(Test Bank) Strategic Management: Text and Cases

Dess,Mcnamara,Eisner, 9

Business

Test Bank

9th Edition

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Author(s): Dess, Mcnamara, Eisner

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Strategic Management: Text and Cases, 9e (Dess) Chapter 1 Strategic Management: Creating Competitive Advantages 1) Lands' End's failure under the leadership of Ms. Frederica Marchionni was said to be a direct result of the quality of her leadership. According to the text, this would be an example of the "romantic" perspective of leadership. Answer: TRUE Explanation: In the romantic view of leadership, the implicit assumption is that the leader is the key force in determining an organization's success or lack thereof. Under Ms. Marchionni's leadership, the company reported a 19.5-million-dollar loss for 2016 after having reported a 73.8-million-dollar profit for the previous year under its previous CEO. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-01 The definition of strategic management and its four key attributes. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 2) Strategic management consists of the analyses, decisions, and actions an organization undertakes in order to create and sustain competitive advantages. Answer: TRUE Explanation: According to the textbook, this is the definition of strategic management. Difficulty: 1 Easy Topic: Strategy and the Strategic Management Process Learning Objective: 01-01 The definition of strategic management and its four key attributes. Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 3) Management innovations such as total quality, just-in-time, benchmarking, business process reengineering, and outsourcing are important but not enough for building sustainable competitive advantage. Answer: TRUE Explanation: Sustainable competitive advantage cannot be achieved through operational effectiveness alone. Popular management innovations of the last two decades like total quality, just-in-time, benchmarking, business process reengineering, and outsourcing are concerned with operational effectiveness. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-01 The definition of strategic management and its four key attributes. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 4) Trade-off decisions between effectiveness and efficiency are important in the practice of strategic management. Answer: TRUE Explanation: The fourth attribute of strategic management is that it involves the recognition of trade-offs between effectiveness and efficiency. Some authors have referred to this as the difference between doing the right thing (effectiveness) and doing things right (efficiency). Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-01 The definition of strategic management and its four key attributes. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 5) According to Henry Mintzberg, a management scholar, most firms do not realize their original intended strategy. Answer: TRUE Explanation: Henry Mintzberg states that the intended strategy rarely survives in its original form. Unforeseen environmental developments, unanticipated resource constraints, or changes in managerial preferences may result in at least some parts of the intended strategy remaining unrealized. On the other hand, good managers will want to take advantage of a new opportunity presented by the environment, even if it was not part of the original set of intentions. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-02 The strategic management process and its three interrelated and principal activities. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 6) The final realized strategy of a firm is a combination of deliberate and time-tested strategies only. Answer: FALSE Explanation: Realized strategy is that strategy of a firm in which organizational decisions are determined by both analysis and unforeseen environmental developments, unanticipated resource constraints, and/or changes in managerial preferences. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-02 The strategic management process and its three interrelated and principal activities. Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation7) Strategy analysis is the study of only the big picture external environments of the firm. Answer: FALSE Explanation: Strategy analysis is the study of the external and internal environments of a firm, and their fit with organizational vision and goals. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-02 The strategic management process and its three interrelated and principal activities. Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation 8) All successful firms compete and outperform their rivals by developing bases for competitive advantage, which can be achieved only through cost leadership. Answer: FALSE Explanation: Successful firms strive to develop bases for competitive advantage, which can be achieved through cost leadership and/or differentiation as well as by focusing on a narrow or industrywide market segment. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-02 The strategic management process and its three interrelated and principal activities. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 9) The three primary participants in corporate governance are: (1) the shareholders, (2) the management (led by the chief executive officer), and (3) the employees. Answer: FALSE Explanation: The primary participants are: (1) the shareholders, (2) the management (led by the chief executive officer), and (3) the board of directors. Difficulty: 2 Medium Topic: Corporate Governance Learning Objective: 01-03 The strategic role of corporate governance and stakeholder management, as well as how "symbiosis" can be achieved among an organization's stakeholders. Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation10) Decisions by boards of directors are always consistent with shareholder interests. Answer: FALSE Explanation: The board of directors (BOD) are the elected representatives of the shareholders, charged with ensuring that the interests and motives of management are aligned with those of the owners (i.e., shareholders). Recent scandals have resulted in criticism and cynicism that the BOD fulfills this charge. Difficulty: 2 Medium Topic: Corporate Governance Learning Objective: 01-03 The strategic role of corporate governance and stakeholder management, as well as how "symbiosis" can be achieved among an organization's stakeholders. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 11) Ensuring effective corporate governance requires an effective and engaged board of directors, uninvolved shareholders, and proper managerial rewards and incentives. Answer: FALSE Explanation: We focus on three important mechanisms to ensure effective corporate governance: (1) an effective and engaged board of directors, (2) shareholder activism, and (3) proper managerial rewards and incentives. Difficulty: 2 Medium Topic: Corporate Governance Learning Objective: 01-03 The strategic role of corporate governance and stakeholder management, as well as how "symbiosis" can be achieved among an organization's stakeholders. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 12) Social responsibility is the idea that organizations are only accountable to stockholders. Answer: FALSE Explanation: Social responsibility is the expectation that businesses or individuals will strive to improve the overall welfare of society. From the perspective of a business, this means that managers must take active steps to make society better by virtue of the business being in existence. Difficulty: 2 Medium Topic: Corporate Social Responsibility and Sustainability Learning Objective: 01-04 The importance of social responsibility, including environmental sustainability, and how it can enhance a corporation's innovation strategy. Bloom's: Analyze AACSB: Analytical Thinking Accessibility: Keyboard Navigation13) Shell, NEC, and Procter and Gamble have been measuring their performance according to what has been called a triple bottom line. This technique involves an assessment of financial, social, and environmental performance. Answer: TRUE Explanation: Many companies are now measuring what has been called a triple bottom line. This involves assessing financial, social, and environmental performance. Shell, NEC, Procter and Gamble, and others have recognized that failing to account for the environmental and social costs of doing business poses risks to the company and its community. Difficulty: 2 Medium Topic: Corporate Social Responsibility and Sustainability Learning Objective: 01-04 The importance of social responsibility, including environmental sustainability, and how it can enhance a corporation's innovation strategy. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 14) Sustainability is being increasingly recognized as a source of cost efficiencies and revenue growth. Answer: TRUE Explanation: A CEO survey on sustainability by Accenture debunks the notion that sustainability and profitability are mutually exclusive corporate goals. The study found that sustainability is being increasingly recognized as a source of cost efficiencies and revenue growth. In many companies, sustainability activities have led to increases in revenue and profits. Difficulty: 2 Medium Topic: Corporate Social Responsibility and Sustainability Learning Objective: 01-04 The importance of social responsibility, including environmental sustainability, and how it can enhance a corporation's innovation strategy. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation15) Strategic management requires managers at all levels of the organization to take a segregated view of the organization. Answer: FALSE Explanation: Strategic management requires managers to take an integrative view of the organization and assess how all of the functional areas and activities fit together to help an organization achieve its goals and objectives. This cannot be accomplished if only the top managers in the organization take an integrative, strategic perspective of issues facing the firm, and everyone else fends for themselves in their independent, isolated functional areas. Instead, people throughout the organization must strive toward overall goals. Difficulty: 1 Easy Topic: Value of Strategic Leadership Learning Objective: 01-05 The need for greater empowerment throughout the organization. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 16) The strategic management process should be addressed only by top-level executives. Mid- level and low-level employees are best equipped to implement the strategies of the organization. Answer: FALSE Explanation: To develop and mobilize people and other assets, leaders are needed throughout the organization. No longer can organizations be effective if the top level does the thinking, and the rest of the organization does the work. Everyone must be involved in the strategic management process. Difficulty: 2 Medium Topic: Value of Strategic Leadership Learning Objective: 01-05 The need for greater empowerment throughout the organization. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation17) Richard Branson, the founder of the Virgin Group, is well known for creating an inclusive organizational structure in which anybody in the organization can be involved in generating and acting on new business ideas. Answer: TRUE Explanation: Richard Branson, founder of the Virgin Group, whose core businesses include retail operations, hotels, communications, and an airline, is well known for creating a culture and an informal structure where anybody in the organization can be involved in generating and acting on new business ideas. Difficulty: 2 Medium Topic: Value of Strategic Leadership Learning Objective: 01-05 The need for greater empowerment throughout the organization. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 18) The vision of an organization is at the top level of its hierarchy of organizational goals. The vision statement should be massively inspiring, overarching, and long term. Answer: TRUE Explanation: A vision is a goal that is massively inspiring, overarching, and long term. Difficulty: 2 Medium Topic: The Roles of Vision, Mission, and Values in the Strategic Management Process Learning Objective: 01-06 How awareness of a hierarchy of strategic goals can help an organization achieve coherence in strategic decisions. