105. PGG Mining is making a strategic decision whether to shut down a coal mine in Pennsylvania. It is important to
consider that the decision
a. should be based solely on the results of profit-pool mapping.
b. has ethical implications for organizational stakeholders.
c. need not be socially responsible if the firm is making below-average returns from the mine.
d. All of these choices are important to consider.
106. It is well known that the elected school board of a large city engages in unethical and illegal activities involving the
awarding of major contracts. This behavior has existed for decades, even as the membership in the school board
has changed over time. This behavior reflects
a. the core values of the school board as an organization.
b. a functional, although unethical, culture of the school board.
c. the lack of an organizational mission for the school board.
d. a school board lacking in core competencies.
107. In smaller, new venture firms, returns are sometimes measured in terms of
a. return on assets.
b. return on equity.
c. return on sales.
d. the amount and speed of growth.
108. A ______ is an integrated and coordinated set of commitments and actions designed to exploit core competencies
and gain a competitive advantage.
a. goal
b. strategy
c. tactic
d. mission
109. is an investor‘s uncertainty about the economic gains or losses that will result from a particular investment.
a. Return
b. Reward
c. Risk
d. Revenue
110. The culmination of the strategic management process is
a. performance.
b. strategy implementation.
c. strategy formulation.
d. analysis.
111. Managers must adopt a new mind–set that values
conditions.
a. flexibility
b. innovation
c. speed
d. All of these options are correct.
and the challenges that evolve from constantly changing
112. ______ innovation is a term used to describe how rapidly and consistently new, information-intensive technologies
replace older ones.
a. Perpetual
b. Disruptive
c. Global
d. Diffusion
113. provides the firm with new and up–to–date skill sets, which allow it to adapt to its environment as it
encounters changes.
a. Strategic flexibility
b. Continuous learning
c. Knowledge
d. The Internet
114. The I/O model is grounded in
a. anthropology.
b. psychology.
c. economics.
d. accounting.
115. Firms use both the and models. In fact, these models complement each other in that one focuses
outside the firm while the other focuses inside the firm.
a. industry; capability
b. I/O; resource-based
c. competition; competency
d. industry; competency
116. should establish a firm’s individuality and should be inspiring and relevant to all stakeholders.
a. A strategy
b. A vision
c. A mission
d. A goal
117. William Ackman is a hedge fund manager who owned a large share of J.C. Penney stock. He was also a member
of the Penney board. He tried to get the CEO fired, but the board and top management said he breached his
boardroom duties when he publicly disclosed information on the CEO search and financial condition of the company.
He resigned from the board of directors. This is an example of a contentious relationship between
a. the capital market stakeholders and the organizational stakeholders. b.
the organizational stakeholders and the product market stakeholders. c.
the capital market stakeholders and the product market stakeholders. d.
all the stakeholders.
118. Strategic leaders are
a. located only at the executive level.
b. located in different areas and levels.
c. the CEO, COO, and CFO only.
d. located at different levels, but only in the operating area of the organization.
119. Successful strategic leaders are
a. committed to helping the firm create value for all stakeholder groups.
b. committed to nurturing those around them.
c. decisive.
d. All of these options are correct.
120. Strategic delegation helps
a. overload middle managers.
b. executives control strategy implementation.
c. avoid too much managerial hubris.
d. emphasize profit maximization.
121. Organizational culture refers to
a. the social energy that drives, or fails to drive, the organization.
b. the complex set of ideologies, symbols, and core values that are shared throughout the firm.
c. what people do when no one else is looking.
d. All of these options are correct.
122. Effective strategic leaders
a. are willing to be brutally honest.
b. focus on strategy formation.
c. focus on strategy implementation.
d. focus on innovation.
123. Strategic leaders, , often work long hours, and their work is filled with ambiguous decision situations.
a. at the top of the organization
b. regardless of their location in the organization
c. in the finance area
d. in the operations area
124. If McDonald’s is considering growing potatoes, the step of the profit pool analysis is the one that
a. defines the pool’s boundaries.
b. estimates the pool’s overall size.
c. estimates the size of the value-chain activity in the pool.
d. reconciles the calculations.
125. If Southwest Airlines is considering the consequences of videoconferencing on business travel, it is in the profit pool
analysis step known as
a. defining the pool’s boundaries.
b. estimating the pool’s overall size.
c. estimating the size of the value-chain activity in the pool.
d. reconciling the calculations.
126. SWOT stands for
a. strategy, wealth, organization, and threats.
b. success, weakness, opportunities, and taxes.
c. strength, wealth, organization, and taxes.
d. strengths, weaknesses, opportunities, and threats.
127. In the strategic management process ASP stands for
a. analyses, successes, and purposes.
b. analyses, strategies, and performance.
c. ability, strategies, and purposes.
d. ability, successes, and performance.
128. The firm‘s provide the foundation for choosing one or more ______ and deciding how to implement them.
a. analyses; strengths
b. abilities; strengths
c. analyses; strategies
d. abilities; strategies
129. It is important to emphasize that, primarily because they are related to how a firm interacts with its stakeholders,
almost all strategic management process decisions have
a. ethical dimensions.
b. local dimensions.
c. political dimensions.
d. global dimensions.
130. A company competing in a single product market has
a. one corporate-level strategy.
b. one business-level strategy.
c. one business-level strategy for failure. It should seek to diversify.
d. one business-level strategy and one corporate-level strategy.
131. The strategic management process is
a. a set of activities that will assure a sustainable competitive advantage and above-average returns for the
firm.
b. a decision-making activity concerned with a firm’s internal resources, capabilities, and competencies,
independent of the conditions in its external environment.
c. a process directed by top management with input from other stakeholders that seeks to achieve above-
average returns for investors through effective use of the organization’s resources.
d. the full set of commitments, decisions, and actions required for the firm to achieve above-average returns
and strategic competitiveness.
132. Define strategic competitiveness and above-average returns. What is the relationship between strategic
competitiveness and returns on investment?
133. Hypercompetition is a characteristic of the current competitive landscape. Define hypercompetition and identify its
primary drivers. How can organizations survive in a hypercompetitive environment?
134. Describe the industrial organization (I/O) model of above-average returns. What are its main assumptions? What is
the key to success according to the I/O model?
135. Describe and discuss the resource-based model of above-average returns.
136. What are a firm’s vision and mission? What is the value to the firm of having a specified vision and mission?
137. Describe an organization’s various stakeholders and their different interests. Under what condition can the firm
most easily satisfy all stakeholders? If the firm cannot satisfy all stakeholders, which ones must it satisfy in order to
survive?
138. Who are the firm‘s strategic leaders? How do strategic leaders predict the profit outcomes of different strategic
decisions?
139. Explain the relationship of the strategic management process to organizational ethics.
140. What are the primary aspects of the strategic management process? You may reference specific chapters from the
text in formulating your response.
141. Define globalization and describe some of its consequences.