60) The faster a company’s business environment is changing, the more critical it becomes for its
managers to
A) pay attention to early warnings of future change and be willing to experiment to establish a
market position in the future.
B) determine whether the company has a balanced scorecard for judging its performance.
C) establish controls to monitor the impact of external changes appropriately and ensure the
internal environment is maintained.
D) replicate and implement only those strategies that have worked for rivals.
E) determine what changes should be made to its customer value proposition.
61) Why should long-run objectives take precedence over short-run objectives?
A) The focus is placed on improving performance in the long term.
B) Long-run objectives are necessary for achieving long-term performance and stand as a barrier
to undue focus on short-term results.
C) Long-run objectives will satisfy shareholder expectations for progress.
D) Long-run objectives will force the company to deliver performance improvement in the
current period.
E) Long-run objectives will keep the company in line with its balanced scorecard.
62) Financial objectives generally are not concerned with
A) receiving a bond rating of AA or higher.
B) achieving a return on equity greater than 10 percent.
C) increasing revenues at a pace greater than the rate of inflation.
D) raising earnings per share by 2 percent.
E) achieving a market share of 9 percent.
63) Strategic objectives normally would not include?
A) Introducing five new products over the next 10 years.
B) Reducing product development time by one third to half the current rate of 24 months.
C) Improving teamwork across business units by doubling the number of intracompany projects.
D) Boosting internal cash flows by 7 percent to fund new research and development activities.
E) Improving security and stability of information technology capabilities to prevent breaches
and outages.
64) Strategy-making is
A) primarily the responsibility of key executives rather than a task for a company’s entire
management team.
B) more of a collaborative group effort that involves all managers and sometimes key
employees, as opposed to being the function and responsibility of a few high-level executives.
C) first and foremost the function and responsibility of a company’s strategic planning staff.
D) first and foremost the function and responsibility of a company’s board of directors.
E) first and foremost the function of a company’s chief executive officer, who formulates
strategic initiatives and submits them to the board of directors for approval.
65) The task of crafting a company’s strategy would not normally be described as which of the
following?
A) In most companies, crafting strategy is a team effort, involving managers and often key
employees at many organization levels.
B) Ultimate responsibility for leading the strategy-making task rests with the chief executive
officer.
C) The task of crafting strategy is best done by a company’s chief strategic planning officer, who
should report directly to the company’s CEO and board of directors.
D) It is the responsibility and duty of a company’s board of directors to ensure that new strategy
proposals can be defended as superior to alternatives and, ultimately, to approve or disapprove of
the strategy formulated and proposed by the company’s management.
E) In most of today’s companies, every company manager has a strategy-making role, ranging
from major to minor, for his or her area of responsibility.
66) Managerial jobs with strategy-making responsibility
A) extend throughout the managerial ranks and exist in every part of a company—business units,
operating divisions, functional departments, manufacturing plants, and sales districts.
B) are primarily located in the strategic planning departments of large corporations.
C) are relatively rare because most strategy making is done by the members of a company’s
board of directors.
D) seldom exist within a functional department (e.g., marketing and sales) or in an operating unit
(a plant or a district office) because these levels of the organization structure are well below the
level where strategic decisions are typically made.
E) are found only at the vice-president level and above in most companies.
67) Crafting a company’s strategy is best described as
A) the exclusive province of top management—owner-entrepreneurs, CEOs, and other very
senior executives.
B) delegation of considerable strategy-making authority to down-the-line managers in charge of
particular subsidiaries, product lines, geographic sales offices, and plants in companies that are
diversified geographically or by product/market.
C) involving the board of directors in the lead role in crafting a company’s strategy.
D) being assumed by an elite group of corporate entrepreneurs.
E) always the product of brilliant corporate entrepreneurs.
68) A company’s overall strategy
A) determines whether its strategic intent is proactive or reactive.
B) is subject to being changed much less frequently than either its objectives or its mission
statement and thus serves as the base of its strategy-making pyramid.
C) should be based on a flexible strategic vision and strategic intent.
D) is customarily reviewed and approved level-by-level by the company board of directors.
E) is really a collection of strategic initiatives and actions devised by managers and key
employees up and down the whole organizational hierarchy.
69) In a diversified company, the strategy-making hierarchy consists of
A) corporate strategy and a group of business strategies (one for each line of business the
corporation has diversified into).
B) corporate or managerial strategy, a set of business strategies, and divisional strategies within
each business.
C) business strategies, functional strategies, and operating strategies.
D) corporate strategy, business strategies, functional strategies, and operating strategies.
E) its diversification strategy, its line of business strategies, and its operating strategies.