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 19) Much research has supported the notion that individuals work much harder when they are asked to do their best rather than when they are striving toward a specific goal. Answer: FALSE Explanation: Challenging objectives can help to motivate and inspire employees to higher levels of commitment and effort. Much research has supported the notion that people work harder when they are striving toward specific goals instead of being asked simply to do their best. Difficulty: 2 Medium Topic: The Roles of Vision, Mission, and Values in the Strategic Management Process Learning Objective: 01-06 How awareness of a hierarchy of strategic goals can help an organization achieve coherence in strategic decisions. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation20) An idealistic vision can arouse employee enthusiasm and therefore is a good vision. Answer: FALSE Explanation: An idealistic vision can arouse employee enthusiasm. However, that same enthusiasm can be quickly dashed if employees find that senior management behavior is not consistent with the vision. Difficulty: 2 Medium Topic: The Roles of Vision, Mission, and Values in the Strategic Management Process Learning Objective: 01-06 How awareness of a hierarchy of strategic goals can help an organization achieve coherence in strategic decisions. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 21) The text addresses two perspectives of leadership as well as their implications. These two perspectives are A) romantic and unromantic. B) romantic and internal control. C) external control and unromantic. D) romantic and external control. Answer: D Explanation: The two perspectives of leadership are the romantic and the external control perspectives. Difficulty: 1 Easy Topic: Strategy and the Strategic Management Process Learning Objective: 01-01 The definition of strategic management and its four key attributes. Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation22) Ms. Frederica Marchionni became CEO of Land's End in February 2015 when the company showed a 73.8 million-dollar profit. By mid-June of 2016, the company had lost 27.2 million dollars. What went wrong? A) The new leadership did not understand the corporate culture and image. B) The marketplace liked the new image. C) The founder undermined the new CEO in her ability to bring about change. D) The new goals and objectives were coherent with the company mission statement. Answer: A Explanation: Ms. Marchionni's leadership style worked at her previous jobs in Ferrari and Dolce and Gabbana. This style did not meet the outdoorsy, casual clothes feel of the Lands' End customer. She chose to work in New York City with office perks such as private bathrooms, resulting in a misfit with the Land's End culture. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-01 The definition of strategic management and its four key attributes. Bloom's: Analyze AACSB: Analytical Thinking Accessibility: Keyboard Navigation 23) A CEO made a lot of mistakes in assessing the market and the competitive conditions and improperly redesigning the organization into numerous business units. Such errors led to significant performance declines. According to the text, this example illustrates the ________ perspective of leadership. A) external control B) romantic C) internal mechanism D) operational Answer: B Explanation: In the romantic view of leadership, the implicit assumption is that the leader is the key force in determining the success (or lack of success) of an organization. This view dominates the popular press in business magazines such as Fortune, BusinessWeek, and Forbes, wherein the CEO is either lauded for the success of the firm or chided for its demise. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-01 The definition of strategic management and its four key attributes. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation24) According to the external control view of leadership, which of the following factors would not be considered an external factor that might positively or negatively affect a firm's success? A) economic downturns B) governmental legislation C) outbreak of war D) company employee morale Answer: D Explanation: In the external control view of leadership, external factors are responsible for positively or negatively affecting company success. These external factors often are unanticipated and are not due to the company's leadership. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-01 The definition of strategic management and its four key attributes. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 25) According to the text, the strategic management process entails three ongoing processes. They are A) analyses, actions, and synthesis. B) analyses, decisions, and actions. C) analyses, evaluation, and critique. D) analyses, synthesis, and decisions. Answer: B Explanation: The strategic management of an organization entails three ongoing processes: analyses, decisions, and actions. Difficulty: 1 Easy Topic: Strategy and the Strategic Management Process Learning Objective: 01-01 The definition of strategic management and its four key attributes. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation26) Management innovations such as total quality, benchmarking, and business process reengineering cannot lead to sustainable competitive advantage because A) companies that have implemented these techniques have lost money. B) there is no proof that these techniques work. C) they cost too much money and effort to implement. D) every company is trying to implement them. Answer: D Explanation: The popular management innovations of the last two decades (total quality, just-in- time, benchmarking, business process reengineering and outsourcing) are all about operational effectiveness. Each of these is important, but none leads to sustainable competitive advantage because everyone is doing them. Strategy is all about being different. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-01 The definition of strategic management and its four key attributes. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 27) The organizational versus the individual rationality perspective suggests that objectives that are A) good for a functional area are always good for the overall organization. B) good for the overall organization are always best for a functional area. C) best for a functional area may not be best for the overall organization. D) best for one functional area will never be best for all functional areas. Answer: C Explanation: Strategic management is directed toward overall organizational goals and objectives. Effort must be directed at what is best for the total organization, not just a single functional area. Some authors have referred to this perspective as organizational versus individual rationality. What might look rational or ideal for one functional area, such as operations, may not be in the best interest of the overall firm. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-01 The definition of strategic management and its four key attributes. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation28) The four key attributes of strategic management include the idea that strategy must A) be directed toward overall organizational goals and objectives. B) be focused only on long-term objectives. C) be focused on only one specific area of an organization. D) focus only on competitor strengths. Answer: A Explanation: The key attributes of strategic management are that it directs the organization toward overall goals and objectives, includes multiple stakeholders in decision making, needs to incorporate short-term and long-term perspectives, and recognizes trade-offs between efficiency and effectiveness. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-01 The definition of strategic management and its four key attributes. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 29) The four key attributes of strategic management include all of the following except A) including multiple stakeholder interests in decision making. B) incorporating both short-term and long-term perspectives. C) recognizing the trade-offs between effectiveness and efficiency. D) emphasis on the attainment of short-term objectives. Answer: D Explanation: The key attributes of strategic management are that it directs the organization toward overall goals and objectives, includes multiple stakeholders in decision making, needs to incorporate short-term and long-term perspectives, and recognizes trade-offs between efficiency and effectiveness. Difficulty: 1 Easy Topic: Strategy and the Strategic Management Process Learning Objective: 01-01 The definition of strategic management and its four key attributes. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation30) Effectiveness is often defined as A) doing things right. B) stakeholder satisfaction. C) doing the right thing. D) productivity enhancement. Answer: C Explanation: Effectiveness is tailoring actions to the needs of an organization rather than wasting effort, or doing the right thing. Difficulty: 1 Easy Topic: Strategy and the Strategic Management Process Learning Objective: 01-01 The definition of strategic management and its four key attributes. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 31) In choosing to focus on stakeholders, which of the following will not lead to success for a manager? A) shareholders and employees B) employees and suppliers C) customers and the community at large D) customers only Answer: D Explanation: Stakeholders are those individuals, groups, and organizations that have a stake in the success of the organization, including owners (shareholders in a publicly held corporation), employees, customers, suppliers, the community at large, and so on. Managers will not be successful if they focus on a single stakeholder. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-01 The definition of strategic management and its four key attributes. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard NavigationDownloaded by: GradeA | clintonwamalwawanjala@gmail.com Distribution of this document is illegalStuvia.com - The Marketplace to Buy and Sell your Study Material 32) In strategic management, both the short-term and long-term perspectives need to be considered because A) shareholder value is only measured by short-term returns. B) shareholders only care about long-term returns. C) long-term vision precludes the analysis of present operating needs. D) the creative tension between the two forces managers to develop more successful strategy. Answer: D Explanation: Strategic management requires incorporating both short-term and long-term perspectives. Peter Senge, a leading strategic management author, has referred to this need as a creative tension. That is, managers must maintain both a vision for the future of the organization and a focus on its present operating needs. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-01 The definition of strategic management and its four key attributes. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 33) Strategic management involves the recognition of trade-offs between effectiveness and A) cost. B) value. C) return on investment. D) efficiency. Answer: D Explanation: Strategic management involves the recognition of trade-offs between effectiveness and efficiency. Some authors have referred to this as the difference between doing the right thing (effectiveness) and doing things right (efficiency). Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-01 The definition of strategic management and its four key attributes. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard NavigationStuvia.com - The Marketplace to Buy and Sell your Study Material Downloaded by: GradeA | clintonwamalwawanjala@gmail.com Distribution of this document is illegal