Chapter 1 The Concept of Strategy Multiple Choice

Multiple Choice Questions 21. The primary purpose of strategy is: @ Pages and References: p4 a. Being better than rivals *b. Achieving success c. Satisfying all stakeholders d. Being an excellent “corporate citizen” 22. The successful careers of both Queen Elizabeth II and Lady Gaga may be attributed to the fact that both: @ Pages and References: pp4-5 a. Have used dressing up as a means of attracting attention and establishing identity b. Have a knack for being in the right place at the right time *c. Have a consistency of direction based on clear goals d. Have built a loyal fan base based on astute use of the media. 23. For both individuals and businesses, successful strategies are characterized by: @ Pages and References: p8 a. Unrelenting commitment to ambitious goals *b. Clear goals, deep understanding the competitive environment, careful resource appraisal, and effective implementation c. Meticulous planning d. The possession of superior abilities and resources which are then deployed to build competitive advantage. 24. Strategic goals should be: @ Pages and References: pp9-10 a. Simple b. Consistent c. Long term *d. All of the above 25. The main problem of SWOT as a framework for strategy analysis is that: @ Pages and References: p11 a. Distinguishing opportunities from threats and strengths from weaknesses is often difficult b. It has been around for five decades and has now been superseded by more sophisticated analytical frameworks c. It is focused on strategy formulation and fails to take account of strategy implementation d. It is so widely used that it no longer has any novelty. 26. If a firm adjusts its strategy to ensure it is consistent with its external environment, it benefits from a: @ Pages and References: p10 *a. Strategic fit b. Strategic leadership c. Location within an attractive industry d. A license to operate 27. Strategic fit refers to: @ Pages and References: pp10-11 a. The need for a firm’s strategy to be consistent with its vision, mission, and culture *b. The consistency of a firm’s strategy with its external and internal environments c. The need for a firm’s strategy to be unique d. The need for a firm’s strategy to meet the needs of all its stakeholders, not just shareholders 3 28. Ryanair’s strategic position is as Europe’s lowest-cost airline may be attributed to: @ Pages and References: pp11-12 a. The willingness of its CEO, Michael O’Leary, to challenge conventional notions of customer and employee satisfaction b. Its use of secondary airports where costs are lower c. The high operating costs of major airlines such as British Airways, Lufthansa, and Air France-KLM on short-haul routes *d. An integrated, consistent set of activities designed to maximize productivity and minimize operating costs. 29. The principal similarity between business and military strategy is that: @ Pages and References: p12 a. They share the same objective: to annihilate rivals *b. They share common concepts and principles c. The nature of leadership is much the same whether in a military or business context d. They are both concerned with tactical maneuvers that can establish positions of advantage. 30. In the military field, we generally make the following distinction between strategy and tactics: @ Pages and References: p12 a. Tactics comprise the overall plan whereas strategy focuses on specific actions *b. Tactics relate to specific actions whereas strategy relates to the overall plan c. Tactics encompass specific political actions within the firm whereas strategy is the overall plan for deploying resources to establish a favorable position d. Tactics form the overall plan whereas strategy is concerned with the maneuvers to win battles 31. The main reason for the transition from corporate planning to strategic management during the latter half of the 1970s was: @ Pages and References: p13 a. The influence of Michael Porter b. Disappointing returns of corporate diversification *c. A more turbulent business environment that became increasingly difficult to predict d. Growing disillusionment with central planning. 32. The primary distinction between corporate strategy and business strategy is: @ Pages and References: p19 a. Corporate strategy is the responsibility of the CEO, business strategy is formulated by the heads of business units *b. Corporate strategy is concerned with where the firm competes; business strategy with how it competes c. Corporate strategy is concerned with establishing competitive advantage; business strategy with strategy implementation in individual businesses d. Corporate strategy is concerned with the long-term performance of the firm; business strategy with resource deployment. 33. The notion of “strategic fit”: @ Pages and References: p10 a. Is common in strategic literature but means different things to different experts b. Implies deep coherence across all functions within the organization c. Expresses how well a firm’s strategy fits its internal environment *d. Answers a and c 34. “Strategy” derives from a Greek word meaning: @ Pages and References: p13 a. The art of arranging men in a battlefield *b. Generalship c. The art of maintaining a state’s security 4 d. Maintaining ethical and spiritual purity 35. The book that is considered as the first treatise on strategy is: @ Pages and References: p12 a. Carl Von Clausewitz’s Vom Kriege (On war) *b. Sun Tzu’s Art of War c. The Bible d. Niccolo Machiavelli’s Dell’arte della Guerra (The art of war) 36. Military strategy and business strategy differ in that: @ Pages and References: p12 a. There is no concept like tactics in business b. Good military strategist must first be a good military tactician – practicing it in the field first *c. The objective of military strategy is to defeat the enemy; business strategy seeks coexistence rather than annihilation d. None - there is no conceptual difference 38. In the 1980s, Michael Porter pioneered: @ Pages and References: p13 *a. The application of industrial organization economics for analyzing industry profitability b. The development of “PIMS” at the Strategic Planning Institute c. The first synthesis of the resource and