Professional Documents
Culture Documents
3. The goal of the organization's ______ is to capture the hearts and minds of
employees, challenge them and evoke their emotions and dreams.
Vision.
Mission.
Culture.
Strategy.
8. Competitors are more likely to respond to competitive actions that are taken
by -
Differentiators.
Larger companies.
First movers.
Market leaders.
13. Mergers and acquisitions are often driven by such strategic objectives so as
to -
Expand a company's geographic coverage or extend its business into new
product categories.
Reduce the number of industry key success factors.
Reduce the number of strategic groups in the industry.
21. Which of the following defines what business or businesses the firm is in or
should be in?
Business strategy.
Corporate strategy.
Functional strategy.
National strategy.
22. Which of the following is NOT included in the Porter’s Five Forces model:
Potential development of substitute products.
Bargaining power of suppliers.
Rivalry among stockholders.
Rivalry among competing firms.
23. Which of the following SWOT elements are internal factors for a business?
Strengths and Weaknesses.
Opportunities and Threats.
Strengths and Opportunities.
Weaknesses and Threats.
24. Which of the following is false regarding why a SWOT Analysis is used?
To build on the strengths of a business.
To minimize the weaknesses of a business.
To reduce opportunities available to a business.
To counteract threats to a business.
31. From the list below, identify which factor does not form one of the six key
areas of a PESTEL analysis.
Socio-cultural changes.
Ecological changes.
Political changes.
Technological changes.
32. Barriers to entry affect the ability of firms outside an industry to enter and
take advantage of profit opportunities. Which of the following is not an example
of such a barrier?
The relative size of existing firms in the industry.
Capital requirements.
Economies of scale.
Product differentiation.
Switching costs.
34. In many respects, the real danger in analyzing the environment is to limit
the process to examining past events and ways of thinking. It is absolutely
essential to break out of the current mould and examine alternative routes and
ideas.
True.
False.
35. What two types of market segments did Michael Porter use in developing
his generic strategies model?
Lifestyles and behavior.
Geographic and class-based segments.
Residential neighborhoods and occupations.
Broad target and narrow target.
38. Which of the following sentences best summarizes the differences between
the red and blue oceans strategies?
In the red oceans, industry boundaries are defined and accepted and the
competitive rules of the game are known. Blue oceans are occasionally created
well beyond existing industry boundaries.
Red oceans denote an environment where products are not yet well defined
while blue oceans refer to the frequently accessed marketplaces where the
products are well-defined, competitors are known and competition is based on
price, product quality and service.
Blue oceans are an old paradigm that represents all the industries in existence
today while red oceans are those where companies beat competition by
focusing on developing compelling value innovations that create uncontested
market space.
Red oceans are about avoiding head-to-head competition while blue oceans
are about rivals fighting over a shrinking profit pool.
40. What is the term used in Ansoff's matrix for increasing market share with
existing products in existing markets?
Product development.
Market penetration.
Diversification.
Market development.
41. Which of the following is typically NOT seen as being associated with
strategic decisions?
The organization’s long-term direction.
The detailed planning of a department's work over the next month.
The values and expectations of powerful actors in the organization.
The scope of the organization’s activities.
46. What among the following is not a branch of strategy research that make
up the study of strategy?
Strategy content.
Strategic context.
Strategy lenses.
Strategy processes.
50. The variety lens suggests that new strategies take shape in organizations:
Because new ideas are tried out in the market and either succeed or do not.
Because the new ideas that develop from within it are selected by formal
evaluation through strategic planning systems.
Because there are sufficient people who find them attractive.
All of the above.
53. Which of the following is NOT the most useful ways in which a group of
managers could use scenario planning?
To consider plausible alternative futures.
To ensure that the managers always select the only scenario that will work in
practice.
To develop contingency plans for each scenario.
To increase the managers' understanding and perception of forces in the business
environment.
54. It is always useful to ensure that the three scenarios are 'optimistic',
'middling' and 'pessimistic'.
False.
True.
55. The five forces that affect the level of competition in an industry are:
The threat of entry; the power of buyers; the power of suppliers; the threat of
substitutes; and government action.
The threat of buyers; the power of entry; the power of substitutes; the threat of
suppliers; and the threat of recession.
