narro$ role. FA SE
10. (p. .') Social responsi%ilit is the idea that organi)ations are not onl accounta%le to stockholders %ut also to the communit -at-large. T!"E
AACSB: Analytic Bloom's: *no+led!e Difficulty: ,asy earnin! "#$ecti%e: &'(2
14. (p. ..) Shell, N5C, and =roctor > ?am%le have %een measuring their performance according to $hat has %een called a &triple %ottom line.& 'his techni!ue involves an assessment of financial, social, and environmental performance. T!"E
AACSB: Analytic Bloom's: Comprehension Difficulty: Medium earnin! "#$ecti%e: &'(2
1-"1
"0. (p. .2 ( ./) 'he strategic management process should %e addressed onl % top-level e#ecutives. Mid-level and lo$-level emplo ees are %est e!uipped to implement the organi)ation6s strategies. FA SE
AACSB: Analytic Bloom's: *no+led!e Difficulty: ,asy earnin! "#$ecti%e: &'(/
"1. (p. .6) <rgani)ational vision statements are the %eginning point for the hierarch of goals throughout the organi)ation. An organi)ation6s vision statement should %e massivel inspiring, overarching, and long-term. T!"E
"". (p. .0 ( .1) Although vision statements var from organi)ation to organi)ation, vision statements are intended to motivate and inspire emplo ees to $ork to$ard a general goal. T!"E
"*. (p. .0) Strategic o%@ectives are more specific than vision statements. T!"E
1-""
"+. (p. .1) According to the te#t, a mission statement is an overarching statement that is massivel inspiring, long-term, and onl discusses the purpose of the compan . FA SE
",. (p. .1) A mission statement encompasses %oth the purpose of the compan as $ell as the %asis of competition and competitive advantage. T!"E
"-. (p. .0) Some e#cellent e#amples of mission statements are: &'o %e the happiest place on earth& 28isne 3 and &restoring patients to full life& 2Medtronic3. FA SE
".. (p. .)) Strategic o%@ectives should %e measura%le, specific, appropriate, and realistic, %ut not constrained % time deadlines. FA SE
1-"*
"0. (p. -') Much research has supported the notion that individuals $ork much harder $hen the are asked to &do their %est& rather than $hen the are striving to$ard a specific goal. FA SE
"4. (p. .)3 -') <%@ectives in organi)ations should %e clear, stated, and kno$n % emplo ees throughout the organi)ation. T!"E
*0. (p. .)) Strategic management should onl include short-term o%@ectives. :ong-term o%@ectives are covered in the organi)ation6s vision statement. FA SE
*1. (p. .)) <rgani)ational goals and o%@ectives should %e vague in order to allo$ for changes in strateg . FA SE
1-"+

