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| 1 | |
Which one of the following is not an integral part of the managerial process of crafting and executing strategy? |
| | A) | Developing a strategic vision |
| | B) | Choosing a strategic intent |
| | C) | Setting objectives and crafting a strategy to achieve them |
| | D) | Evaluating performance and initiating corrective adjustments in the company's long-term direction, objectives, strategy, or execution in light of actual experience, changing conditions, new ideas, and new opportunities |
| | E) | Implementing and executing the chosen strategy efficiently and effectively |
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| 2 | |
A strategic vision for a company: |
| | A) | involves how fast to pursue the chosen strategy and reach the targeted levels of performance. |
| | B) | consists of thinking through what it will take to make the chosen strategy work as planned. |
| | C) | delineates management's aspirations for the business, providing a panoramic view of "where we are going" and a convincing rationale for why this makes good business sense for the company--a strategic vision thus points an organization in a particular direction and charts a strategic path for it to follow in preparing for the future. |
| | D) | spells out how the company is going to get from where it is now to where it want to go and when it is expected to arrive. |
| | E) | concerns management's view of how to transition the company's business model from where it is now to where it needs to be. |
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| 3 | |
Which of the following is not an important consideration in deciding to commit to one directional path versus another? |
| | A) | Are changes underway in the market and competitive landscape acting to enhance or weaken the company's prospects? |
| | B) | Where should we head in order to prove that our business model is viable and that our strategy is working? |
| | C) | Will the company's present business generate sufficient growth and profitability in the years ahead to please shareholders? |
| | D) | What, if any, new geographic markets and/or customer groups should the company get in position to serve? |
| | E) | What are our ambitions for the company--what industry standing do we want the company to have? |
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| 4 | |
The difference between a company's mission statement and the concept of a strategic vision is that: |
| | A) | the mission statement lays out the desire to make a profit, whereas the strategic vision addresses what strategy the company will employ in trying to make a profit. |
| | B) | a mission statement deals with "where we are headed " whereas a strategic vision provides the critical answer to "how will we get there?" |
| | C) | a mission deals with what a company is trying to do and a vision concerns what a company ought to do. |
| | 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. |
| | E) | a mission is about what to accomplish for shareholders whereas a strategic vision concerns what to accomplish for customers. |
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| 5 | |
Which one of the following is not a characteristic of an effectively-worded strategic vision statement (see Table 2.2, as well as the discussion on page 21)? |
| | A) | Directional (is forward-looking;describes the strategic course that management has charted and the kinds of product-market-customer-technology changes that will help the company prepare for the future) |
| | B) | Concrete and unambiguous (leaves no doubt as to what the company is trying to accomplish for shareholders) |
| | C) | Graphic (paints a clear picture) |
| | D) | Easy to communicate (ideally, explainable in 10 minutes) |
| | E) | Focused and flexible (specific enough to provide managers with guidance in making decisions and allocating resources but stops short of a once-and-for-all-time statement because the strategic path may need to be changed as as market-customer-technology circumstances change) |
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| 6 | |
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? |
| | A) | Incomplete or vague—short on specifics |
| | B) | Too reliant on superlatives (best, most successful, recognized leader, global or worldwide leader, first choice of buyers) |
| | C) | Too broad—so umbrella-like and all-inclusive that the company could head in most any direction, pursue most any opportunity, or enter most any business |
| | D) | Lacking in analysis—based more on managerial emotion and excessive ambition than on what is realistically achievable |
| | E) | Not distinctive—provides no unique company identity; could apply to companies in any of several industries (or at least several rivals operating in the same industry or market arena) |
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| 7 | |
Which of the following statements about a company's values is false? |
| | A) | A company's values are the beliefs, traits, and behavioral norms that company personnel are expected to display in conducting the company's business and pursuing its strategic vision and strategy. |
| | B) | In companies with long-standing values that are deeply entrenched in the corporate culture, senior managers are careful to craft a vision, mission, and strategy that match established values, and they reiterate how the value-based behavioral norms contribute to the company's business success. If the company changes to a different vision or strategy, executives take care to explain how and why the core values continue to be relevant. |
