Management, 9e (Kinicki)
Chapter 6 Strategic Management: How Exceptional Managers Realize a Grand Design
1) Mel’s Diner is a popular café that specializes in home-cooked meals, friendly service, and a
menu that contains vegan and vegetarian dishes (menu items that no other restaurant in the area
offers). Mel’s Diner is engaging in strategic positioning by offering the unique menu items of
vegan and vegetarian dishes.
2) Executive Office Supply, a small family-owned company, sells high-priced desks, some as
expensive as $10,000, to executives in its area. Very few companies have chosen to market this
product, and Executive Office Supply has enjoyed record profits over the last 25 years. As their
financial planner, you would advise Executive Office Supply to not utilize strategic planning.
3) The first three steps in the strategic-management process are establishing the mission and the
values statement, assessing the current reality, and formulating the grand strategy.
4) Ray is interested in rewriting the vision statement for his antique shops, and he wants his
employees and his business to grow. Therefore, the vision for Ray’s stores should be positive and
inspiring, and it should stretch the company and his employees to achieve objectives that they
believe are not possible.
5) When Nordstrom’s says, “Leave it better than we found it. We work hard to be a company that
our employees and our customers can be proud of. For us, that means doing our best to support the
many people and communities we serve. It also means respecting the environment by reducing our
impact and conserving resources where we can. We strive to make people feel good and show that
Nordstrom is a company that cares.” They are sharing their mission.
6) The Internet has fueled rivalries among all kinds of companies.
7) Hanson Steel sees the new trade tariffs as an organizational threat.
8) Fascinating Fez, a 125-year-old hat and cap manufacturer, markets very high-quality stylish
headwear, many of which cost more than $1,000 each, to fashionistas globally, always maintaining
its reputation of superior value in its narrow market. Fascinating Fez is using a cost-focus strategy.
9) Reflection is a key activity in developing your ability to think more strategically.
10) Because all work ultimately entails some human interaction, effort, or involvement, Bossidy
and Charan believe that focusing on organization synergy is the most important process in strategy
execution.
11) ________ focus(es) on developing a comprehensive program for long-term success.
A) Strategic planning
B) Mission and vision statements
C) Organizational diversity
D) TQM
E) A synergy agenda
12) Four Seasons Lawn and Landscaping provides customers with quality and value, treats others
as they want to be treated, and practices open communications with all stakeholders. These are part
of their
A) values statement.
B) vision statement.
C) mission statement.
D) strategic formulation.
E) reality assessment.
13) Which managers would be at Level 2: Business-Level Strategy?
A) finance managers
B) human resource managers
C) retail unit managers
D) operations managers
E) marketing managers
14) The three key principles of ________ are the creation of a unique and valuable position,
trade-offs in competing, and creating a “fit” among activities.
A) company diversity
B) an increased MBO
C) a strong employee morale
D) an environment with few or no competitors
E) strategic positioning
15) According to Harvard Business School professor Michael Porter, strategic positioning means
________ to achieve sustainable competitive advantage.
A) aggressive growth
B) distinctive positioning
C) collaborative planning
D) strategic alliances
E) retrenchment
16) What are the three sources of a unique and valuable strategic position?
A) few needs, many customers; broad needs, few customers; broad needs, many customers
B) low-cost products; huge market needs; unique products
C) many needs, few customers; little need, many customers; narrow needs, few customers
D) poor products available; few products available; no products available
E) bad economy; strong economy; stable economy
17) Cooper Technologies is a technology company that offers many IT services in Chicago. The
company’s services and products include computer training, support, monitoring, repair, network
design, virus removal, and software upgrades. It even sells refurbished computers. The source of
Cooper Technologies’ strategic position is
A) low-profit margin and many customers.
B) broad needs and few customers.
C) broad needs and many customers.
D) high-profit margin and many customers.
E) high-profit margin and few customers.
18) With small businesses in very competitive industries, small differences in performance may
affect that company’s survival. In this case, it is worth the effort for the company’s managers to
implement
A) organizational diversity.
B) a synergy agenda.
C) MBO.
D) TQM.
E) strategic planning.
