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.
Answer:
Which of the following is NOT a benefit of prescribing policies and operating
procedures to aid management’s task of implementing strategy?
A. Placing limits on independent action and helping overcome resistance to change
B. Providing top-down guidance to operating managers, supervisory personnel, and
employees regarding how things need to be done and what behavior is expected
C. Promoting the creation of a work climate that facilitates good strategy execution
D. Helping build employee commitment to adopting best practices and using the tools
of TQM and Six Sigma
E. Helping enforce consistency of effort in how particular activities are performed in
geographically scattered organization units
Answer:
Which of the following is NOT integral to superior strategy execution and operating
excellence?
A. Having real-time information systems that permit company managers to stay on top
of implementation initiatives and daily operations and to intervene if things seem to be
drifting off course
B. Having state-of-the-art operating systems, information systems, and real-time data
C. Having access to online systems that provide statistical information about operating
activities
D. Having the systems capability to identify and diagnose problems, so as to take
corrective actions
E. Having access to employee data of competitors
Answer:
Which of the following ways are employed by defending companies to fend off a
competitive attack?
A. Remain steadfast to current product features and models to ensure resources are not
diverted toward unproductive efforts.
B. Exclude volume discounts or better financing terms from the strategic response in
order to maintain current profitability levels.
C. Gain product line exclusivity to force competitors to use other distributors.
D. Trimming the length of warranties to save money.
E. Stay away from competitor’s clients since their loyalty will not allow them to switch.
Answer:
When a company’s culture is out of sync with what is needed for strategic success and
good strategy execution:
A. the strategy has to be changed to fit the culture as rapidly as possible.
B. the company’s strategic vision, strategic intent, and strategy have to be adjusted to
better reflect ingrained core values and cultural norms.
C. management needs to go on the offensive to reinterpret the culture and explain to
company personnel why there really is good overall cultural fit with the strategy.
D. the culture has to be changed to accommodate the requirements of good strategy
execution as rapidly as can be managed.
E. management must urge the company to participate in an all-out effort to create a
different portfolio of competencies and capabilities that will permit the strategy to be
changed in ways that will fit the culture.
Answer:
When evaluating whether an industry’s environment presents a company with an
above-average profitability and an attractive business opportunity, it primarily involves:
A. determining the industry outlook for future profitability.
B. determining which firms in the industry have a competitive advantage and how they
got their advantage.
C. determining the overall strength of the five competitive forces.
D. constructing a strategic group map and assessing the attractiveness of the
competitive position of each strategic group to determine the overall attractiveness of
all the strategic groups.
E. using value chain analysis to determine the relative cost positions of rival firms and
to learn who the industry’s low-cost producer is.
Answer:
A company’s stated core values and ethical principles are:
A. important because of their role in ensuring that company executives will not engage
in unethical behavior or behave in a manner that is contrary to the company’s core
values.
B. typically tightly linked to its strategic vision and strategy.
C. the best indicators of a company’s social responsibility strategy.
D. meant to foster a work climate where company personnel share common and
strongly held convictions about how the company’s business is to be conducted and
provide guidance in displaying the core values in their actions and behaviors.
E. strictly enforced in strong culture companies and weakly enforced in weak culture
companies.
Answer:
In which of the following cases are late-mover advantages (or first-mover
disadvantages) NOT likely to arise?
A. When the costs of pioneering are much higher than being a follower and only
negligible learning/experience benefits accrue to the pioneer
B. When the marketplace is skeptical about the benefits of a new technology or product
being pioneered by a first-mover
C. When the pioneer’s products are somewhat primitive and are easily bested by late
movers
D. When opportunities exist for a blue-ocean strategy to invent a new industry or
distinctive market segment that creates altogether new demand
E. When technological change is rapid and fast-following rivals find it easy to leapfrog
the pioneer with next-generation products of their own
Answer:
Which of the following is NOT a risk of cross-border alliances between domestic and
foreign firms?
A. Overcoming language and cultural barriers
B. Launching new initiatives to stay abreast of shifting market conditions
C. Developing mutually agreeable ways of dealing with key issues or differences
D. Disengaging from the alliance once its purpose has been served
E. Becoming overly dependent on foreign partners for essential expertise
Answer:
Identifying and assessing a company’s resource strengths and weaknesses and its
external opportunities and threats is called:
A. a SWOT analysis.
B. a competitive asset/liability analysis.
C. a competitive positioning analysis.
D. a strategic resource assessment.
E. a company resource mapping.
Answer:
A primary drawback of a global strategy is that it:
A. allows firms to address local needs as precisely as locally based rivals can.
B. permits firms to be more responsive to changes in local market conditions, either in
the form of new opportunities or competitive threats.