capability approach d. The application of game theory to strategic management 39. During the 1990s, the focus of strategy analysis shifted: @ Pages and References: p14 a. From corporate planning to strategic management *b. To the role of resources and capabilities as a foundation for firm strategy c. To the application of microeconomics to analyze the sources of firm profitability d. From the structure-based approach to the value-added perspective 40. The increasingly complex business environment of the 21st century has resulted in: @ Pages and References: p14 a. Firms shifting their emphasis towards the growth markets of Asia, Africa, and Latin America. Firms abandoning shareholder value maximization in favor of maximizing stakeholder interests *c. Firms increasingly depending upon other firms through outsourcing and strategic alliances d. Firms embracing digital technologies 41. The expression “blue oceans” in strategic management is: @ Pages and References: p14 a. only a figure of speech b. a concept that signifies the immensity of potential new markets c. a concept employed in the US Navy’s strategic planning process d. an expression coined by business school professors to make their book more appealing to practicing managers 42. When the environment becomes more turbulent, unpredictable, and full of new opportunities: @ Pages and References: p16 a. strategy appears to not be very useful *b. strategy becomes a vital tool to navigate the firm through “stormy seas” c. strategy should be put into the hands of external consultants d. strategy becomes an “impossible exercise” 43. The essence of strategy is: @ Pages and References: p12-16 a. Making choices b. Doing things differently c. Where and how to compete5 *d. All of the above 44. The two questions of “where and how to compete” define: @ Pages and References: p18 *a. a firm’s corporate and business strategies b. a firm’s strategic management process c. a firm’s vision and mission d. a firm’s values and culture 45. How do corporate level strategy and business level strategy differ? @ Pages and References: p18 *a. Corporate strategy defines the scope of a firm’s activities, while business strategy focuses on how to beat the competition in a specific product market b. Corporate strategy defines the scope of a firm’s structure, while business strategy emphasizes the relationship of each business with its environment (state, regulators, etc.) c. Corporate strategy focuses on the overall strategic plan, while business strategy focuses on implementing strategic decisions in each product market d. Corporate level strategy is concerned with long term goals, while business level strategy focuses on short term sustainability 46. Corporate strategy is concerned with: @ Pages and References: p19 *a. the scope of the firm in terms of industries and markets, and the allocation of its resources b. a firm’s relationships with its principal stakeholders c. the corporate governance of each individual business d. None of the above 47. Business strategy defines: @ Pages and References: p19 a. the way a firm competes in a particular industry or market b. the way a firm establishes a competitive advantage over its rivals within a specific industry or market *c. Both of the above d. Neither of the above 48. Between the two levels of strategy, the division of responsibility is consistent with the following principle: @ Pages and References: p19 a. There is no principle but only limited rationality and trial-and-error processes to find the best allocation between different levels of management *b. Corporate level strategy is the domain of headquarters executives, while division managers are in charge of their business level strategies c. Corporate level strategy is the domain of the parent company; business level strategy is handled by the functional department managers d. Corporate and business level strategies are not any specific organizational level’s responsibility because of the principle of maximum delegation and decentralization 49. In regard to strategy making, most firms are likely to exhibit: @ Pages and References: p23 *a. A combination of design and emergence b. A decentralized, bottom-up process c. An interaction between strategic design, through organizational processes, and strategic enactment through decisions made by all d. Limited involvement by boards of directors 50. Strategy improves decision-making by: @ Pages and References: pp16-17 a. Reducing the number of choices being considered b. Integrating and pooling the knowledge of different members of the organization c. Facilitating the use of analytic tools 6 *d. All of the above 51. Honda’s successful entry into the US motorcycle market has: @ Pages and References: p23 *a. Provided a battleground for the debate opposing the Design School and the Learning School b. Been an extraordinary epic where players were discovering the field while dealing with its traps c. Shown that the rational and analytical model was superior to the emergence model because only intensive analysis and forecasting were able to fuel this success story d. Shown the difficulty of entering the US market for Japanese firms because of the cultural, organizational, and legal gaps 52. In all organizations, strategy making involves a combination of top-down strategy design and decentralized mergence. The balance between the two depends mainly upon: @ Pages and References: p23 a. How turbulent and unpredictable is the external environment of the organization b. The extent to which decision making is centralized c. The commitment of the organization to experimentation d. The extent to which the organization has a formalized process of strategic planning. 53. The applicability of the tools and techniques of strategy analysis to not-for-profit organizations is: @ Pages and References: p25 a. Greater for organizations that face competitions than those that do not. b. Greater for organizations that charge for their services than those which do not c. Greater for organizations that both charge for their services and face competition than those which are monopolists providing services free of charge. d. Is severely limited by the lack of a profit motive. 7