19) A local dance studio offers many services: tap and ballet lessons to young children (under age
10), additional jazz and hip hop lessons to preteens, competitive dance for teenagers, and ballroom
dance for adults. We can say that the studio has achieved ________ because the studio’s activities
interact and reinforce one another.
A) an effective defensive strategy
B) a blue ocean strategy
C) diversification
D) contingency
E) fit
20) Spotlight Movies has conducted market research about to where to open their next theater.
They want to stay-focused on their mission to only open in markets with less than 200,000 people.
Their strategy is
A) few needs, many customers.
B) broad needs, few customers.
C) broad needs, many customers.
D) few needs, few customers.
E) broad needs, some trade-offs.
21) ________ requires a manger to visit an earlier step in the strategic-management process in
order to revise actions if necessary.
A) The organizational mission
B) Strategy formulation
C) The current reality assessment
D) The feedback loop
E) The planning process
22) In order, the steps of the strategic-management process are
A) establish the mission and vision statements, assess the current reality, conduct a trend analysis,
and maintain the feedback loop.
B) establish the mission statement, maintain strategic control, formulate the grand strategy, and
implement the strategy.
C) establish the mission, vision, and values statements; assess the current reality; formulate the
grand strategy; implement the strategy; and maintain strategic control.
D) establish the vision and values statements, develop a mission statement, formulate the grand
strategy, implement the strategy, and maintain the feedback loop.
E) determine the strategy; carry out the strategic plans; and establish the mission, vision, and
values statements.
23) The second step in the strategic-management process is a(n) ________, where managers look
at where the organization stands, and then determine what is working and what could be different
to maximize efficiency and effectiveness in achieving the organization’s mission.
A) organizational vision statement
B) company synergy assessment
C) current reality assessment
D) ethical and diversity evaluation
E) grand strategy
24) An organization’s vision statement needs to describe
A) the organization’s purpose or reason for being.
B) what the company will market and its business plan.
C) the organization’s purpose or reason for being and its strategic intent.
D) the organization’s ethical and diversity standards.
E) what the company wants to become and where it wants to go strategically.
25) “Who are our customers? What are our major products or services? In what geographic areas
do we compete?” A good ________ will answer these questions.
A) vision statement
B) code of ethics
C) mission statement
D) value pact
E) management belief statement
26) Carlos has written his mission, vision, and value statements. He has completed his
organizational assessment. What is his next step?
A) strategy implementation
B) conduct a feedback loop
C) maintain strategic control
D) formulate functional strategies
E) assess strategic thinking
27) Growth, stability, and defensive strategies are common
A) leadership strategies.
B) cost-leadership strategies.
C) types of differentiation plans.
D) stabilization strategies.
E) grand strategies.
28) PC’s & More has shifted to sales and service of laptops and PCs, where it has the potential to
triple the number of its customers. The company is no longer offering repairs on older types of
office equipment because the demand for service on this equipment is low, and profits in that part
of the business have dropped significantly. PC’s & More is implementing a ________ strategy.
A) growth
B) cutting-edge
C) stability
D) defensive
E) diverse
29) Global Market has decided to increase its market share by hiring a marketing rep to visit
businesses in the area and invite their employees to shop at Global Market and attend monthly
health events that take place at Global Market stores. Each of the individual stores has hired two
new employees to handle the anticipated increase in customer traffic. Global Market is using a
________ strategy.
A) cutting-edge
B) stability
C) defensive
D) growth
E) diverse
30) A+ Enterprises has a reputation of reliability and a winning customer service, qualities that
helped to build this highly respected name brand over the last 15 years. Speaking at a recent
business conference, Benjamin, the CEO of A+, told his audience, “We have built our reputation
by changing little over the last several years, but consistently helping customers with great, caring
service and a reliable product.” Which type of strategy does A+ Enterprises use?
A) defensive strategy
B) merger approach
C) retrenchment strategy
D) growth strategy
E) stability strategy
31) Over the course of 40 years, Frank grew his company to six package shipping stores. With his
retirement approaching and the increased competition, he decided to reduce the number of
locations to two. Frank’s reduction of effort represents a
A) merger approach.