C. provides for lower transportation costs and also may involve higher tariffs.
D. involves higher coordination costs due to more complex tasks of managing a
globally integrated enterprise.
E. raises production costs due to the greater variety of designs and components.
Answer:
The two culture-building roles of a company’s stated values and ethical standards are to:
A. communicate the company’s good intentions and establish a corporate conscience.
B. confirm the integrity of company personnel and signal the above-board nature of the
company’s business principles and operating methods.
C. steer company personnel toward doing the right thing and convince outsiders that the
company is socially responsible.
D. foster a work climate where company personnel share common and strongly held
convictions about how the company’s business is to be conducted and to provide them
with guidance about how to do their jobs, steering them toward both doing things right
and doing the right things.
E. provide a basis for designing culture-supportive incentive compensation plans and
reinforcing the appropriateness of particular ethical and moral actions.
Answer:
Factors that cause the rivalry among competing sellers to be weaker include:
A. low buyer switching costs.
B. low fixed costs or storage costs.
C. many industry rivals of roughly equal size and competitive strength.
D. weakly differentiated products among rival sellers.
E. slow growth in buyer demand.
Answer:
A computer chip manufacturing giant decides to outsource its operations to a new
geographical location with cheaper labor amidst ongoing labor strikes in a few of its
existing locations (due to proposed job cuts). This draws criticism in its new market and
affects its current market position and productivity. Which of the following would be an
appropriate reactive (emergent) strategy while moving forward?
A. Hiring and training new talent to begin operations in the emerging market
B. Acquiring a local computer chip marketing and distribution specialist firm in the new
location
C. Cancelling the idea of outsourcing and retaining the existing the workforce to run
operations
D. Shifting the existing workforce to the new geographical location and paying them
according to new standards
E. Cancelling the job cuts till the market situation and entry operations stabilize
Answer:
A company’s strategy and its quest for competitive advantage are tightly connected
because:
A. without a competitive advantage a company cannot become the industry leader.
B. without a competitive advantage a company cannot have a profitable business
model.
C. crafting a strategy that yields a competitive advantage over rivals is a company’s
most reliable means of achieving above-average profitability and financial
performance.
D. a competitive advantage is what enables a company to achieve its strategic
objectives.
E. how a company goes about trying to please customers and outcompete rivals is what
enables senior managers to choose an appropriate strategic vision for the company.
Answer:
A strategy of vertical integration can have both important strengths and weaknesses
depending on all of the following, EXCEPT:
A. whether it can limit the performance of strategy-critical activities in ways that
increase cost, build expertise, protect proprietary know-how, or increase differentiation.
B. the impact on investment costs, flexibility, and response times.
C. the administrative costs of coordinating operations across more vertical chain
activities.
D. how difficult it will be for the company to acquire the set of skills and capabilities
needed to operate in another stage of the vertical chain.
E. whether competitors outsource any of their value chain activities.
Answer:
The character of a company’s corporate culture is a product of all of the following
EXCEPT:
A. the shared values and core business principles and beliefs that management preaches
and practices.
B. its standards of what is ethically acceptable and what is not and the stories that get
told over and over to illustrate and reinforce the company’s shared values, business
practices, and traditions.
C. the company’s approach to people management and the “chemistry” and
“personality” that permeates its work environment.
D. the work practices and behaviors that define “how we do things around here.”
E. its lack of mechanisms for aligning, constraining, and regulating the actions,
decisions, and behaviors of company personnel.
Answer:
Rivalry among competing sellers increases:
A. when buyer demand is growing slowly.
B. as it becomes more costly for buyers to switch brands.
C. as the products of rival sellers become more strongly differentiated.
D. when there is underproduction relative to demand..
E. as the number of competitors decreases.
Answer:
The most difficult part of benchmarking is:
A. the decision of whether to do it at all.
B. how to gain access to information regarding rivals’ practices and costs.
C. when to initiate the process.
D. what information to utilize in the analysis process.
E. when to stop the process and move forward with strategy.
Answer:
Bypassing regular wholesale/retail channels in favor of direct sales and Internet
retailing can have appeal if it:
A. reinforces the brand, enhances consumer satisfaction, and results in lower prices to
end users.
B. can result in better coordination of the firm’s direct sales activity to wholesalers and
distributors
C. can establish a retail frontal attack while efficiently managing its backward
(defensive) sales orientation.
D. combines the best of all sales channels and provides financial support to distribution
allies.
E. creates a channel conflict, thereby providing competitive improvisation.
Answer:
Which of the following is NOT a factor that makes an alliance “strategic” as opposed to
just a convenient business arrangement?