Multiple Choice Questions
*". (p. / ( 6) 'he te#t addresses t$o perspectives of leadership as $ell as their implications. 'hese t$o perspectives are A. romantic and unromantic. 1. romantic and internal control. C. e#ternal control and unromantic. #$ romantic and e#ternal control.
**. (p. /) A C5< made a lot of mistakes such as committing errors in assessing the market and competitive conditions and improperl redesigning the organi)ation into numerous %usiness units. Such errors led to significant performance declines. According to the te#t, this e#ample illustrates the AAAAAAAAAA perspective of leadership. A. e#ternal control %$ romantic C. internal mechanism 8. operational
*+. (p. )) According to the te#t, the strategic management process entails three ongoing processes: A. anal sis, actions, and s nthesis. %$ anal sis, decisions, and actions. C. anal sis, evaluation, and criti!ue. 8. anal sis, s nthesis, and antithesis.
1-",
*,. (p. )) Management innovations such as total !ualit , %enchmarking, and %usiness process reengineering cannot lead to sustaina%le competitive advantage %ecause A. companies that have implemented these techni!ues have lost mone . 1. there is no proof that these techni!ues $ork. C. the cost too much mone and effort to implement. #$ ever compan is tr ing to implement them and hence it does not make a compan different from others.
*-. (p. '&) 'he &organi)ational versus individual rationalit & perspective suggests that A. $hat is good for a functional area is al$a s good for the organi)ation. 1. $hat is good for the organi)ation is al$a s good for a functional area. C$ $hat is %est for a functional area ma not %e %est for the organi)ation. 8. the &incremental& perspective ma %e %est for functional areas $hile the &rational& perspective ma %e %est for the organi)ation.
*.. (p. '&) 'he four ke attri%utes of strategic management include the idea that A$ strateg must %e directed to$ard overall organi)ational goals and o%@ectives. 1. strateg must %e focused on long-term o%@ectives. C. strateg must %e focused on one specific area of an organi)ation. 8. strateg must focus on competitor strengths.
1-"-
*0. (p. '&) 'he four ke attri%utes of strategic management include all of the follo$ing except: A. including multiple stakeholder interests in decision making. 1. incorporating %oth short-term and long-term perspectives. C. recogni)ing the trade-offs %et$een effectiveness and efficienc . #$ emphasis on the attainment of short-term o%@ectives.
*4. (p. '') &5ffectiveness& is often defined as A. doing things right. 1. stakeholder satisfaction. C$ doing the right thing. 8. productivit enhancement.
+0. (p. '.) All of the follo$ing are am%ide#trous %ehaviors except A. taking initiative and %eing alert to opportunities %e ond the confines of one6s o$n @o%. 1. %eing cooperative and seeking opportunities to com%ine one6s efforts $ith others. C$ intensel focusing on one6s o$n responsi%ilities and ma#imi)ing the output of one6s department in an organi)ation. 8. %eing %rokers, al$a s looking to %uild internal linkages.
1-".
+1. (p. '-) According to Benr Mint)%erg, the reali)ed strategies of a firm A$ are a com%ination of deli%erate and emergent strategies. 1. are a com%ination of deli%erate and differentiation strategies. C. must %e %ased on a compan 6s strategic plan. 8. must %e kept confidential for competitive reasons.
+". (p. '-) According to Benr Mint)%erg, decisions flo$ing from a firm6s strategic anal sis are its A. emergent strateg . 1. deli%erate strateg . C$ intended strateg . 8. reali)ed strateg .
+*. (p. '-) AAAAAAAAAA ma %e considered the &advance $ork& that must %e done in order to effectivel formulate and implement strategies. A. ?oal setting 1. Corporate entrepreneurship C$ Strateg anal sis 8. <rgani)ational design
1-"0
++. (p. '6) AAAAAAAAAA involves ensuring proper strategic controls and organi)ational designs. A. Corporate governance 1. Corporate-level strateg C$ Strateg implementation 8. 1usiness-level strateg
+,. (p. '0) 'he three participants in corporate governance are A. the shareholders, %oard of directors, and emplo ees. 1. the shareholders, la%or unions, and emplo ees. C$ the shareholders, %oard of directors, and management. 8. the shareholders, %anks and lending institutions, and management.
+-. (p. '0) ;hile $orking to prioriti)e and fulfill their responsi%ilities, mem%ers of an organi)ation6s %oard of directors should A. represent their o$n interests. %$ represent the interests of the shareholders. C. direct all actions of the C5<. 8. emphasi)e the importance of short-term goals.
1-"4
+.. (p. '0) Mem%ers of 1oards of 8irectors are A. appointed % the Securities and 5#change Commission. %$ elected % the shareholders as their representatives. C. elected % the pu%lic. 8. onl allo$ed to serve one term of four ears.
+0. (p. '1) An organi)ation is responsi%le to man different entities. /n order to meet the demands of these groups, organi)ations must participate in stakeholder management. Stakeholder management means that A$ interests of the stockholders are not the onl interests that matter. 1. stakeholders are second in importance to the stockholders. C. stakeholders and managers inevita%l $ork at cross-purposes. 8. all stakeholders receive financial re$ards.
+4. (p. '1) Stakeholders are A. a ne$ $a to descri%e stockholders. %$ individuals, groups, and organi)ations $ho have a stake in the success of the organi)ation. C. creditors $ho hold a lien on the assets of the organi)ation. 8. attorne s and their clients $ho sue the organi)ation.
1-*0
,0. (p. ')) <ut%ack Steakhouse has developed a sophisticated !uantitative model and found that there $ere positive relationships %et$een emplo ee satisfaction, customer satisfaction, and financial results. According to the te#t, this is an e#ample of AAAAAAAAAA. A. )ero-sum relationship among stakeholders %$ stakeholder s m%iosis C. re$arding stakeholders 8. emphasi)ing financial returns
,1. (p. '1) 'here are several perspectives of competition. <ne perspective is )ero-sum thinking. Cero-sum thinking means that A. all parts of the organi)ation gain at no loss. 1. in order for someone to gain others must e#perience no gain or %enefit. C$ one can onl gain at the e#pense of someone else. 8. ever one in the organi)ation shares gains and losses e!uall .
,". (p. '1) Managers should do more than @ust focus on short-term financial performance. <ne concept that helps managers do this is stakeholder s m%iosis. 'his means that A$ stakeholders are dependent on each other for their success. 1. stakeholders look out for their individual interests. C. one can onl gain at the e#pense of someone else. 8. all stakeholders $ant to ma#imi)e shareholder returns.
1-*1
,*. (p. ')) Cro$dsourcing can %e defined as A. using surve s to get supplier input. 1. using multiple sources for a firm6s ra$ material inputs. C$ tapping the latent talent of the online cro$d. 8. addressing strategic issues directl $ith managers and emplo ees.
,+. (p. .') (irms must %e a$are of goals other than short-term profit ma#imi)ation. <ne area of concern should %e social responsi%ilit $hich is A$ the e#pectation that %usiness $ill strive to improve the overall $elfare of societ . 1. the idea that organi)ations are solel responsi%le to local citi)ens. C. the fact that court costs could impact the financial %ottom line. 8. the idea that %usinesses are responsi%le to maintain a health social climate for their emplo ees.
,,. (p. ..) According to the te#t, the &triple %ottom line& approach to corporate accounting includes $hich three components A. financial, environmental, and customer. 1. financial, organi)ational, and customer. C$ financial, environmental, and social. 8. financial, organi)ational, and ps chological.
1-*"
,-. (p. .2) Man organi)ations have a large num%er of functional areas $ith ver diverse, and sometimes competing, interests. Such organi)ations $ill %e most effective if A. each functional area focuses on achieving their o$n goals. %$ functional areas $ork together to attain overall goals. C. goals are defined at the %ottom and implemented at the top. 8. management and emplo ees have separate goals.
AACSB: Analytic Bloom's: Comprehension Difficulty: Medium earnin! "#$ecti%e: &'(/
,.. (p. .2 ( ./) Strateg formulation and implementation is a challenging on-going process. 'o %e effective, it should involve A. the C5< and the %oard of directors. 1. the %oard of directors, C5<, and C(<. C. line and staff managers. #$ all of the a%ove.
,0. (p. ./) 'he te#t argues that a strategic perspective in an organi)ation should %e emphasi)ed A. at the top of the organi)ation. 1. at the middle of the organi)ation. C$ throughout the organi)ation. 8. from the %ottom up.
1-**
,4. (p. ./) =eter Senge, of M./.'., recogni)ed three t pes of leaders. AAAAAAAAAA are individuals that, although having little positional po$er and formal authorit , generate their po$er through the conviction and clarit of their ideas. A. :ocal line leaders 1. 5#ecutive leaders C$ /nternal net$orkers 8. Shop floor leaders
-0. (p. ./) =eter Senge, of M./.'., recogni)ed three t pes of leaders. AAAAAAAAAA champion and guide ideas, create a learning infrastructure, and esta%lish a domain for taking action. A. :ocal line leaders %$ 5#ecutive leaders C. /nternal net$orkers 8. Shop floor leaders
-1. (p. ./) :eadership is a necessar 2%ut not sufficient3 condition for organi)ational success. :eaders should emerge at $hich level2s3 of an organi)ationD A. onl at the top 1. in the middle C$ throughout the organi)ation 8. onl during times of change
1-*+
-". (p. .0) 'he hierarch of organi)ational goals is in this order 2least specific to most specific3: A. vision statements, strategic o%@ectives, mission statements. 1. mission statements, strategic o%@ectives, vision statements. C$ vision statements, mission statements, strategic o%@ectives. 8. mission statements, vision statements, strategic o%@ectives.