B) fixed plan.
C) defensive strategy.
D) growth strategy.
E) stability strategy.
32) ________ is another term for a defensive strategy.
A) A retrenchment strategy
B) A fixed plan
C) The aggressive approach
D) A growth strategy
E) A stability strategy
33) Strategy formulation is the process of
A) gaining information about competition and then selecting which information to react to.
B) choosing among different strategies and altering them to best fit the organization’s needs.
C) strategically controlling your employees’ actions.
D) selecting the employees who best fit the organization.
E) developing a strong diversity plan.
34) Edmond, the CEO of Hartman Manufacturing, said to his new vice president of accounting, “In
the past I had resistance to new ideas by employees who felt that our plans threatened their
influence or their jobs. So when you tell your collections department that we just hired a collection
agency to handle bad debt, you may have to sell your collections manager and his supervisors on
using the agency. You also have to emphasize the fact that nobody is going to be laid off.” Selling
middle and supervisory managers on changes to overcome their resistance is often a necessary part
of
A) reality assessment.
B) strategy formulation.
C) strategic control.
D) operational control.
E) strategy implementation.
35) ________ is(are) included in strategic control.
A) Implementing MBO
B) A strong employee diversity and synergy agenda
C) Seldom making adjustments to a strategy
D) Monitoring the execution of strategy and making adjustments, if necessary,
E) Developing a diversity plan
36) Bryan Barry suggests that to keep a strategic plan on track, organizations should
A) engage people, keep it simple, stay focused, and keep moving.
B) engage people, keep people happy, provide fun activities, and provide good benefits.
C) provide fun activities, provide good benefits, and keep it simple.
D) engage people, keep it simple, stay focused, and offer a good benefits package.
E) aggressively compete, cut costs, focus on customer service, and engage people.
37) Lester, a chef and owner of Green Lantern, a popular restaurant, is always visiting his
competitors to observe how they are doing things in their restaurants. He told one of his managers,
“I eat dinner at a lot of restaurants because I want to know what is going on. I am always concerned
that one of our competitors will surprise us with a new service or menu item, like ours but better.”
In which activity is Lester engaging?
A) assessing current reality
B) environmental planning
C) TQM
D) corporate spying
E) management by observation
38) Armando, CEO of a successful medical supply company, is constantly reading press releases,
ads, and news articles about his competition. He regularly checks information about new
competitive products and visits trade shows to study his competition. Armando is involved in
A) analyzing strengths.
B) identifying weaknesses.
C) describing threats.
D) managing by observation.
E) evaluating opportunities.
39) Vicky keeps a close eye on her company’s internal and external environment to discover
possible opportunities for new products and to discern possible threats from the competition. In
which activity is Vicky engaged?
A) the synergistic approach
B) SWOT analysis
C) corporate spying
D) management by observation
E) competitive intelligence
40) A SWOT analysis is a(n)
A) search for the strengths, weaknesses, opportunities, and threats influencing an organization’s
competition.
B) diversity and synergy method used in vertical integration.
C) search for the strengths, weaknesses, opportunities, and threats affecting an organization.
D) analysis of strategies, ways to improve, output methods, and threats influencing a company.
E) inexpensive method of implementing a forecast.
41) Many customers shop at All Natural because of the employees’ extensive product knowledge.
In a SWOT analysis, the employees’ high levels of product knowledge are an example of the
company’s
A) strengths.
B) threats.
C) weaknesses.
D) opportunities.
E) intelligence.
42) Tito knows that one of the reasons people do not return to his electronics store is because of the
slow service. How would a SWOT analysis classify the slow service at Tito’s electronic store?
A) as a strength
B) as a threat
C) as a weakness
D) as an opportunity
E) as intelligence
43) True Taste’s Restaurant and Catering serves delicious vegetarian and vegan dishes. So, when
the local community became interested in eating a healthier diet, True Taste’s benefited. In a
SWOT analysis, the changing community attitudes are an example of a(n) ________ for True
Taste’s Restaurant.
A) strength
B) threat
C) weakness
D) opportunity
E) intelligence