The threat of recession; the power of buyers; the power of suppliers; the threat
of management failure; and competitive rivalry.
The threat of entrants; the power of buyers; the power of suppliers; the threat of
substitutes; and competitive rivalry.
56. In which of the following situations is buyer power NOT likely to be high?
Where switching costs are low.
Where ultimate consumer power is weak.
Where the buyer can threaten to compete.
Where a few large customers account for the majority of sales.
57. Forward vertical integration occurs when suppliers are able to cut out
buyers who act as intermediaries.
True.
False.
58. When identifying strategic groups, which two headings can the relevant
characteristics most usefully be grouped under?
Resource commitment.
Competitiveness.
PESTEL factors.
61. What term is used for an organization’s abilities to renew and recreate its
strategic capabilities to meet the needs of a changing environment?
Competent substitution.
Core competence.
Renewability.
Dynamic capabilities.
62. Core competences are the skills and abilities by which resources are
deployed through an organization’s activities and processes such as to:
Survive using approaches and techniques that others cannot imitate or obtain.
Survive.
Achieve competitive advantage in ways that others cannot imitate or obtain.
Achieve competitive advantage.
64. Which of the following statements incorrectly relates to explicit and tacit
knowledge?
A systems manual is an example of explicit knowledge.
Tacit knowledge is easier to imitate.
Explicit knowledge is easier to communicate.
Tacit knowledge is personal, context-specific and therefore hard to
communicate.
65. The sharing of knowledge and experience in organizations is an essentially
social and cultural process.
False.
True.
69. Which of the following answers the question: 'Where does the organization
aspire to be in the future?'
Mission statement.
Core values.
Vision statement.
Objectives.
70. Which statements does not accurately describe relationships that exist in a
large company?
The board is an agent for investment managers.
Investment managers are ultimately agents for the ultimate beneficiaries.
Investment managers are agents for the board.
71. Which is the most common types of governance structure?
The non-executive board model.
The manager–agent model.
The shareholder model.
75. Which stance on corporate social responsibility would focus on social and
market change, and give individuals in the organization responsibility for social
responsibility issues?
Enlightened self-interest.
Forum for stakeholder interaction.
Laissez-faire.
Shaper of society.
76. What name is given to the process of divulging information to outside bodies
when a person believes that their organization is failing in its corporate social
responsibility?
Showing enlightened self-interest.
Social auditing.
Legitimizing.
Whistle-blowing.
79. Which of the following is not one of the four broad categories of external
stakeholders?
Environmental.
Technological.
Economic.
Socio-political.
80. In many businesses there are periods of relative continuity during which
strategy changes incrementally. What is NOT the main reason for this?
By maintaining continuity during a period of environmental change, managers
can ensure growth.
Managers are experimenting around a theme.
Managers are unwilling to change a strategy that has been successful.
The environment is changing gradually.
81. Identify the reason for the development of core rigidities that make it
difficult for organizations to change.
Relationships are crucial to the change process.
Organizational practices are developed over time. These practices may become
embedded in organizational routines that are difficult to change.
Performance effects lag the development of core techniques.
83. Which of the following is NOT a reason why the history of the organization
is important for strategists?
It helps detect and avoid strategic drift.
It avoids misattributing the reasons for success.
It focuses the manager purely on the relevant organization.
It avoids the recency bias.
84. What term is used for a situation where early events and decisions establish
policy paths that have lasting effects on subsequent events and decisions?
Historicisation.
Strategic drift.
Cyclical strategy.
Path dependency.
85. Which of the following is not a way of carrying out an historical strategic
analysis?
Rigidity analysis.
Historical narratives.
Cyclical influences.
Chronological analysis.
86. Which approach to historical analysis would be most suitable for a manager
wanting to assess an organization’s attitudes to markets, customers and
change?
Cyclical influences.
Anchor points.
Key events and decisions ('anchor points').
Historical narratives.
87. Which of the following is not one of the four layers of organizational
culture?
Values.
Beliefs.
Paradigm.
History.
89. Which of the following questions is NOT the most likely to be useful when
analyzing the cultural web of an organisation?
Who are the heroes and villains?