70) Corporate strategy for a diversified or multibusiness enterprise
A) is orchestrated by mid-level managers and focuses on how to create a competitive advantage
in each specific line of business the total enterprise is in.
B) concerns how best to allocate resources across the departments of each line of business the
company is in.
C) is orchestrated by senior corporate executives and centers around the kinds of initiatives the
company uses to establish business positions in different industries.
D) deals chiefly with what the strategic intent of each of its business units should be.
E) involves how functional strategies should be aligned with business strategies in each of the
various lines of business the company is in.
71) Business strategy concerns
A) strengthening the market position and building competitive advantage for a single line of
business.
B) ensuring consistency in strategic approach among the businesses of a diversified company.
C) selecting a model for a single line of business to use in pursuing objectives that contribute to
the whole of a diversified company.
D) selecting a set of stretch financial and strategic objectives for a single business unit.
E) choosing the most appropriate strategic intent for a specific line of business.
72) Business strategy, as distinct from corporate strategy, is chiefly concerned with
A) deciding what new businesses to enter, which existing businesses to get out of, and which
existing business to remain in.
B) deciding how to build competitive advantage and improve performance in a particular line of
business.
C) making sure the strategic intent of a particular business is in step with the company’s overall
strategic intent and strategy.
D) coordinating the competitive approaches of a company’s different business units.
E) what business model to employ in each of the company’s different businesses.
73) Functional-area strategies
A) concern the actions, approaches, and practices to be employed in managing particular
functions within a business.
B) specify what actions a company should take to resolve specific strategic issues and problems.
C) are normally crafted by operating-level managers.
D) are concerned with how to unify the firm’s several different operating strategies into a
cohesive whole.
E) are normally crafted by the company’s CEO and other senior executives.
74) The primary role of a functional strategy is to
A) unify the company’s various operating-level strategies.
B) specify how to build and strengthen the skills, expertise, and competencies needed to execute
operating-level strategies successfully.
C) support and add power to the corporate-level strategy.
D) create compatible degrees of strategic intent among a company’s different business functions.
E) determine how to support particular activities in ways that support the overall business
strategy and competitive approach.
75) Operating strategies are primarily concerned with
A) what the firm’s operating departments are doing and plan to do to unify the company’s
functional and business strategies.
B) the specific plans for building competitive advantage in each major department and operating
unit.
C) how to manage initiatives of strategic significance within each functional area, and adding
detail and completeness in ways that support functional strategies and the overall business
strategy.
D) how best to carry out the company’s corporate strategy.
E) how best to implement and execute the company’s different business-level strategies.
76) In a single-business company, the strategy-making hierarchy consists of
A) business strategy, divisional strategies, and departmental strategies.
B) business strategy, 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.
77) A company’s strategic plan
A) details key objectives and the strategy for achieving them.
B) lays out its future direction and business purpose, performance targets, and strategy.
C) identifies the company’s strategy and management’s specific, detailed plans for
implementation.
D) consists of a company’s strategic vision, strategic objectives, strategic intent, and strategy.
E) summarizes the company’s strategic vision, a strategy, and a business model.
78) Among the principal managerial tasks associated with managing the strategy execution
process, strategic managers would be most unlikely to
A) ensure that policies and procedures facilitate rather than impede effective execution
B) create a company culture and work climate conducive to successful strategy implementation
and execution
C) survey employees for their opinions about how to implement strategies for cost reductions
and improvements in employee morale and job satisfaction
D) exert the internal leadership needed to drive implementation forward and keep improving on
how the strategy is being executed
E) motivate people and link rewards and incentives directly to the achievement of performance
objectives and good strategy execution
79) Managing the strategy-execution process involves
A) describing the strategic course that will help the company prepare for the future.
B) organizing the company along the lines of best practice.
C) surveying employees on how they think costs can be reduced and how employee morale and
job satisfaction can be improved.
D) exerting the external leadership needed to drive stabilization.
E) tying rewards and incentives directly to profit.
80) Management is obligated to monitor new external developments, evaluate the company’s
progress, and make corrective adjustments in order to
A) determine whether the company has a balanced scorecard for judging its performance.
B) stay on track in achieving the company’s mission and strategic vision.
C) keep the company’s board of directors well-informed about the company’s future outlook.
D) determine whether the company’s business model is well-matched to changing market and
competitive circumstances.
E) decide whether to continue or change the company’s strategic vision, objectives, strategy
and/or strategy execution methods.
81) The leadership challenges that top executives face in making corrective adjustments when
things are not going well include
A) knowing when to replace poorly performing subordinates and when to do a better job of
coaching them to do the right things.
B) being able to discern whether to promote better achievement of strategic performance targets
or whether to promote better achievement of financial performance targets.
