TESTBANK: CHAPTER 1
The Concept of Strategy
True/False Questions
1. Strategy is a detailed plan that programs the actions of an organization or an individual.
[See pp.15-16]
2. Strategy is a unifying theme that gives coherence and direction to the actions and decisions of an
organization.
[See p.4]
3. The career success of both Queen Elizabeth II and Lady Gaga may be attributed to their willingness
to engage in systematic strategic planning
[See pp.4-5]
4. If a firm can devise a brilliant strategy, it will be successful irrespective of how effectively it is
implemented.
[See p.5]
5. A key component of an effective strategy is clear, consistent, long-term goals.
[See p.5]
6. A major problem of using SWOT analyses in distinguishing strengths from weaknesses and
opportunities from threats.
[See p.11]
7. “Strategic fit” related to the consistency between a firm’s strategy and, on one hand, its external
environment and, on the other, its internal resources and capabilities.
[See p.10]
8. Contingency theory postulates that a firm’s strategy must to flexible in order to meet any possible
contingency.
[See p.11]
9. Many of the concepts and theories of business strategy have their origins in military strategy.
[See p12]
10. Strategy denotes an overall plan whereas a tactic is a scheme for a specific action.
[See p.12]
11. Strategic decisions are important, involve a significant commitment of resources, and should be
easily reversible.
[See p.12]
12. The main factor causing the transition from corporate planning to strategic management was the
influence of business school academics such as Michael Porter at Harvard Business School.
[See p.13]
13. Strategic choices involve two basic questions: where and how to compete?
[See p.18]
14. In the large, complex firm, two main levels of strategy can be distinguished: corporate strategy and
business (or competitive) strategy.
[See p.18]
15. When describing the strategy of a firm, it is best to ignore the current positioning of the firm in
order to concentrate upon the direction in which the firm will develop in the future.
[See p.21]
16. The reason that a firm’s realized strategy diverges from its intended strategy is because strategy
making is, to a great extent, an emergent process.
[See p.22]
17. According to Henry Mintzberg, firm strategy should be formulated by top management through
rational deliberation utilizing all available data.
[See p.22]
18. The dynamic, future-oriented dimension of a firm’s strategy is described by its mission and vision
statements and its performance targets.
[See p.21]
19. The balance between intended and emergent strategy depends primarily upon the stability and
predictability of the organization’s business environment. The more stable and predictable the
environment, the greater the importance of emergent strategy.
[See p.23]
20. Applying the tools of strategy analysis to not-for-profit organizations is simplified by the fact that
they do not need to be concerned with maximizing profit.
[See p.27]
Multiple Choice Questions
21. The primary purpose of strategy is:
[See p.4]
22. The successful careers of both Queen Elizabeth II and Lady Gaga may be attributed to the fact that
both:
[See pp.4-9]
23. For both individuals and businesses, successful strategies are characterized by:
[See p.6-7]
24. Strategic goals should be:
[See p.10]
25. The main problem of SWOT as a framework for strategy analysis is that:
[See p.11]
26. Strategic fit refers to:
[See p.10]
27. A conceptualization the firm as an “activity system” is a means of depicting:
[See pp.10-11]
28. Ryanair’s strategic position is as Europe’s lowest–cost airline may be attributed to:
[See pp.11–12]
29. The principal similarity between business and military strategy is that:
[See p.12]
30. In the military field, we generally make the following distinction between strategy and tactics:
[See p.12]
31. The main reason for the transition from corporate planning to strategic management during the
latter half of the 1970s was:
[See p.13]
32. The primary distinction between corporate strategy and business strategy is:
[See p.18]
33. A description of a company’s organizational purpose is called a ______?
[See p.10]
34. Strategy has its origins in:
[See p.17]
35. The book that is considered as the first treatise on strategy is:
[See p.12]
36. Military strategy and business strategy differ in that:
[See p.12]
38. In the late 1970s and early 1980s, Michael Porter pioneered:
[See p.13]
39. During the 1990s, the focus of strategy analysis shifted:
[See p.14]
40. During the 21st century, the complexity of the challenges posed by disruptive, digital technologies
and accelerating rates of change has encouraged companies to:
[See p.14]
41. In strategic management, the expression “blue oceans” refers to:
[See p.14]
42. When the environment becomes more turbulent and unpredictable:
[See p.15]
43. Strategy can help decision making by:
[See p.16]
44. The two questions of “where” and “how” to compete define:
[See p.18]
45. The main difference between corporate level strategy and business level strategy is:
[See pp.17–18]
46. When identifying a company’s strategy, its statements of a strategy found in its public documents
need to be:
[See pp.17-18]
47. Business strategy defines:
[See p.19]
48. The division of responsibility between corporate and business strategy is consistent with the
following principle:
[See p.19]
49. The relationship between design and emergence in strategy making is best described as:
[See p.23]
50. Strategy improves decision-making by:
[See pp.16–17]
51. The main value of analytical approaches to strategy formulation is:
[See pp.23-24]
52. The extent to which an organization’s strategy is determined by decentralized emergence rather
than by centralized design depends mainly upon:
53. The applicability of the tools and techniques of strategy analysis to not-for-profit organizations is:
[See p.26-28]