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Chapter 2: The Managerial Process of Crafting and Executing Strategy
Multiple Choice Questions
What Does the Strategy-Making, Strategy-Executing Process Entail?
1. Which one of the following is not one of the five basic tasks of the strategy-making, strategy-
executing process?
A) Forming a strategic vision of where the company needs to head and what its future business
make-up will be
B) Setting objectives to convert the strategic vision into specific strategic and financial
performance outcomes for the company to achieve
C) Crafting a strategy to achieve the objectives and get the company where it wants to go
D) Developing a profitable business model
E) Implementing and executing the chosen strategy efficiently and effectively
Answer: D Difficulty: Easy
2. Which of the following is an integral part of the managerial process of crafting and executing
strategy?
A) Developing a proven business model
B) Setting objectives and using them as yardsticks for measuring the company’s performance
and progress
C) Deciding how much of the company’s resources to employ in the pursuit of sustainable
competitive advantage
D) Communicating the company’s mission and purpose to all employees
E) Deciding on the company’s strategic intent
Answer: B Difficulty: Medium
3. Which of the following are integral parts of the managerial process of crafting and executing
strategy?
A) Developing a strategic vision, setting objectives, and crafting a strategy
B) Developing a proven business model, deciding on the company’s strategic intent, and crafting
a strategy
C) Setting objectives, crafting a strategy, implementing and executing the chosen strategy, and
deciding how much of the company’s resources to employ in the pursuit of sustainable
competitive advantage
D) Coming up with a statement of the company’s mission and purpose and communicating it to
all employees, setting objectives, choosing what business approaches and operating practices
to employ, selecting a business model, and monitoring developments and initiating corrective
adjustments
E) Deciding on the company’s strategic intent, setting financial objectives, crafting a strategy,
and choosing what business approaches and operating practices to employ
Answer: A Difficulty: Medium
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4. The strategy-making, strategy-executing process
A) is usually delegated to members of a company’s board of directors so as not to infringe on the
time of busy executives.
B) includes establishing a company’s mission, developing a business model aimed at making the
company an industry leader, and crafting a strategy to implement and execute the business
model.
C) embraces the tasks of developing a strategic vision, setting objectives, crafting a strategy,
implementing and executing the strategy, and then monitoring developments and initiating
corrective adjustments in light of experience, changing conditions, new ideas, and new
opportunities.
D) is principally concerned with sizing up an organization’s internal and external situation, so as
to be prepared for the challenge of developing a sound business model.
E) is primarily the responsibility of top executives and the board of directors; very few
managers below this level are involved.
Answer: C Difficulty: Medium
Developing a Strategic Vision
5. A company’s strategic vision concerns
A) a company’s directional path and future product-market-customer-technology focus.
B) why the company does certain things in trying to please its customers.
C) management’s storyline of how it intends to make a profit with the chosen strategy.
D) “who we are and what we do.”
E) what future actions the enterprise will likely undertake to outmaneuver rivals and achieve a
sustainable competitive advantage.
Answer: A Difficulty: Easy
6. A company’s strategic vision
A) is management’s story line for how it plans to implement and execute a profitable business
model.
B) sets forth what business the company is presently in and why it uses particular operating
practices in trying to please customers.
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.
D) defines “who we are and what we do.”
E) spells out a company’s strategic intent, its strategic and financial objectives, and the business
approaches and operating practices that will underpin its efforts to achieve sustainable
competitive advantage.
Answer: C Difficulty: Medium
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7. Developing a strategic vision for a company entails
A) prescribing a strategic direction for the company to pursue and a rationale for why this
strategic path makes good business sense.
B) describing its business model and the kind of value that it is trying to deliver to customers.
C) putting together a story line of why the business will be a moneymaker.
D) describing “who we are and what we do.”
E) coming up with a long-term plan for outcompeting rivals and achieving a competitive
advantage.