C) deciding when adjustments are needed and what adjustments to make.
D) having the analytic skills to separate the problems due to a bad strategy from the problems
due to bad strategy execution.
E) deciding whether the company would be better off making adjustments that curtail the
achievement of strategic objectives or that curtail the achievement of financial objectives.
82) The task of top executives when the company faces disruptive changes in its environment is
to not only raise questions about the appropriateness of its direction and strategy, but also to
A) know when to continue with the present corporate culture and when to shift to a different and
better corporate culture.
B) figure out the causes and decide when adjustments are needed and what adjustments are
needed for improved performance and operating excellence.
C) figure out whether to arrive at decisions quickly or slowly in choosing among the various
alternative adjustments.
D) decide whether to try to fix the problems of poor strategy execution or simply shift to a
strategy that is easier to execute correctly.
E) decide how to identify the problems that need fixing.
83) Equifax, a credit-reporting agency, disclosed that it had suffered a massive data breach
affecting as many as 143 million people. Hackers had gained unauthorized access to sensitive
personal data—Social Security numbers, birth dates, and home addresses—for nearly half of the
United States. The company also faced multiple federal investigations including hearings at the
U.S. Congress over its handling of the hack and reports that its executives had sold an unusual
amount of stock before the breach was publicly disclosed. Effective corporate governance
requires Equifax’s board of directors to
A) play the lead role in forming the company’s strategy and then directly supervise the efforts
and actions of senior executives in implementing and executing the strategy.
B) provide guidance and counsel to the CEO in carrying out his/her duties as chief strategist and
chief strategy implementer.
C) strengthen its oversight of the company’s strategic direction, evaluate the caliber of senior
executives’ skills, handle executive compensation, and oversee financial reporting practices.
D) work closely with the CEO, senior executives, and the strategic planning staff to develop a
strategic plan for the company and then oversee how well the CEO and senior executives carry
out the board’s directives in implementing and executing the strategic plan.
E) review and approve the company’s business model and also review and approve the proposals
and recommendations of the CEO as to how to execute the business model.
84) The key duties of a company’s board of directors in the strategy-making, strategy-executing
process include
A) coming up with compelling strategy proposals of their own to debate against those put
forward by top management.
B) overseeing the company’s financial accounting and financial reporting practices and
evaluating the caliber of senior executives’ strategy-making/strategy-executing skills.
C) taking the lead in developing the company’s business model and strategic vision.
D) taking the lead in formulating the company’s strategic plan but then delegating the task of
implementing and executing the strategic plan to the company’s CEO and other senior
executives.
E) approving the company’s operating strategies, functional-area strategies, business strategy,
and overall corporate strategy.
85) The chief duties/responsibilities of a company’s board of directors, with respect to strategy-
making and strategy execution, are not concerned with
A) hiring and firing senior-level executives and working with the company’s chief strategic
planning officer to improve the company’s strategy when performance comes up short of
expectations.
B) being inquiring critics and exercising strong oversight over the company’s direction, strategy,
and business approaches.
C) evaluating the caliber of senior executives’ strategy-making/strategy-executing skills.
D) instituting a compensation plan for top executives that rewards them for actions and results
that serve stakeholders’ interests, most especially those of shareholders.
E) overseeing the company’s financial accounting and financial reporting practices.
86) Every corporation should have a strong independent board of directors that does all of the
following except
A) remain well-informed about the company’s performance and exercises its fiduciary duty to
protect shareholders responsibly.
B) guide management in choosing a strategic direction and makes independent judgments about
the validity and wisdom of management’s proposed strategic actions.
C) evaluate the leadership skills of the CEO and other senior executives.
D) retain sufficient courage to curb management actions deemed inappropriate or unduly risky.
E) take responsibility for leading the strategy-making, strategy-executing process.
87) Corporate governance failures at Volkswagen included all of the following except
A) a unique ownership structure where a single family, Porsche, controlled more than 50 percent
of voting shares.
B) a strong independent board of directors that was responsible for making independent
judgments about the validity and wisdom of management’s proposed strategic actions.
C) inadequate monitoring of the CEO and other senior executives.
D) elevating management to the supervisory board even though they had presided over past
scandals.
E) unwillingness of the board of directors to accept any responsibility for the allowing use of
“defeat devices” on at least 11 million vehicles with diesel engines.
88) Strategic objectives for lululemon inc. do not include
A) exploring new concepts such as stores that are tailored to each community.
B) continuing to expand the brand globally through international expansion.
C) increasing total comparable sales, which includes comparable store sales and direct to
consumer.
D) building a robust digital ecosystem with key investments in customer relationship
management, analytics, and capabilities to elevate guest experience across all touch points.
E) improving employee job satisfaction.