Strategic Management Chapter 1 True and False
- Strategic management focuses on integrating management, marketing, finance and accounting, production and operations, research and development, and information systems to achieve organizational success.
Answer: True
- Optimizing for tomorrow the trends of today is the purpose of strategic management.
Answer: False
- Even though useful, strategic planning has been cast aside by corporate America since the early 1990s.
Answer: False
- The decision to expand or diversify operations is a strategy-formulation issue.
Answer: True
- The terms strategic management and strategic planning are synonymous in this text.
Answer: True
- A vision statement identifies the scope of a firm's operations in product and market terms.
Answer: False
- Strategy implementation is often considered to be the most difficult stage in the strategic-management process because it requires personal discipline, commitment, and sacrifice.
Answer: True
- The final stage in strategic management is strategy implementation.
Answer: False
- Formulation, implementation, and evaluation of strategy activities occur at three hierarchical levels in a large organization: corporate, divisional or strategic business unit, and functional.
Answer: True
- One of the fundamental strategy evaluation activities is reviewing external and internal factors that are the basis for current strategies.
Answer: True
- An objective, logical, systematic approach for making major decisions in an organization is a way to describe the strategic-management process.
Answer: True
- Strategic management is an attempt to organize qualitative and quantitative information in a way that allows effective decisions to be made under conditions of uncertainty.
Answer: True
- Analytical and intuitive thinking should complement each other.
Answer: True
- According to Albert Einstein, "Knowledge is far more important than intuition."
Answer: False
- Management by intuition can be defined as operating from the "I've-already-made-up-my-mind-don't-bother-me-with-the-facts mode."
Answer: False
- By occasionally monitoring external events, companies should be able to identify when change is required.
Answer: False
- Firms, like organisms, must be "adept at adapting" or they will not survive.
Answer: True
- U.S. firms are not being challenged in the computer industry.
Answer: False
- Anything the firm does especially well compared to rival firms could be considered a competitive advantage.
Answer: True
- Once a firm acquires a competitive advantage, they are usually able to sustain the competitive advantage indefinitely.
Answer: False
- Newspaper companies in the United States provide a good example of how a company can sustain a competitive advantage over the long-term.
Answer: False
- Although e-commerce has increased in popularity, it has actually led to increases in company expenses.
Answer: False
- While the number of people shopping online has increased, the average amount spent online has decreased.
Answer: False
- One of the ways in which the Internet has transferred power from businesses to individuals is by making comparison-shopping quick and easy.
Answer: True
- Most traditional retailers have tried in vain to use their online sales to boost in-store sales.
Answer: False
- In order for a firm to achieve sustained competitive advantage, a firm must continually adapt to changes in external trends and events and effectively formulate, implement, and evaluate strategies that capitalize upon those factors.
Answer: True
- Strategists are usually found in higher levels of management and have considerable authority for decision-making in the firm.
Answer: True
- The middle manager is the most visible and critical strategic manager.
Answer: False
- All strategists have similar attitudes, values, ethics and concerns for social responsibility.
Answer: False
- A vision statement answers the question, "What is our business?" whereas a mission statement answers, "What do we want to become?"
Answer: False
- In the last five years, the position of chief strategy officer (CSO) has diminished so drastically that today it is almost unheard of for companies to have such a position on staff.
Answer: False
- A clear mission statement describes the values and priorities of an organization.
Answer: True
- Strengths and weaknesses are determined relative to competitors.
Answer: True
- In a multidivisional firm, objectives should be established for the overall company but not for each division.
Answer: False
- Objectives should be measurable, challenging, reasonable, consistent, and clear.
Answer: True
- Annual objectives are long-term milestones that organizations must achieve to reach short-term objectives.
Answer: False
- Annual objectives are especially important in strategy formulation.
Answer: False
- According to research, a healthier workforce can more effectively and efficiently implement strategies.
Answer: True
- Identifying an organization's existing vision, mission, objectives, and strategies is the final step for the strategic management process.
Answer: False
- Once an effective strategy is designed, modifications are rarely required.
Answer: False
- Application of the strategic-management process is typically more formal in larger and well-established organizations.
Answer: True
- Commitment and understanding are the most important benefits of strategic management.
Answer: True
- The best thing strategists can do is develop strategic plans themselves and then present them to operating managers to execute.
Answer: False
- Firms with planning systems more closely resembling strategic-management theory generally exhibit superior long-term financial performance relative to their industry.
Answer: True
- Low-performing firms typically underestimate their competitor's strengths and overestimate their own firm's strengths.
Answer: True
- According to Greenley, strategic management provides increased discipline, enhanced communication, and more effective allocation of time and resources.
Answer: True
- The lack of monetary rewards is one reason managers do not engage in strategic planning.
Answer: True
- Crises and firefighting in an organization give managers the extra time needed to plan ahead.
Answer: False
- Making many intuitive decisions that conflict with the formal plan is one pitfall to avoid in strategic planning.
Answer: True
- Managers must be very formal in strategic planning because formality fosters flexibility and creativity.
Answer: False
- Many organizations mistakenly spend more time and effort on the implementation of a plan, than on the formulation of the plan itself.
Answer: False
- Strategic-management must be a self-reflective learning process that familiarizes managers and employees in the organization with key strategic issues and feasible alternatives for resolving those issues.
Answer: True
- The most effective strategic management is ritualistic, predictable, and formal.
Answer: False
- For the strategic planning process to be effective, organizations must continually strengthen the "good ethics is good business" policy.
Answer: True
- Military success is usually the happy result of accidental strategies, but business success is the product of continuous attention to changing conditions and insightful adaptations to those conditions.
Answer: False
- In most respects, business strategy is very different than military strategy.
Answer: False
- The element of surprise provides great competitive advantages in both military and business strategy.
Answer: True
- Both military and business strategy are formulated, implemented, and evaluated with an assumption of competition.
Answer: False
- Superior strategy formulation is well and good, but it cannot overcome an opponent's superiority in numbers and resources.
Answer: False
- All firms have a strategy, even if it is informal, unstructured, and sporadic.
Answer: True
- Firms can be more proactive with strategic management.
Answer: True
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