Chapter 6: Organizational Strategy
TRUE/FALSE
1. There are four conditions that must be met if a firm’s resources are to be used to achieve a sustainable
competitive advantage. The resources must be valuable, rare, imperfectly imitable, and
nonsubstitutable.
2. An analysis of an organization’s external environment begins with an assessment of the company’s
distinctive competencies and core capabilities.
3. Companies often choose a stability strategy when their external environment doesn’t change much, or
after they have struggled with periods of explosive growth.
4. Reactors follow the consistent strategy of anticipating and reacting to potential external opportunities
and threats prior to their occurrence.
MULTIPLE CHOICE
1. The first step in the strategy-making process is to:
a.
assess the need for strategic change
b.
conduct a situation analysis
c.
choose strategic alternatives
d.
evaluate the impact of changes on the internal environment
e.
create a strategic budget
2. In a situational analysis, a strategic group is a group of __________ that top managers choose for
comparing, evaluating, and benchmarking their company’s strategic threats and opportunities.
a.
non-industry-specific companies
b.
expert managers
c.
trade journals and other relevant periodicals
d.
other firms within an industry
e.
consulting firms that use the Delphi technique
3. Which of the following is a mechanism used to examine external threats and opportunities facing a
firm as well as its internal strengths and weaknesses?
a.
organizational scanning
b.
internal marketing
c.
shadow-strategy task forces
d.
benchmarking
e.
a situation analysis
4. In any organization, the __________ are the less visible, internal decision-making routines,
problem-solving processes, and organization cultures that determine how efficiently inputs can be
turned into outputs.
a.
imperfectly imitable resources
b.
valuable resources
c.
distinctive competencies
d.
core capabilities
e.
sources of innovation
5. According to Strategic Reference Point Theory, managers have two basic strategic alternatives. They
are:
a.
risk-avoiding strategy and pioneering strategy
b.
risk-avoiding strategy and risk-seeking strategy
c.
risk-maintenance strategy and conflict-avoidance strategy
d.
frontal attack strategy and guerrilla strategy
e.
none of these
6. The research on diversification in portfolio management indicates that the best approach is probably:
a.
related differentiation
b.
related diversification
c.
unrelated diversification
d.
repositioning
e.
no diversification
7. Which of the following is NOT one of the five industry forces that determine an industry’s overall
attractiveness and potential for long-term profitability?
a.
character of rivalry
b.
existing complementary products
c.
bargaining power of suppliers
d.
threat of substitute products
e.
bargaining power of buyers
8. The purpose of __________ strategies is to choose an industry-level strategy that is best suited to
changes in the organization’s external environment.
a.
positioning
b.
differentiation
c.
growth
d.
adaptive
e.
diversification