How is power distributed?
How has the organisation been affected by strategic drift?
Is emphasis on reward or punishment?
90. Which two of the following explain why the 'taken-for-granted' nature is
centrally important in relation to strategy and the management of strategy?
Because this inevitably means that the culture gives an inaccurate picture of
the organisation.
Because the culture does not apply directly to managers.
Because organisations can be 'captured' by their culture and find it difficult to
change their strategy outside that culture.
92. ‘The approach was tried last year and failed.' Which of the following apply
to this statement?
It is an example of a routine or ritual.
It is an example of a rigid control system.
This statement could only be made in a flat organisational structure.
93. When describing organisational culture some writers use phrases such as
'the way things are around here'. In relation to this comment, which of the
following is the most useful task of strategists?
To build a future based solely on the existing culture.
To investigate the taken-for-granted aspects of the culture.
To make changes in control systems so that the culture changes.
To make structural change so that the culture changes.
95. Which of the following are generally used when identifying SBUs?
Market-based criteria.
Structurally-based criteria.
Finance-based criteria.
99. Which one of the following best explains the aim of collaboration?
To achieve advantage.
To avoid competition.
Neither to achieve advantage nor to avoid competition.
To achieve advantage or avoid competition.
100. Which of the following could be major benefits for a seller that collaborates
with a major customer in a technological industry such as aerospace or car
manufacturing?
Increased seller power.
It increases the buyer's power.
It enables the customer to increase barriers to entry.
103. Based on the basic assumptions of game theory, which principle guides the
development of successful competitive strategies?
'Think forwards and reason backwards'.
'Assume that your competitor cannot get in your mind'.
104. Consider the example of a company that is always battling on the basis of
price, but realizes that with its cost structure it cannot hope to compete
effectively. What, according to game theory, should it do?
Change the rules.
Avoid all collaboration.
Continue with current strategies, knowing that the competition will act
irrationally.
Continue with its current strategy.
105. What are the two constraints most likely to face organisations seeking
greater market penetration?
The risk of downsizing.
The need to consolidate market share.
Legal constraints.
107. What term is used for corporate development beyond current products
and markets, but within the capabilities or the value network of the
organisation?
Backward integration.
Related diversification.
Vertical integration.
Divergent diversification.
110. A film company and a music recording company may choose to combine,
believing that the result will be more effective than the sum of the two
component parts. What term is used for the benefits?
Synergy.
Diversification.
Integration.
Consolidation.
112. What does conventional finance theory say about the spreading of risk for
shareholders when a company diversifies?
There is significant benefit, provided the diversification leads to synergy.
There is little benefit to shareholders as they have already spread their risk by
holding a range of shares.
There is significant benefit, provided the diversification leads to an increase
in corporate parenting capabilities.
There are always significant benefits from the reductions in risk.
113. Which of the following definitions explains what is meant by the corporate
parent?
The central head office of the organisation.
The founder of the business.
The owner or major shareholder of the corporation.
The levels of management above that of business units.
114. Which of the following is NOT the key criteria that should be considered
in relation to a multi-business portfolio?
Potential problems.
Attractiveness.
Balance.
Fit.
116. Which of the following does not come under categories of cost drivers of
internationalization?
Scale economies.
Similar customer needs.
Country-specific differences.
Favorable logistics.
119. What name is given to the purchase of components and services from the
most appropriate suppliers around the world regardless of location?
International compartmentalization.
Multidomestic marketing.
Global sourcing.
The global–local dilemma.
120. The global–local dilemma in international strategy means:
The issues related to globalization and the alleged disadvantaging of
developing countries.
How many local people to employ in foreign subsidiaries.
Whether to centralize strategic decisions in head office or to devolve decision
making to subsidiaries.
The extent to which products and services may be standardized across national
boundaries or need to be adapted to meet the requirements of specific national
markets.
121. Which international strategy has a dispersed configuration and low levels of
coordination of international activities?
Transnational.
Global.
Multidomestic.
Export.
123. Which of the following key factor should NOT be considered when
assessing international retaliation?
The reactiveness of the defender.
Five Forces analysis.
The clout that a defender can muster.
The attractiveness of the market to the new entrant.
