1.

Which one of the following is not a characteristic of an effectively worded strategic vision statement
(see Table 2.2)?

B. Concrete and unambiguous (leaves no doubt as to what the company is trying to accomplish for
shareholders).

2. Which one of the following is not among the chief duties/responsibilities of a company's board of
directors insofar as the strategy-making, strategy-executing process is concerned?

A. Directing senior executives as to what the company's long-term direction, objectives, business model,
and strategy should be and, further, closely supervising senior executives in their efforts to implement
and execute the strategy.

A company's objectives are best stated in general terms (maximize profits, reduce costs, increase sales)
rather than quantifiable terms (increase after-tax profits by 10 percent in two years, grow sales
revenues by 20 percent annually) so that managers will have the latitude to adjust target outcomes to
levels that can be achieved.

A. True

Which of the following is not an element of a company's business strategy?

E. Adhering to abandoned strategy elements.

The difference between a company's mission statement and the concept of a strategic vision is that
________________

D. a mission statement typically concerns an enterprise's present business scope and purpose —"who
we are, what we do, and why we are here" — whereas the focus of a strategic vision is on the direction
the company is headed and what its future product-customer-market-technology focus will be.

According to both the text discussion and the summary in Table 2.3, which of the following is not a
common shortcoming of company vision statements?

D. Lacking in analysis—based more on managerial emotion and excessive ambition than on what is
realistically achievable.

Operating strategies concern ________________.

C. the relatively narrow strategic initiatives and approaches for managing key operating units (plants,
distribution centers, geographic units) and specific operating activities (the management of specific
brands, supply chain-related activities, and website sales and operations).

A company achieves sustainable competitive advantage when ________________

D. an attractively large number of buyers develop a durable preference for its products or services over
the offerings of competitors, despite the efforts of competitors to overcome or erode its advantage.
Every corporation should have a strong, independent board of directors that ________________

E. All of these.

A balanced scorecard for measuring company performance is necessary to prevent the drive for
achieving financial objectives from weakening the attention paid to social responsibility, community
citizenship, and other worthy goals.

B. False

A strategic vision for a company consists of thinking through what it will take to make the chosen
strategy work as planned.

B. False
A strategic vision for a company ________________

C. describes "where we are going" by delineating the course and direction management has charted for
the company's future product-customer-market-technology focus.

A company's objectives ________________

A. convert the strategic vision into specific performance targets—well-stated objectives are quantifiable,
or measurable, and contain a deadline for achievement.

Functional strategies ________________

D. add detail to the overall business strategy and specify what resources and organizational capabilities
are needed to put the business strategy into action.
The task of crafting a strategy is ________________

D. a job for a company's whole management team—senior executives plus the managers of business
units, operating divisions, functional departments, manufacturing plants, and sales districts (as per the

Strategy making is the responsibility of a company's chief executive officer and outside consultants.

B. False

A balanced scorecard for measuring company performance involves putting equal emphasis on the
achievement of financial objectives, strategic objectives, and social responsibility objectives.

B. False
A viable business model ________________

A. sets forth how both strategy and operating approaches will create value for customers, and
simultaneously generate ample revenues to cover costs to realize a profit.

A strategic vision for a company describes "where we are going" by delineating the course and direction
management has charted for the company's future product-customer-market-technology focus.

A. True

Company strategies evolve because ________________

D. of changing circumstances and ongoing management efforts to improve the strategy.

Company objectives should be set in a manner that does not conflict with the performance targets of
lower-level organizational units.

B. False
A strategic vision for a company involves how fast to pursue the chosen strategy and reach the targeted
levels of performance.

B. False

Management is obligated to monitor new external developments, evaluate the company's progress, and
make corrective adjustments in order to ________________

A. decide whether to continue or change the company's strategic vision, objectives, strategy and/or
strategy execution methods.

Which of the following is not one of the most frequently used strategic approaches to building
competitive advantage?

A. Sticking with an outdated business model.

The heart and soul of any strategy _______________

B. is the actions and moves to gain a competitive edge over rivals in the marketplace.
A company's strategic plan consists of a company's strategic vision, strategic objectives, strategic intent,
and strategy.

B. False

A company's strategic plan consists of management's vision mapping out where a company is headed,
the company's financial and strategic objectives, and management's strategy to achieve the objectives
and move the company along the chosen strategic path.

A. True

A winning strategy is one that ________________

D. fits the company's internal and external situation, builds sustainable competitive advantage, and
boosts company performance.

A strategic vision for a company concerns management's view of how to transition the company's
business model from where it is now to where it needs to be.

B. False
Which of the following questions ought to be used to distinguish a winning strategy from a mediocre or
losing strategy?

B. Is the strategy well matched to the company's situation, helping the company achieve a sustainable
competitive advantage, and resulting in better company performance?

The strategy-making hierarchy in a single business company consists of ________________

B. business strategy, functional area strategies, and operating strategies.

Nothing affects a company's ultimate success or failure more fundamentally than ________________

D. how well its management team charts direction, develops effective strategic moves, and pursues
daily operating excellence.
A company's objectives convert the strategic vision into specific performance targets—well-stated
objectives are quantifiable, or measurable, and contain a deadline for achievement.

A. True

A company's strategic plan consists of the actions and market maneuvers it plans to use to achieve a
sustainable competitive advantage.

A. True

A company's business model ________________

C. (1) specifies a customer value proposition, and (2) develops a profit formula.

Which one of the following is not related to actions and approaches that comprise a company's
strategy?

A. Proving to shareholders that the company's business model is viable.

Which of the following is not among the principal managerial tasks associated with managing the
strategy execution process? Which of the following is not among the principal managerial tasks
associated with managing the strategy execution process?

D. Engaging the services of staffing firms to maintain the company's personnel data.

Accounting scandals that led to investigations of such well-known companies as AOL Time Warner,
Global Crossing, Enron, Qwest Communications, and WorldCom resulted in the conviction of a number
of corporate executives and the passage of the Sarbanes-Oxley Act of 2002. In these cases, the board of
directors did not fulfill which of the following important obligations?

E. Oversee the company's financial accounting and financial reporting practices.

A balanced scorecard for measuring company performance entails balancing the pursuit of good
bottom-line profit against the pursuit of nonprofit objectives (although achieving profitability targets is
nearly always given greater emphasis).

B. False
Company objectives ________________

A. need to be broken down into performance targets for each of its separate businesses, product lines,
functional departments, and individual work units.