Well-stated objectives are:
A. quantifiable or measurable, and contain deadlines for achievement.
B. succinct and concise so as to identify the company’s risk and return options.
C. broad and take into account views of all the stakeholders.
D. directly related to the dividend payout ratio for stockholder returns.
E. representative of customers’ aspirations for company performance.
To which of the following firms is the term “repeatedly evolving strategy” MOST
applicable?
A. A government agency that makes plans for a set period of time and implements them
phase by phase through the tenure
B. A mobile company, established in a saturated market, that aims at quarterly release of
new products
C. A new cosmetics manufacturer in a market that replicates the products of a
competitor at a moderate quality and lower price
D. A nationalized bank that lends at a lower interest rate but a zero processing fee in a
market crowded with privatized banks running at high cost
E. A firearms regulatory agency, set up by the government, that publishes industry
standards for safety, reliability, and quality of arms and ammunition
Briefly define each of the following terms.
a. Sustainable competitive advantage
b. Deliberate strategy
c. Emergent strategy
d. Realized strategy
e. Abandoned strategy
A company’s ability to marshal adequate resources in support of new strategic
initiatives and steer them to the appropriate organizational units is important to the
strategy execution process because:
A. changes in strategy often require resource reallocation, and organizational units need
the proper funding to carry out their part of the strategic plan effectively and efficiently.
B. accurate budgets are the key to exercising tight financial controls over what
organization units can and cannot do in carrying out management’s directives to execute
the chosen strategy proficiently.
C. tight budget control is management’s most powerful tool for first-rate strategy
execution.
D. lean, carefully managed budgets protect the company’s financial condition and
eliminate the wasteful use of cash.
E. lean, strictly enforced budgets are management’s best and most used means of getting
organizational units to exercise the fiscal discipline needed to execute the chosen
strategy in a cost-efficient manner.
The difference between a resource and a capability is:
A. a resource is a productive input or competitive asset, whereas a capability is the
capacity of the firm to perform some internal activity competently.
B. a resource is a reserve supply or back-up supply function, whereas a capability is the
ability to manage the resource function.
C. a resource is a mechanism used for carrying out some responsibility, whereas a
capability possesses the ability to monitor the resource
D. a resource represents the firm’s fixed assets, whereas a capability defines whether the
firm is competent to perform some function with these assets.
E. a resource represents the firm’s human assets, whereas a capability defines the skills
and knowledge of these human resources.
Which of the following topics would least likely be contained in a company’s statement
of its core values?
A. A commitment to having fun and creating a fun work environment
B. A commitment to operating excellence and superior results
C. Mandating full compliance with all laws and regulations
D. Exhibiting such qualities as integrity, fairness, trustworthiness, pride of
workmanship, respect for co-workers, and ethical behavior
E. Exhibiting teamwork and cooperative attitudes
A company that successfully and methodically applies Six Sigma methods to its value
chain, activity by activity, can:
A. clearly consider what it will take to overtake rivals with the industry’s overall best
strategy.
B. make major strides in improving the proficiency with which its strategy is executed
without sacrificing innovation.
C. increase its bargaining power with suppliers and create better seller-supplier
collaborations.
D. assess the extent to which rivals have competitively valuable competencies or
capabilities.
E. construct a business model that entails a value proposition based on quality.
The task of stitching together a strategy:
A. entails addressing a series of hows: how to grow the business, how to please
customers, how to outcompete rivals, how to respond to changing market conditions,
and how to achieve strategic and financial objectives.
B. is primarily an exercise in deciding which of several freshly emerging market
opportunities to pursue.
C. is mainly an exercise that should be dictated by what is comfortable to management
from a risk perspective and what is acceptable in terms of capital requirements.
D. requires trying to copy the strategies of industry leaders as closely as possible.E. is
mainly an exercise in good planning.
Entering into strategic alliances and collaborative partnerships can be competitively
valuable because:
A. working closely with outsiders is essential in developing new technologies and new
products in virtually every industry.
B. cooperative arrangements with other companies are very helpful in racing against
rivals to build a strong global presence and/or racing to seize opportunities on the
frontiers of advancing technology.
C. they represent highly effective ways to achieve low-cost leadership and capture
first-mover advantages.
D. they are a powerful way for companies to build loyalty and goodwill among
customers with diverse needs and expectations.
E. they are quite effective in helping a company transfer the risks of threatening
external developments to other companies.
In adaptive corporate cultures:
A. the prevailing view is that the best way to look out for the interests of employees is
to change core values and cultural norms in whatever ways are needed to fit the
changing requirements of an evolving strategy.
B. company personnel are amenable to changing policies and operating practices as
long as the core elements of the company’s strategic vision and strategy remain intact.
C. members are willing to embrace a proactive approach to trying new ideas, altering
operating practices, and changing pieces of the strategy provided it doesn’t imperil their
job security, entail cuts in compensation, or require different work practices.
D. there’s a spirit of doing what’s necessary to ensure long-term organizational success
provided that core values and business principles are not compromised and provided
top management undertakes the changes in a manner that exhibits genuine concern for
the legitimate interests of stakeholders.
E. there is little need for policies and procedures because group members willingly
accept experimentation and innovation.
Success with a best-cost provider strategy designed to outcompete high-end
differentiators requires:
A. achieving significantly lower costs in providing the upscale features.
B. providing significantly better product attributes in order to justify a price above what
low-cost leaders are charging.
C. matching the company’s resources and capabilities to a low-cost provider status.
D. motivating buyers to purchase upscale features that match rivals.
E. achieving the lowest costs in the industry.
Which of the following questions can be used to distinguish a winning strategy from a
mediocre or losing strategy?