124. What term is used for an approach where firms initially use entry modes
that allow them to maximize knowledge acquisition while minimizing the
exposure of their assets?
Multidomestic expansion.
International competitor elimination.
Foreign direct investment.
Staged international expansion.
125. The view that innovation involves technologists creating new knowledge,
which then forms the basis for new products for the rest of the organisation to
produce and market, is known as market push.
True.
False.
127. What term is used for the process by which innovations spread among
users, varying in pace and extent?
The tipping point.
Incremental innovation.
Radical innovation.
Diffusion.
130. Which of the following is NOT the contextual factors that managers should
consider when deciding whether to move first or not?
The speed of change in the market.
The shape of the experience curve.
The organisation's capacity for profit capture.
The availability of complementary assets.
131. Which of the following is most likely to be a key issue during the start-up
stage?
Releasing capital as a reward.
Changing to intrapreneurship.
Sources of capital.
Changing from the role of entrepreneur to manager.
133. Which of the following is key issues that a social entrepreneur may NOT
consider at start-up?
The development of ecosystems.
Business model.
Social mission.
Organisational form.
135. Which of the following is least likely to be a motive for acquisitions and
mergers?
To increase capabilities.
To create consolidation opportunities.
To use existing capabilities more successfully.
To increase speed of entry into a rapidly changing market.
136. What term is used for M&A integration in which it is implied that both the
acquired firm and the acquiring firm learn the best qualities from the other?
Preservation.
Symbiosis.
Holding.
Absorption.
138. Which of the following is not a stage that occurs when two organisations
form and eventually dissolve an alliance?
Courtship.
Negotiation.
Storming.
Maintenance.
140. Analysis suggests that a company could find a strategy that gains market
share for advantage, and that exploits its superior resources and competences.
The organisational culture suggests that it should stick to what it knows best.
What strategy would you suggest?
Diversification.
Retrenchment.
Market penetration
Market development.
141. Analysis suggests that a company's existing markets are saturated. The
company wants to exploit its strategic capabilities in new arenas and satisfy its
stakeholders by making rapid growth. What strategy would you suggest?
Retrenchment.
Market development.
Diversification.
Market penetration.
142. If managers use their judgment when applying the techniques, the criteria
of suitability, acceptability and feasibility will identify the best strategy.
True.
False.
143. What is most often the limitation when assessing return using cost–benefit
analysis?
Difficulty in quantification.
Clear identification of the key stakeholders.
Difficulties in establishing the timescales to be applied.
Identifying objectives of the strategy.
148. Which four of the following are the central tenets of organisational
learning?
Experimentation is the norm.
Employees should be appointed on the basis of their previous educational
success.
Organisations are pluralistic.
Managers facilitate rather than direct.
155. Organisations in complex situations are most likely to succeed if they use:
Strategies that have been successful in the past.
Different processes for different purposes.
Top-down strategic planning.
Different processes for different purposes and different strategy development
roles at different organisational levels.
156. What term is used for the structures, processes and relationships through
which an organisation operates?
The organisational design.
The organisation's culture.
The organisation's configuration.
The organisational paradigm.
157. The speed of change and increased levels of uncertainty in the business
environment have increased. What is the most important result from this for
organisations?
They must become learning organisations.
They must develop into international organisations.
Their structures must become more rigid and stronger.
They must have flexible designs and be skilled at reorganizing.
166. Which three of the following are typical dilemmas in organizing for
success?
Holding the ring versus holistic solutions.
Vertical accountability versus horizontal integration.
Empowering versus best practice.
Centralizing and decentralizing.
169. There are different styles of managing strategic change. Which of the
following are the potential benefits of 'direction' as a change style?
Clarity and speed.
Increasing ownership of a decision or process.
Maintaining control over the change process while also involving people in it.
Overcoming lack of information or misinformation.
170. The style of leading change associated with ‘persuasion' is best described
as:
Personal authority is used to set direction and the means of change.
A strategic leader retains coordination and authority but delegates elements of
the change process.
Gaining support for change by generating understanding and commitment.
Involvement in setting the strategy agenda and resolving strategic issues by
groups.
175. Strategic change levers may be symbolic in nature. Which of the following
do you think is the most powerful symbol?