A. The alliance is critical to the company’s achievement of an important objective.
B. The alliance helps block a competitive threat.
C. The alliance helps open up important new market opportunities.
D. The alliance helps build, enhance, or sustain a core competence or competitive
advantage.
E. The alliance helps the company obtain additional financing on better credit terms.
Answer:
When is a think-local, act-local approach to strategy making appropriate?
A. When the need for local responsiveness is minimal and when potential efficiency
gains from standardization is unrestricted by cross-country opportunities
B. When the local manager is intellectually savvy
C. When the local market provides strong opportunity for growth and profitability
D. When the need for local responsiveness is high due to significant cross-country
differences in demographic, cultural, and market conditions and where benefits from
standardization is limited
E. When the need for centralized decision making is relevant due to various
macroeconomic and market conditions
Answer:
Which of the following signals would NOT warn challengers that strong retaliation is
likely?
A. Publicly announcing management’s commitment to maintain market share
B. Publicly committing to a company policy of matching competitors’ terms or pricing
C. Maintaining a war chest of cash and marketable securities
D. Making a strong counter-response to the moves of weak competitors
E. Announcing strong quarterly earnings potential to financial analysts
Answer:
Once a company has decided to employ a particular generic competitive strategy, then it
must make the following additional strategic choices, EXCEPT whether to:
A. focus on building competitive advantages.
B. employ the element of surprise as opposed to doing what rivals expect and are
prepared for.
C. display a strong bias for swift, decisive, and overwhelming actions to overpower
rivals.
D. create and deploy company resources to cause rivals to defend themselves.
E. pay special attention to buyer segments that a rival is already serving.
Answer:
Visible actions to reallocate operating funds and move people into different and new
organizational units:
A. can be dysfunctional in trying to implement a new strategy because of the anxiety
and insecurity that big changes in budgets cause among company personnel.
B. signal a determined commitment to strategic change and can help catalyze and give
credibility to the implementation process.
C. run the risk of inadvertently creating barriers to building the needed competencies
and capabilities.
D. tend to impede the task of empowering employees and shifting to a new, more
strategy-supportive culture.
E. are rarely necessary in implementing a new strategy unless the new strategy entails a
radically different set of value chain activities.
Answer:
A broad differentiation strategy improves profitability when:
A. it is focused on product innovation.
B. differentiating enhances product performance and quality.
C. the differentiating features appeal to sophisticated and prestigious buyers.
D. the higher price the product commands exceeds the added costs of achieving the
differentiation.
E. the differentiator charges a price that is only fractionally higher than the industry’s
low-cost provider.
Answer:
What does a good strategy execution require?
A. A team effort with all managers having strategy executing responsibility in their
areas of authority, and making all employees active participants in the strategy
execution process
B. Incremental changes to current operating practices be implemented to ensure
existing resource capabilities are not impacted too severely
C. Little consensus building, despite the magnitude of the proposed changes, because
employees know the benefits gained from the planning process
D. The strategy-critical value chain activities to be simplified so that all company
personnel can be cognizant of the benefits of the execution parameters
E. Additional investments in capital projects rather than adding to a company’s talent
base and building intellectual capital
Answer:
Which of the following is most UNLIKELY to qualify as driving forces?
A. Changes in the long-term industry growth rate, the entry or exit of major firms, and
changes in cost and efficiency
B. Increasing globalization of the industry and product innovation
C. New Internet technology applications, new government regulations, and significant
changes in government policy toward the industry
D. Increasing efforts to collaborate with suppliers via strategic alliances and
partnerships, escalating risk levels and normalization of cost and efficiency in the
industry
E. Marketing innovations and changes in who buys the industry’s product and how they
use it
Answer:
What separates a powerful strategy from a run-of-the-mill or ineffective one is:
A. the ability of the strategy to keep the company profitable.
B. the proven ability of the strategy to generate maximum profits.
C. the speed with which it helps the company achieve its strategic vision.
D. management’s ability to forge a series of actions, both in the marketplace and
internally, that sets the company apart from rivals, and produces sustainable competitive
advantage.
E. whether it allows the company to maximize shareholder value in the shortest
possible time.
Answer:
The faster a company’s business environment is changing only makes it imperative for
strategy makers to:
A. pay attention to early warnings of future change and be willing to experiment to
establish a market position in the future.
B. stay abreast of the changes by developing a comprehensive knowledge management
system to monitor the environment.
C. establish controls to ensure the impact of any changes is monitored appropriately and
ensure the internal environment is maintained.
D. align their decision-making with organizational unit objectives.
E. develop financial objectives that reflect the implications of change and that meet the
internal environment’s functional focus.
Answer:
Evaluating the industry’s driving forces, as a whole, requires understanding their
influence on the attractiveness of industry environment and generally are:
A. determined by the sizes of strategic groups and the power of rival firms’ competitive
strategies.