A. How good is the company’s business model?
B. Is the company a technology leader?
C. Does the company have low prices in comparison to rivals?
D. Is the company putting too little emphasis on behaving in an ethical and socially
responsible manner?
E. How well does the strategy fit the company’s situation?
In crafting a company’s strategy, managers:
A. face the biggest challenge of how closely to replicate strategies of successful
companies in the industry.
B. have comparatively little freedom in choosing the “how’s” of strategy.
C. are wise not to decide on concrete courses of action in order to preserve maximum
strategic flexibility.
D. need to come up with a sustainable competitive advantage that draws in customers
and produces a competitive edge over rivals.
E. are well-advised to be risk-averse and develop a “conservative”
strategy-“dare-to-be-different” strategies are rarely successful.
The school of ethical relativism holds that:
A. what constitutes ethical or unethical conduct should be determined by the religious
convictions of each society or each culture within a country.
B. when there are cross-country or cross-cultural differences in what is deemed ethical
or unethical in business situations, it is appropriate for local moral standards to take
precedence over what the ethical standards may be elsewhere.
C. concepts of right and wrong are always governed by business norms in each country,
culture, or society.
D. concepts of right and wrong are always a function of each individual’s own set of
values, beliefs, and ethical convictions.
E. concepts of right and wrong as they apply to business behavior are always absolute
and usually more stringent than universal ethical principles.
It is ideal for key management slots to be filled from outside:
A. in turnaround and rapid-growth situations.
B. when problems with the old strategy are obvious.
C. in a worst-case scenario.
D. when the managerial whole is greater than the sum of individual efforts.
E. in a centralized structure.
An industry contains one strategic group when all sellers:
A. are subject to the same driving forces.
B. place about the same emphasis on various distribution channels.
C. use the same key success factors to differentiate their products.
D. pursue essentially identical strategies and have similar market positions.
E. pursue varying distribution channels and product attributes, and have customer
service attributes that differentiate them in the marketplace.
The strength of the beliefs underlying ethical universalism is that:
A. ethical universalism recognizes significant variation in basic moral standards
according to local cultural beliefs, local religious beliefs, and social mores.
B. ethical standards are objectively determined by religious and moral experts.
C. what is deemed right or wrong, fair or unfair, moral or immoral, ethical or unethical
is (or should be) grounded in religious doctrine and applied strictly to all business
situations.
D. it draws upon the collective views of multiple societies and cultures to put some
clear boundaries on what constitutes ethical business behavior and what constitutes
unethical business behavior no matter what country or culture a company is operating
in.
E. it leaves room for thinking that concepts of right and wrong can be varying shades of
gray.
An environmental sustainability strategy consists of a company’s deliberate actions to:
A. operate in an honorable manner, provide good working conditions for employees,
and to actively work to enhance the quality of life in the local communities where it
operates and in society at large.
B. meet the current needs of customers, suppliers, shareholders, employees, and other
stakeholders in a manner that protects the environment, provides for the longevity of
natural resources, maintains ecological support systems for future generations, and
guards against ultimate endangerment of the planet.
C. protect and enhance natural resources and ecological support systems, taking into
account the current consumption for the current generation.
D. apply universal norms regarding the protection of the environment to its everyday
operations and to function below the levels required by prevailing environmental
regulations.
E. balance commonly held views about what constitutes environmentally appropriate
actions against its ability to make a profit.
A weaker U.S. dollar is an economically favorable exchange-rate shift for
manufacturing plants based in the United States.
A. This is a true statement.
B. No, the U.S. dollar must be stronger.
C. Yes, because it provides for a weakened foreign demand for U.S.-made goods.
D. Yes, because it makes such plants less cost competitive with foreign plants.
E. Yes, because it provides incentives of foreign companies to locate manufacturing
facilities in the U.S. to make goods for U.S. consumers.
The first principle in designing an effective compensation system and the most
dependable way to keep people focused on strategy execution and the achievement of
performance targets is to:
A. establish ethical compensation policies and convince employees that they are the
firm’s most valuable competitive asset.
B. design monetary and nonmonetary incentives that boost labor productivity and help
lower the firm’s overall labor costs.
C. generously reward and recognize people who meet or beat performance targets and
to deny rewards and recognition to those who don’t.
D. pay employees a bonus for each strategic and financial objective that the company
achieves.
E. allow employees to propose what rewards they would like to receive to achieve the
company’s stretch objectives.
Identify five factors that tend to intensify competitive rivalry among an industry’s
member firms.
Why are well-conceived CSR strategies and sustainable business practices considered
in the best long-term interest of shareholders?
Apart from “the business of business is business, not ethics” kind of thinking, there are
three other primary factors that contribute to a drive toward unethical business behavior.
Identify and explain the three factors.
An established organization is fast losing its market share to companies that offer
similar products and are upgrading their capabilities to produce better products. List a
few general actions and approaches that would help the organization revive its position.
In doing driving-forces analysis, is it sufficient to simply identify the driving forces that
are operating to alter industry and competitive conditions? Why or why not? If not, then
explain what else is required for a complete driving-forces assessment.
Describe the strategy of striving to be the industry’s overall low-cost provider. What
does a company have to do to achieve low-cost provider status?
Explain how environmental sustainability strategies go about improving a company’s
“Triple-P” performance-people, planet, and profit. Why is it important for
strategy-makers to find points of intersection between society and the company’s ability
to execute value chain activities or better serve customer needs?
Identify and briefly discuss each of the three tests for determining whether
diversification into a new business is likely to build shareholder value.