Behavior of managers.
Changes to systems such as reward, information and control systems.
Use of stories such as newsletters.
Physical changes in the work environment, such as relocations or changes to
office space.
178. Porter's view is that the CEO has a key role as a strategic leader, setting a
disciplined approach to what fits and does not fit the overall strategy. Which of
the following are dangers of this approach?
Non-executive directors gain a greater say in strategic planning.
CEOs can become over-confident and launch strategic initiatives of ever-
increasing ambition.
The CEO 'owns' the strategy and is responsible for its success.
179. Which of the following is claimed to be the main benefit of using the top
management team to carry out strategic planning activities?
Top management teams are often made up of diverse individuals.
They are often appointed by the CEO, so act independently.
They bring additional experience and insight to the CEO.
They can develop a cohesive and consistent approach to decision making.
180. Which of the following is NOT one of the good reasons why a strategic
planner is often recruited from within the organisation?
Participating in strategy provides promising managers with an overview of the
organisation as a whole.
They bring intuitive understanding, networks and credibility to the planning
process.
Participating in strategy provides promising managers with exposure to senior
management.
It introduces new ideas and perspectives on the organisation.
181. Which of the following may decrease the influence of middle managers on
strategy making?
When they have access to an organisation's 'strategic conversation'.
When they have access to organisational networks.
When they are deeply involved in operations.
When they have key organisational positions.
182. Which of the following is not one of the four roles that consultants may
play in strategy development in organisations?
Providing support for top management's views on the organisation's strategic
issues.
Transferring knowledge.
Promoting strategic decisions.
Analyzing, prioritizing and generating options.
183. What is the key finding of the McKinsey & Co. research on who should be
included in strategy making?
Only the most senior managers should be involved.
The people involved should be kept the same to ensure consistency.
The people involved should vary according to the nature of the issue.
Managers at many levels should always be involved.
184. What term is used for the process of winning the attention and support of
top management and other important stakeholders for strategic issues?
Behavioral economics.
Issue packaging.
Strategic workshops.
Strategic issue selling.
185. Senior managers should plan a strategy workshop with an open mind
about what they hope to achieve.
False.
True.
187. It refers to formal and informal rules, regulations and procedures that
complement the company structure.
Strategy.
Systems.
Environment.
All of the above.
190. It enables the strategists to take corrective action at the right time
Implementation control.
Special alert control.
Strategic Surveillance control.
Premise control.
191. Like roots of a tree, ________of organization is hidden from direct view.
Performance.
Strategy.
Core competence.
All of the above.
195. The ________ of any organization is “the aggregate of all conditions, events
and influences that surround and affect it.”
System.
Environment.
Structure.
Strategy.
201. A popular strategy that occurs when two or more companies form a
Temporary partnership for the purpose of capitalizing on some Opportunity is
called a(n):
Merger.
Joint venture.
202. Outsourcing strategies can offer such advantages as -
Increasing a company's ability to strongly differentiate its product and be
successful with either a broad differentiation strategy or a focused
differentiation strategy.
Obtaining higher quality and/or cheaper components or services, improving a
company's ability to innovate and reducing its risk exposure.
Speeding a company's entry into foreign markets.
204. Which of the following is not one of the principal offensive strategy
options?
Leapfrogging competitors by being the first adopter of next- generation
technologies.
Offering an equally good or better product at a lower price.
Blocking the avenues open to challengers.
209. Which one of the following statements about offensive strategies is false?
It often takes the use of successful offensive strategies to build to competitive
advantage.
One situation when a company needs to use offensive strategies is when it has
no choice but to try to whittle away at a strong rival's competitive advantage.
Offensive strategies have much to recommend when a company sees an opening
to gain profitable market share at the expense of rivals.
One of the most potent types of offensive strategy is to introduce new features
or models to fill vacant niches in a company's overall product offering and
thereby better match the product offerings of key rivals.
210. Which one of the following is not a trait of a good strategic offensive?
Trying to build a more cost-efficient supply chain than rivals have.
Being impatient with the status quo and displaying a strong bias for swift,
decisive actions to boost a company's competitive position vis-à-vis rivals.