-*. (p. .6 ( .0) Eision statements are used to create a %etter understanding of the organi)ation6s overall purpose and direction. Eision statements A. are ver specific. 1. provide specific o%@ectives. C. set organi)ational structure. #$ evoke po$erful and compelling mental images.
-+. (p. .6 ( .0) 5ffective vision statements include A. all strategic directions of the organi)ation. %$ a %rief statement of the compan 6s direction. C. strategic posturing and future o%@ectives. 8. financial o%@ectives and pro@ected figures.
1-*,
-,. (p. .0) 5#amples of AAAAAAAAAA include: &to %e the happiest place on earth&28isne 3, and &restoring patients to full life& 2Medtronics3. A$ vision statements 1. mission statements C. strategic o%@ectives 8. operational o%@ectives
--. (p. .1) ;ellpoint Bealth Net$orks states: &;ellpoint $ill redefine our industr : through a ne$ generation of consumer-friendl products that put individuals %ack in control of their future.& 'his is an e#ample of a A. strategic o%@ective. %$ vision statement. C. vague statement of direction. 8. line manager6s individual goal.
-.. (p. .1 ( .)) /n contrast to an organi)ation6s vision, its mission should A. %e shorter in length. %$ encompass %oth the purpose of the compan as $ell as the %asis of competition. C. encompass all the ma@or rules and regulations of the corporate $ork force. 8. %e less detailed.
1-*-
-0. (p. .)) An organi)ation6s mission statement and vision statement set the overall direction of the organi)ation. Strategic o%@ectives A$ operationali)e the mission statement. 1. modif the mission statement. C. are a shorter version of the mission statement. 8. are onl clarified % the %oard of directors.
-4. (p. -') Successful organi)ations are effective in motivating people. 5mplo ees $ork %est $hen A. the are asked to &do their %est.& 1. $ork re!uirements are vague and unclear. C$ the are striving to$ard specific goals. 8. the are guided % an a%stract mission statement.
.0. (p. -&) (ortune 1rands states the $ill &cut corporate costs % F*0 million a ear.& 'his is an e#ample of a A. nonfinancial strategic o%@ective. %$ financial strategic o%@ective. C. vision statement. 8. mission statement.
1-*.
.1. (p. -&) &;e $ant to %e the top-ranked supplier % our customers.& 2==?3 'his is an e#ample of a A$ nonfinancial strategic o%@ective. 1. financial strategic o%@ective. C. vision statement. 8. mission statement.
.". (p. -') /n large organi)ations, conflicts can arise %et$een functional areas. /n order to resolve these conflicts, strategic o%@ectives A. put financial o%@ectives a%ove human considerations. 1. align departments to$ard departmental goals. C$ help resolve conflicts through their common purpose. 8. cause de%ate and increase conflict.
Essay Questions
.*. (p. )) 'he strategic management process includes strateg anal sis, strateg formulation, and strateg implementation. 8iscuss each of these steps. Ans$ers $ill var .
1-*0
.+. (p. '6 ( '0) 8iscuss the ke elements of corporate governance. Ans$ers $ill var .
.,. (p. '1) A firm has a variet of different stakeholders. /dentif several possi%le stakeholders a firm ma have and discuss ho$ the firm ma achieve stakeholder s m%iosis. Ans$ers $ill var .
.-. (p. .2 ( ./) :eadership is a topic that is often discussed in the management literature. 'he te#t suggests that leaders should %e at all levels in an organi)ation. 8iscuss $h it is important to have leaders throughout an organi)ation. Ans$ers $ill var .
AACSB: Analytic Bloom's: Application Difficulty: 4ard earnin! "#$ecti%e: &'(/
1-*4
... (p. .6 ( .1) According to the te#t, vision statements should %e massivel inspiring, overarching, and long term. =rovide several e#amples of potential vision statements for various organi)ations and discuss ho$ such vision statements $ould inspire emplo ees around a cause. Ans$ers $ill var .
AACSB: Analytic Bloom's: Application Difficulty: 4ard earnin! "#$ecti%e: &'(6
.0. (p. .1 ( .)) A mission statement encompasses the purpose of the compan as $ell as the %asis of competition and competitive advantage. Compare the purpose of a mission statement to that of a vision statement and a strategic o%@ective. Ans$ers $ill var .
.4. (p. .) ( -') <rgani)ations must focus on financial and nonfinancial o%@ectives. Select an organi)ation and discuss possi%le financial and nonfinancial o%@ectives the organi)ation ma have. Ans$ers $ill var .
AACSB: Analytic Bloom's: Application Difficulty: 4ard earnin! "#$ecti%e: &'(6
1-+0
00. (p. .)) 'he te#t discusses several characteristics of effective strategic o%@ectives. :ist several of these and discuss $h a firm6s strategic o%@ectives should meet these criteria. Ans$ers $ill var .
1-+1

Chapter 01 - Strategic Management: Creating Competitive Advantages

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Chapter 01 - Strategic Management: Creating Competitive Advantages

Uploaded by

Copyright:

Available Formats

Chapter 01 - Strategic Management: Creating Competitive Advantages