| | C) | A company's core values can relate to such things as fair treatment, integrity, ethical behavior, the emphasis the company will place on innovativeness or top-notch quality or superior customer service, and the company's beliefs in high ethical standards, socially responsible behavior, and giving back to the community. |
| | D) | At companies whose executives take the stated values very seriously, the values are widely adopted by company personnel, are ingrained in the corporate culture, and are mirrored in how company personnel conduct themselves and the company's business on a daily basis. |
| | E) | At all but a few companies, the stated values are mostly window-dressing and serve mainly to embellish the company's public image. |
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| 8 | |
When there's an order of magnitude change in a company's environment that dramatically alters its prospects and mandates radical revision of its strategic course, the company is said to have encountered: |
| | A) | a strategy crossroads. |
| | B) | a strategic inflection point. |
| | C) | a new strategic intent opportunity. |
| | D) | a strategic roadblock that requires a new strategic vision and business model. |
| | E) | a fundamental strategic conflict that usually requires changing either the company's strategic vision or its strategy or maybe even both. |
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| 9 | |
A company's objectives or performance targets: |
| | A) | represent a managerial commitment to achieving specified outcomes and results; they function as yardsticks for tracking the company's progress and performance--well-stated objectives are quantifiable, or measurable, and contain a deadline for achievement. |
| | B) | are typically established after a company decides on a strategic vision and strategy so that they will entail performance targets that truly signal business success. |
| | C) | are best stated in general terms (maximize profits, reduce costs, increase sales) rather than quantifiable terms (increase after-tax profits by 10% in 2 years, grow sales revenues by 20% annually) so that managers will have the latitude to adjust target outcomes to levels that can be achieved. |
| | D) | should place far more emphasis on financial performance targets than strategic performance targets. |
| | E) | All of these. |
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| 10 | |
Which of the following represents the best example of a well-stated strategic objective (as opposed to a well-stated financial objective)? |
| | A) | Achieve revenue growth of 10% annually |
| | B) | Increase market share from 17% to 22% and achieve the lowest overall costs of any producer in the industry, both within three years |
| | C) | Invest more money in R&D to enable the company to offer customers the widest selection of products in the industry |
| | D) | Achieve a AA bond rating within 2 years and an annual cash flow of $500 million |
| | E) | Pay more attention to reducing costs over the next two years |
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| 11 | |
Establishing and achieving strategic objectives merits very high priority on management's agenda because |
| | A) | strategic outcomes provide better benefits to shareholders in both the short-run and the long-run. |
| | B) | a company can't have a shrewd strategic vision without having aggressive and competitively astute strategic objectives. |
| | C) | the surest path to boosting company profitability quarter after quarter and year after year is to relentlessly pursue strategic outcomes that strengthen the company's market position and produce a growing competitive advantage over rivals. |
| | D) | well-chosen strategic objectives help managers craft a good strategy. |
| | E) | a company cannot achieve its strategic intent and strategic vision or gain a competitive advantage over rivals without having and achieving strategic objectives. |
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| 12 | |
Which of the following statements about objectives is false? |
| | A) | A company's managers are well-advised to give the achievement of financial objectives a much higher priority than the achievement of strategic objectives. |
| | B) | Companywide objectives need to be broken down into performance targets for each separate business, product line, functional department, and individual work unit because company performance can't reach full potential without each area of the organization doing its part and contributing directly to the desired companywide outcomes and results. |
| | C) | A "balanced scorecard" for measuring company performance views financial performance measures as lagging indicators that reflect the results of past decisions and organizational activities and views strategic performance measures as leading indicators of a company's future financial performance. |
| | D) | Objectives should be set at high enough levels to stretch an organization to reach its full potential. |
| | E) | The experiences of countless companies and managers teach that precisely spelling out how much of what kind of performance by when and then pressing forward with actions and incentives calculated to help achieve the targeted outcomes greatly improve a company's actual performance. |
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| 13 | |
A balanced scorecard for measuring company performance: |
| | A) | entails balancing the pursuit of good bottom-line profit against the pursuit of non-profit objectives (although achieving profitability targets is nearly always given greater emphasis). |
| | B) | involves putting equal emphasis on the achievement of financial objectives, strategic objectives, and social responsibility objectives. |
| | C) | entails setting both financial and strategic objectives and putting balanced emphasis on their achievement. |