Applying resources where rivals are least able to defend themselves.
211. Which one of the following is not a good type of rival for an offensive-
minded company to target?
Market leaders that are vulnerable.
Runner-up firms with weaknesses in areas where the challenger is strong.
Small local and regional companies with limited capabilities.
Other offensive-minded companies with a sizable war chest of cash and
marketable securities.
212. Which one of the following statements regarding the basis for offensive
attack on rivals is false?
It is generally wise to use a company's resource strengths to attack rivals in
those competitive areas where they are strong.
Ignoring the need to tie a strategic offensive to a company's strengths is like
going to war with a popgun.
Strategic offensives should, as a general rule, be predicated on leveraging a
company's competitive assets—its core competencies, competitive capabilities
and other resource strengths.
Offensive initiatives aimed at exploiting the competitive weaknesses of rivals
stand a better chance of success than do those that challenge a competitor's
strengths.
Attacking a market leader is always unwise.
217. Which one of the following is not a defensive option for protecting a
company's market share and competitive position?
Adding new features or models and otherwise broadening the product line to
close off vacant niches and gaps to opportunity-seeking challengers.
Thwarting the efforts of rivals to attack with lower prices by maintaining
economy-priced options of its own.
Running comparison ads that call attention to weaknesses in rivals' products.
223. While there are many routes to competitive advantage, they all involve -
Building a brand name image that buyers trust.
Delivering superior value to buyers and building competencies and resource
strengths in performing value chain activities that rivals cannot readily match.
Achieving lower costs than rivals and becoming the industry's sales and market
share leader.
224. The biggest and most important differences among the competitive
strategies of different companies boil down to -
How they go about building a brand name image that buyers trust and whether
they are a risk-taker or risk-avoider.
The different ways that companies try to cope with the five competitive forces.
Whether a company's market target is broad or narrow and whether the company
is pursuing a competitive advantage linked to low cost or differentiation.
225. Which of the following is not one of the five generic types of competitive
strategy?
A low-cost provider strategy.
A broad differentiation strategy.
A best-cost provider strategy.
A focused low-cost provider strategy.
A market share dominator strategy.
230. A low-cost leader can translate its low-cost advantage over rivals into
superior profit performance by -
Cutting its price to levels significantly below the prices of rivals.
Either using its low-cost edge to underprice competitors and attract price
sensitive buyers in large enough numbers to increase total profits or refraining
from price-cutting and using the low-cost advantage to earn a bigger profit
margin on each unit sold.
Going all out to use its cost advantage to capture a dominant share of the market.
231. The major avenues for achieving a cost advantage over rivals include -
Revamping the firm's value chain to eliminate or bypass some cost- producing
activities and/or out-managing rivals in the efficiency with which value chain
activities are performed.
Having a management team that is highly skilled in cutting costs.
Being a first-mover in adopting the latest state-of-the-art technologies,
especially those relating to low-cost manufacture.
234. Which of the following is not one of the ways that a company can achieve
a cost advantage by revamping its value chain?
Cutting out distributors and dealers by selling direct to customers.
Replacing certain value chain activities with faster and cheaper online
technology.
Increasing production capacity and then striving hard to operate at full capacity.
239. Being the overall low-cost provider in an industry has the attractive
advantage of:
Building strong customer loyalty and locking customers into its product
(because customers have such high switching costs).
Giving the firm a very appealing brand image.
Putting a firm in position to compete offensively on the basis of low price, win
the business of price sensitive customers, set the floor on market price and
defend against price war conditions should they arise.
245. Which of the following is not one of the pitfalls of a low-cost provider
strategy?
Overly aggressive price-cutting.
Trying to set the industry's price ceiling.
Not emphasizing avenues of cost advantage that can be kept proprietary or that
relegate rivals to playing catch up.
246. The essence of a broad differentiation strategy is to:
Appeal to the high end part of the market and concentrate on providing a top-of-
the-line product to consumers.
Incorporate a greater number of differentiating features into its product/service
than rivals.
Lower buyer switching costs.
Outspend rivals on advertising and promotion in order to inform and convince
buyers of the value of its differentiating attributes.
Be unique in ways that are valuable and appealing to a wide range of buyers.