B. defined in ways that will strengthen or weaken market demand, competition, and
industry profitability in future years.
C. the cause of a reduction in the bargaining power of buyers.
D. triggered by movement in the economy, higher or lower interest rates, or important
new strategic alliances.
E. triggered by such factors as growing competitive pressures from substitute products,
and the efforts of rival firms to employ new or different offensive strategies.
Answer:
The most significant signs of a well-managed company are:
A. the eagerness with which executives set stretch financial and strategic objectives and
develop an ambitious strategic vision.
B. aggressive pursuit of new opportunities and a willingness to change the company’s
business model whenever circumstances warrant.
C. good strategy-making combined with good strategy execution.
D. a visionary mission statement and a willingness to pursue offensive strategies rather
than defensive strategies.
E. a profitable business model and a balanced scorecard approach to measuring the
company’s performance.
Answer:
Which of the following statements about implementing and executing a new strategy is
true?
A. Executing strategy calls for essentially the same kinds of creative management talent
and innovative thinking as does crafting strategy.
B. Executing strategy is chiefly a financially driven process aimed at squeezing the
most profit out of conducting daily operations.
C. Executing strategy is a job for a company’s whole management team, not just a few
senior managers.
D. Executing strategy depends heavily on the caliber of a CEO’s business vision,
industry and competitive analysis skills, and entrepreneurial creativity.
E. Executing strategy tends to be a simpler, quicker management task to perform as
compared to crafting a winning strategy.
Answer:
Triple-bottom-line (TBL) reporting is emerging as an important way for companies to:
A. conceal their initiatives and accomplishments in the areas of diversity, environment,
community, and ethics to increase profitability.
B. make the results of their CSR strategies apparent to stakeholders and for
stakeholders to hold companies accountable for their impact on society.
C. minimize transparency and facilitate benchmarking CSR efforts across firms and
industries.
D. minimize the use of standard reporting frameworks and metrics.
E. attract profit-oriented investors.
Answer:
With an example, explain how the Six Sigma process of define, measure, analyze,
improve, and control (DMAIC) works.
Answer:
What is the managerial value of a good strategic vision?
Answer:
Encouraging employees to challenge existing ways of doing things, and to be creative
and innovative in proposing better ways of operating, requires the company to create a
supporting environment. In many firms, this means empowering their employees. What
is meant by empowerment of employees? How does it differ from delegation of
authority? In what ways can empowerment of employees aid the cause of good strategy
execution?
Answer:
Name the five broad areas that information systems need to cover and explain the
significance of real-time tracking and reporting.
Answer:
Explain the difference between a centralized and a decentralized organizational
structure. Which one is more likely to further the cause of good strategy execution?
Why?
Answer:
A pen manufacturer sells high-quality pens at a very low price but provides pen-specific
low-cost refills at a relatively higher price. Explain this business model.
Answer:
Explain how exchange rate fluctuations pose a risk to manufacturing companies that
rely upon an export strategy to compete in foreign markets.
Answer:
A new entrant in a market uses copycat products at its rival at budget prices. What can
you say about this company’s long-term success?
Answer:
Identify and discuss the three ways that a corporate culture, grounded in actions,
behaviors, and work practices and conducive to good strategy implementation can assist
corporate strategy execution.
Answer:
What are the three principal advantages of strategic alliances over vertical integration or
mergers/acquisitions?
Answer:
Under what circumstances might an already diversified company choose to enter
additional businesses and broaden its diversification base?
Answer:
Explain what is involved in building capabilities internally. What steps are required?
How much time does it take? How hard is it? Support your answer.
Answer:
Discuss briefly what is meant by the terms ethical universalism and ethical relativism.
Where does integrated social contracts theory fit into the debate about ethical
standards? Which of the three schools of thought stands on the strongest ground?
Answer:
Identify and briefly explain any two of the factors that influence the strength of
competition from substitute products.
Answer:
Why is it important for company managers to develop a “worry list” of strategic issues
and problems that they need to address and resolve? What should they consider to
develop this list?
Answer:
Give any three nonmonetary examples of motivation and rewards practices that have
the capability to foster good strategy execution and explain how they act to produce
such a result.
Answer:
Ali is a business unit head of a soap manufacturing company. Explain the strategy he
could use to strengthen his market position and build a competitive advantage over his
rivals. Differentiate between his strategy and a corporate strategy.
Answer:
A dining facility with multiple branches caters to newlywed couples only. The
ambience, special live music arrangements for each couple, and privacy of the dining
sections have become a rage among newlyweds. Which of the five generic strategies
has the company used?
Answer:
What are mergers and/or acquisitions? How do they contribute to enhancing a
company’s position?
Answer: