Crafting and Executing Strategy, 22e (Thompson)
Chapter 2 Charting a Company’s Direction
1) The five basic tasks of the strategy-making, strategy-executing process DO NOT include
A) developing a strategic vision of where the company needs to head and what its future business
makeup will be.
B) strategic management 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) executing the chosen strategy efficiently and effectively.
2) A company’s strategic plan
A) maps out the company’s history.
B) links the company’s financial targets to control mechanisms.
C) outlines the competitive moves and approaches to be used in achieving the desired business
results.
D) focuses on offering a more appealing product than rivals.
E) lists methods of making money in its chosen business.
3) An integral part of the managerial process of crafting and executing strategy includes
A) developing a proven business model.
B) deciding how much of the company’s resources to employ in the pursuit of sustainable
competitive advantage.
C) developing a strategic vision.
D) communicating the company’s values and code of conduct to all employees.
E) deciding on the company’s strategic intent.
4) Integral parts of the managerial process of crafting and executing strategy include
A) developing a strategic vision, strategic management, and crafting a strategy.
B) developing a proven business model, deciding on the company’s strategic intent, and crafting
a strategy.
C) strategic management, 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, strategic management,
choosing what business approaches to employ, selecting a business model, and monitoring
developments.
E) deciding on the company’s strategic intent, setting financial objectives, crafting a strategy, and
choosing what business approaches and operating practices to employ.
5) The strategy-making, strategy-executing process is shaped by
A) management’s strategic vision, strategic and financial objectives, and strategy.
B) the decisions made by the compensation and audit committees of the board of directors.
C) external factors such as the industry’s economic and competitive conditions and internal
factors such as the company’s collection of resources and capabilities.
D) the challenges of developing a sound business model.
E) top executives and the board of directors; very few managers below this level are involved in
the process.
6) When companies adopt the strategy-making and strategy-execution process, it requires they
start by
A) developing a strategic vision, mission, and values.
B) developing a proven business model, deciding on the company’s top management team, and
crafting a strategy.
C) strategic management, developing a business model, crafting a 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 communicating it to all employees,
strategic management, selecting a business model, and monitoring developments and initiating
corrective adjustments to the business model when necessary.
E) deciding on the company’s board of directors, setting financial objectives, crafting a strategy,
and choosing what business approaches and operating practices to employ.
7) A company’s strategic vision concerns
A) management’s storyline of how it intends to make a profit with the chosen strategy “who we
are and what we do.”
B) what future actions the enterprise will likely undertake to outmaneuver rivals and achieve a
sustainable competitive advantage.
C) “who we are and what we do.”
D) a company’s directional path and future product-customer-market-technology focus.
E) why the company does certain things in trying to please its customers.
8) The real purpose of the company’s strategic vision
A) lays out how management plans to implement and execute a profitable business model.
B) describes what business the company is presently in and why it has chosen certain operating
practices to meet the needs of customers.
C) serves as management’s tool for giving the organization a sense of direction.
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.
9) A strategic vision constitutes management’s view and conclusions about the company’s
A) long-term direction and what product-market-customer mix seems optimal.
B) business model and the kind of value that it is trying to deliver to customers.
C) justification of why the business will be a moneymaker.
D) past and present scope of work.
E) long-term plan for outcompeting rivals and achieving a competitive advantage.
10) 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 concrete plan for how the company intends to make money.
11) An unlikely, inaccurate feature of an organization’s strategic vision is
A) providing a panoramic view of “where we are going.”
B) outlining how the company intends to implement and execute its business model.
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) describing the company’s future product-market-customer focus.
12) 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 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.
13) Well-conceived visions are ________ and ________ to a particular organization and they
avoid generic, feel-good statements that could apply to hundreds of organizations.
A) widespread; unique
B) recurring; customary
C) distinctive; specific
D) customary; familiar
E) universal; established
14) What a company’s top executives are saying about where the company is headed long-term
with respect to its future product-market-customer-technology mix
A) indicates what kind of business model the company is going to have in the future.
B) constitutes the strategic vision for the company.
C) signals what the firm’s emergent strategy will be.
D) serves to define the company’s business plan.
E) indicates what kind of products and services the company plans to offer in the future.
15) 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 budgetary 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.
16) The defining characteristic of a well-conceived strategic vision is
A) what it says about the company’s future strategic course—“the direction we are headed and
what our future product-market-customer focus will be.”
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) that it be flexible and operate in the mainstream.
E) that it be within the realm of what the company can reasonably expect to achieve within four
years.
17) When company managers are in the process of thinking strategically about what directional
path should be taken by the company, they are not likely to ask which question?
A) Is the outlook for the company promising if it continues with its present product offerings?
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 strategic course offers attractive opportunity for growth and profitability?
E) What, if any, new customer groups and/or geographic markets should the company get in
position to serve?
18) Company managers are unlikely to consider this question when 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 market opportunities should the company pursue and which ones should not be
pursued?
E) Do we have a better business model than key rivals?
19) Characteristics of an effectively worded strategic vision statement are most likely to include
A) balanced, responsible, and rational.
B) challenging, competitive, and “set in concrete.”
C) graphic, directional, and focused.
D) realistic, customer-focused, and market-driven.
E) achievable, profitable, and ethical.
20) An effectively worded strategic vision statement is not likely to be
A) directional (is forward-looking, describes the strategic course that management has charted
that will help the company prepare for the future).
B) easy to communicate (is explainable in 5-10 minutes, and 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 almost all
stakeholders will enthusiastically support).
E) focused (provides guidance to managers in making decisions and allocating resources).
21) The wording of a company’s vision statement should commonly be
A) vague or incomplete—short on specifics.
B) flexible—adjustable according to changing circumstances.
C) bland or uninspiring—short on inspiration.
D) generic—could apply to almost any company (or at least several others in the same industry).
E) reliant on superlatives (best, most successful, recognized leader, global or worldwide leader,
first choice of customers).
22) Common shortcomings of company vision statements include
A) too specific and too flexible.
B) unrealistic, unconventional, and unbusinesslike.
C) too broad, vague or incomplete, bland/uninspiring, not distinctive, and too reliant on
superlatives.
D) too graphic, too narrow, and too risky.
E) not customer-driven, out of step with emerging technological trends, and too ambitious.
23) Breaking down resistance to a new strategic vision typically requires that management, on an
as needed basis,
A) institute a balance scorecard to measuring company performance, with the balance including
a mixture of both old and new performance measures.
B) inform company personnel about forthcoming changes in the company’s strategy.
C) reiterate the company’s need for the new direction, while addressing employee concerns head-
on, calming fears, lifting spirits, and providing them with updates and progress reports as events
unfold.
D) explain all updates and merits of the company’s business model to align strategy with
employee concerns.
E) raise wages and salaries to win the support of company personnel for the company’s new
direction.
24) An engaging and convincing strategic vision
A) ought to put “who we are and what we are doing” in writing rather than orally so as to leave
no room for company personnel to misinterpret what the strategic vision really is.
B) should be done in language that inspires and motivates company personnel to unite behind
executive efforts to get the company moving in the intended direction.
C) tends to be more effective when top management avoids trying to capture the essence of the
strategic vision in a catchy slogan.
D) is most efficiently and effectively done by posting the strategic vision prominently on the
company’s website and encouraging employees to read it.
E) should be explained after the company’s strategic intent, strategy, and business model have
been conveyed to company personnel.