| | D) | helps prevent the pursuit of strategic objectives from dominating the pursuit of financial objectives. |
| | E) | is necessary in order to prevent the drive for achieving financial objectives from weakening the attention paid to social responsibility, community citizenship, and other worthy goals. |
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| 14 | |
A company exhibits strategic intent when: |
| | A) | it pursues its strategic vision. |
| | B) | it relentlessly pursues an ambitious strategic objective and concentrates its full resources and competitive actions on achieving that objective. |
| | C) | it adopts a strategic plan and tries to execute it. |
| | D) | it sets objectives and pursues their achievement. |
| | E) | it crafts a strategy and proceeds to implement it. |
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| 15 | |
The task of crafting a strategy is: |
| | A) | the function and responsibility of a few high-level executives. |
| | B) | more of a collaborative group effort that involves all managers and sometimes key employees striving to arrive at a consensus on what the overall best strategy should be. |
| | C) | the function and responsibility of a company's strategic planning staff. |
| | 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 hierarchy shown in Figure 2.2). |
| | E) | first and foremost the function and responsibility of a company's board of directors. |
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| 16 | |
As per Figure 2.2, the strategy-making hierarchy in a single business company consists of: |
| | A) | business strategy, divisional strategies, and departmental strategies. |
| | B) | business strategy, functional strategies, and operating strategies, whereas in a diversified company it consists of corporate strategy, business strategies (one for each business the diversified company is in), functional strategies, and operating strategies. |
| | C) | business strategy and operating strategy. |
| | D) | managerial strategy, business strategy, and divisional strategies. |
| | E) | corporate strategy, divisional strategies, and departmental strategies (whereas in a diversified company it consists of corporate strategy, divisional strategy and operating strategy). |
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| 17 | |
Functional strategies: |
| | A) | describe the mission and strategic intent of each key functional piece of the business. |
| | B) | concern what to do about resolving the specific strategic issues and operating problems a business confronts in each key part of its business--R&D, production, sales and marketing, finance, information technology, human resources, and so on. |
| | C) | are normally crafted by the executive in charge of the overall business and approved by the company's board of directors. |
| | D) | add relevant detail to the overall business strategy by setting forth the actions, approaches, and practices to be employed in managing particular functions or business processes or key activities within a business--the primary role of a functional strategy is to support the company's overall business strategy and competitive approaches. |
| | E) | are concerned with what competitive capabilities to build in support of the overall company strategy and what to do to unify the firm's skills, competencies, and resource strengths across all the various key pieces of a company's business. |
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| 18 | |
Operating strategies concern: |
| | A) | what a company's various operating departments plan to do to help execute the company's overall strategy. |
| | B) | the strategic intent of each operating unit. |
| | C) | the relatively narrow strategic initiatives and approaches for managing key operating units (plants, distribution centers, geographic units) and specific operating activities with strategic significance (advertising campaigns, the management of specific brands, supply chain-related activities, and website sales and operations)--operating strategies add further detail and completeness to functional strategies and to the overall business strategy. |
| | D) | the specific actions a company's various operating departments plan to take to unify efforts to achieve a sustainable competitive. |
| | E) | what a company will do once its strategic plan is adopted and approved by the company's board of directors. |
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| 19 | |
A company's strategic plan consists of: |
| | A) | the actions and market maneuvers it plans to use to achieve a sustainable competitive advantage. |
| | B) | management's vision of where the company is headed, the established financial and strategic objectives, and management's strategy to achieve the objectives and move the company along the chosen strategic path. |
| | C) | a company's strategic vision, strategic objectives, strategic intent, and strategy. |
| | D) | an organization's strategy and management's specific, detailed plans for implementing it. |
| | E) | the specific actions management intends to take in detouring strategic inflection points and executing its overall strategy. |
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| 20 | |
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. |
| | B) | Overseeing the company's financial accounting and financial reporting practices. |
| | C) | Evaluating the caliber of senior executives' strategy-making/strategy-executing skills. |
| | D) | Being inquiring critics and exercising strong oversight over the company's direction, strategy, and business approaches. |
| | E) | Instituting a compensation plan for top executives that rewards them for actions and results that serve stakeholders' interests, most especially those of shareholders. |
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