Answer: A Difficulty: Easy
8. The managerial task of developing a strategic vision for a company
A) concerns deciding what approach the company should take to implement and execute its
business model.
B) entails coming up with a fairly specific answer to “who are we, what do we do, and why are
we here?”
C) is chiefly concerned with addressing what a company needs to do to successfully outcompete
rivals in the marketplace.
D) involves deciding upon what strategic course a company should pursue in preparing for the
future and why this directional path makes good business sense.
E) entails coming up with a persuasive storyline of how the company intends to make money.
Answer: D Difficulty: Medium
9. Which one of the following is not an accurate attribute of an organization’s strategic vision?
A) Providing a panoramic view of “where we are going”
B) Describing the company’s future product-market-customer-technology focus
C) Pointing an organization in a particular direction and charting a strategic path for it to follow
D) Helping mold an organization’s character and identity
E) Outlining how the company intends to implement and execute its business model
Answer: E Difficulty: Medium
10. Management’s strategic vision for an organization
A) charts a strategic course for the organization (“where we are going”) and provides a rationale
for why this directional path makes good sense.
B) describes in fairly specific terms the organization’s strategic intent, strategic objectives, and
strategy.
C) spells out how the company will become a big moneymaker and boost shareholder value.
D) addresses the critical issue of “why our business model needs to change and how we plan to
change it.”
E) spells out the organization’s strategic intent and the actions and moves that will be
undertaken to achieve it.
Answer: A Difficulty: Medium
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11. What a company’s top executives are saying about where the company is headed and about what
the company’s future product-customer-market-technology will be
A) indicates what kind of business model the company is going to have in the future.
B) constitutes their strategic vision for the company.
C) signals what the firm’s strategy will be.
D) serves to define the company’s mission.
E) indicates what the company’s long-term strategic plan is.
Answer: B Difficulty: Easy
12. One of the important benefits of a well-conceived and well-stated strategic vision is to
A) clearly delineate how the company’s business model will be implemented and executed.
B) clearly communicate management’s aspirations for the company to stakeholders and help
steer the energies of company personnel in a common direction.
C) set forth the firm’s strategic objectives in clear and fairly precise terms.
D) help create a “balanced scorecard” approach to objective-setting and not stretch the
company’s resources too thin across different products, technologies, and geographic
markets.
E) indicate what kind of sustainable competitive advantage the company will try to create in the
course of becoming the industry leader.
Answer: B Difficulty: Medium
13. The defining characteristic of a well-conceived strategic vision is
A) that it be flexible and in the mainstream.
B) that it not stretch the company’s resources too thin across different products, technologies,
and geographic markets.
C) clarity and specificity about “who we are, what we do, and why we are here.”
D) what it says about the company’s future strategic course—“the direction we are headed and
what our future product-market-customer-technology focus will be.”
E) that it be within the realm of what the company can reasonably expect to achieve within 2-4
years.
Answer: D Difficulty: Medium
14. Which one of the following questions is not pertinent to company managers in thinking
strategically about their company’s directional path and developing a strategic vision?
A) Is the outlook for the company promising if it continues with its present product-market-
technology-customer focus?
B) Are changing market and competitive conditions acting to enhance or weaken the company’s
prospects?
C) What business approaches and operating practices should we consider in trying to implement
and execute our business model?
D) What are our ambitions for the company—what industry standing do we want the company
to have?
E) What, if any, new customer groups and/or geographic markets should the company get in
position to serve?
Answer: C Difficulty: Medium
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15. Which one of the following questions is not something that company managers should consider in
choosing to pursue one strategic course or directional path versus another?
A) Are changing market and competitive conditions acting to enhance or weaken the company’s
business outlook?
B) Is the company stretching its resources too thinly by trying to compete in too many markets
or segments, some of which are unprofitable?
C) Will our present business generate sufficient growth and profitability in the years ahead to
please shareholders?
D) What emerging market opportunities should the company pursue and which ones should not
be pursued?
E) Do we have a better business model than key rivals?
Answer: E Difficulty: Medium
16. Which of the following are characteristics of an effectively-worded strategic vision statement?
A) Graphic, directional, and focused
B) Challenging, competitive, and “set in concrete”
C) Balanced, responsible, and rational
D) Realistic, customer-focused, and market-driven
E) Achievable, profitable, and ethical
Answer: A Difficulty: Medium
17. Which one of the following is not a characteristic of an effectively-worded strategic vision
statement?
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) Easy to communicate (is explainable in 10-15 minutes, can be reduced to a memorable
slogan)
C) Graphic (paints a picture of the kind of company management is trying to create and the
market position(s) the company is striving to stake out)
D) Consensus-driven (commits the company to a “mainstream” directional path that most all
stakeholders will enthusiastically support)
E) Focused (is specific enough to provide guidance to managers in making decisions and
allocating resources)
Answer: D Difficulty: Medium
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18. Which of the following is not a common shortcoming of company vision statements?
A) Vague or incomplete—short on specifics
B) Too narrow—doesn’t leave enough room for future growth
C) Bland or uninspiring
D) Not distinctive—could apply to most any company (or at least several others in the same
industry)
E) Too reliant on superlatives (best, most successful, recognized leader, global or worldwide
leader, first choice of customers)
Answer: B Difficulty: Medium
19. Which of the following are common shortcomings of company vision statements?
A) Too broad, vague or incomplete, bland/uninspiring, not distinctive, and too reliant on
superlatives
B) Unrealistic, unconventional, and un-businesslike
C) Too specific, too inflexible, and can’t be achieved in 5 years
D) Too broad, too narrow, and too risky
E) Not customer-driven, out-of–step with emerging technological trends, and too ambitious
Answer: A Difficulty: Medium
A Strategic Vision Covers Different Ground than a Mission Statement
20. A company’s mission statement typically addresses which of the following questions?
A) “Who are we and what do we do?”
B) “What objectives and level of performance do we want to achieve?”
C) “Where are we going and what should our strategy be?”
D) “What approach should we take to achieve sustainable competitive advantage?”
E) “What business model should we employ to achieve our objectives and our vision?”
Answer: A Difficulty: Easy
21. The difference between the concept of a company mission statement and the concept of a
strategic vision is that
A) a mission statement typically concerns a company’s present business scope (“who we are and
what we do”) whereas the principal concern of a strategic vision is with the company’s long
term direction and future product-market-customer-technology focus.
B) the mission is to make a profit, whereas a strategic vision concerns what business model to
employ in striving to make a profit.
C) a mission statement deals with what to accomplish on behalf of shareholders and a strategic
vision concerns what to accomplish on behalf of customers.
D) a mission concerns what to do to achieve short-run objectives and a strategic vision concerns
what to do to achieve long-run performance targets.
E) a mission statement deals with “where we are headed ” whereas a strategic vision provides
the critical answer to “how will we get there?”
Answer: A Difficulty: Medium
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22. The difference between a company’s mission statement and the concept of a strategic vision is
that
A) the mission explains why it is essential to make a profit, whereas the strategic vision explains
how the company will be a moneymaker.
B) a mission statement typically concerns a company’s present business scope and purpose
whereas a strategic vision sets forth “where we are going and why.”
C) a mission deals with how to please customers whereas a strategic vision deals with how to
please shareholders.
D) a mission statement deals with “where we are headed ” whereas a strategic vision provides
the critical answer to “how will we get there?”
E) a mission statement addresses “how we are trying to make a profit today” while a strategic
vision concerns “how will we make money in the markets of tomorrow?”
Answer: B Difficulty: Medium
Communicating the Strategic Vision
23. Top management efforts to communicate the strategic vision to company personnel
A) ought to be done in writing rather than orally so as to leave no room for company personnel
to misinterpret what the strategic vision really is.
