Questions and Answers of Strategic Management

What is the difference between a corporate strategy and a business strategy?
Identify the generic business strategy configurations available to strategic managers according to Porter’s typology.
Is it possible for a business to differentiate its outputs and lower its costs simultaneously? Explain.
Identify the generic business strategy configurations available to strategic managers according to Miles and Snow’s typology.
How are the business strategy typologies by Porter and those by Miles and Snow similar? How are they different?
Why might one expect the performance level of midsize business units to be lower than the performance level of either small or large business units?
The focus-differentiation strategy emphasizes low overall costs while serving a narrow segment of the market. True or False
Businesses that employ the focus strategy produce and market to the entire industry products or services that can be readily distinguished from those of their competitors. True or False
The combination strategy can also be referred to as multiple strategies. True or False
There is no advantage to the reactor strategic type. True or False
The generic strategy typologies developed by Porter and Miles and Snow possess both similarities and differences. True or False
Midsize businesses tend to be outperformed by their smaller and larger counterparts. True or False
Businesses adopting the same generic strategy are referred to as _________.A low-cost businesses B. differentiated businesses C. a strategic group D. none of the above
A no-frills product targeted at the market at large is consistent with the __________.A. low-cost strategy B. differentiation strategy C. focus strategy D. none of the above
Which of the following is not a key advantage of the low-cost–differentiation strategy?A. It enables the business to compete from a cost leadership position.B. It is easier to implement than either
Modifying the structure of the organization and/or the business model to improve competitiveness is consistent with __________.A. the low-cost strategy B. the focus strategy C. the differentiation
Analyzers __________.A. seek first-mover advantages B. control a distinct segment of the market C. display some of the characteristics of both prospectors and defenders D. none of the above
Emerging markets are often more attractive than developed ones because __________.A. competition is not as intense B. consumer incomes in emerging markets are not a concern C. the infrastructure in
What are the relationships among corporate-level, business unit, and functional strategies?
Why and how should the four Ps of marketing be aligned to support the organization’s business strategy?
What is the difference between product and process R & D? How can each align with business strategies?
Relate the concept of the experience curve to the production operations of an automobile assembly plant.
Explain the role of business process reengineering in various functional strategies.
Explain the linkage that a JIT inventory system provides between the purchasing and production functions.What are the implications for quality?
Because functional strategies should be designed to support corporate and business strategies, they should not be considered until corporate and business strategies have been formulated. True or False
The most appropriate means of securing funds likely depends on the corporate and business strategies being pursued. True or False
The reduction in per-unit costs that occurs as an organization gains experience producing a product or service is known as economies of scale. Economies of scale is one of the contributing factors to
The purchasing department in a low-cost business should always purchase raw materials at the lowest possible cost. True or False
The HR department in a low-cost business should always attempt to hire managers and workers at pay rates below those of their competitors. True or False
A key characteristic of an effective IS is its ability to serve and help integrate the other functional areas of the business. True or False
Functional strategies should __________.A. be integrated across the business unit B. support the business strategy C. support the corporate strategy D. all of the above
Which of the following is not part of the marketing strategy?A. pricing B. distribution C. promotion D. none of the above
The experience curve is based on which of the following?A. potential for capital-labor substitutions B. economies of scale C. organizational learning D. all of the above
Efforts directed toward improvements or innovations in the quality or uniqueness of a company’s outputs is known as __________.A. product R & D B. process R & D C. product innovation D. structural
Reducing operational costs by making the production process more efficient is known as __________.A. TQM B. process R & D C. product innovation D. structural innovation
Which of the following is not a characteristic of the JIT approach to inventory?A. JIT is difficult on suppliers.B. JIT reduces inventory costs.C. JIT is less risky than traditional inventory
What is the value chain? How is it useful to strategy formulation?
How do a SWOT analysis and SW/OT matrix help managers in the strategic decision-making process?
What types of alternatives can be generated from a SW/OT matrix?
Should an organization change strategies when performance declines? Explain.
The first step in crafting a strategy is the SWOT analysis.True of False
The value chain is an analytical technique for identifying organizational opportunities and threats. True of False
Opportunities and threats should emanate from the analysis of macroenvironmental and industry forces. True of False
A factor can be both an opportunity and a strength. True of False
Another name for an opportunity is an alternative. True of False
Choosing the “no change” strategy and thereby recommending that the current strategy be continued is the least risky option. True of False
The tool that enables executives to position an organization to take advantage of particular opportunities in the environment while avoiding or minimizing environmental threats is called
The description of activities that comprise the economic performance and capabilities of the firm is known as __________.A. the value chain B. process innovation C. quality assessment D. none of the
To sustain competitive advantage, firms must acquire or develop resources that are __________.A. difficult for competitors to imitate B. long lasting C. difficult for competitors to acquire on the
Physical resources include __________.A. production facilities B. plant locations C. production capacity D. all of the above
Which of the following could not be an example of a weakness?A. product quality B. fierce competition C. human resources D. all of the above
Which type of alternative is always defensive in nature?A. strength-opportunity B. strength-threat C. weakness-opportunity D. weakness-threat
What is the difference between a tall organization and a flat organization? What are the advantages and disadvantages of each?
What forms of organizational structure are available to strategic managers? What are the primary advantages and disadvantages of each?
What is the matrix structure? Why has it become so popular in recent years?
What is corporate restructuring?
Corporate restructuring seeks to improve efficiency and performance through such actions as realigning divisions in the firm, reducing the amount of cash under the discretion of senior executives,
A flat organization is composed of many hierarchical levels and narrow spans of control. True of False
Horizontal structures have fewer managerial levels than vertical structures. True of False
In general, a functional structure tends to be most appropriate for differentiated businesses. True of False
Corporate restructuring can be voluntary or involuntary. True of False
Progressive firms restructure only when firm performance declines. True of False
The formal means by which work is coordinated in an organization is called the __________.A. organizational structure B. organizational culture C. organizational dynamic D. none of the above
An increase in the breadth of an organization’s structure is known as __________.A. centralization B. decentralization C. horizontal growth D. vertical growth
Which of the following structures tends to be the most centralized?A. functional structure B. product divisional C. geographic divisional structure D. matrix structure
The notion of a profit center is consistent with which form of organizational structure?A. functional structure B. product divisional C. geographic divisional structure D. matrix structure
Which form of organizational structure is actually a combination of two other forms?A. functional structure B. product divisional C. geographic divisional structure D. matrix structure
Which of the following structures tends to be the most decentralized?A. functional structure B. product divisional C. geographic divisional structure D. matrix structure
Give an example of an organization whose culture is appropriate for its strategy. Explain.
Strategies involving mergers and acquisitions are particularly vulnerable to cultural problems. Mergers between two organizations often are easier to accomplish on paper than in reality. Reality may
Explain transformational and transactional leadership styles, and give examples of each. Identify the conditions under which each is likely to be effective.
To what extent can leaders institute change in their organizations? Practically speaking, how is this accomplished?
Organizational culture can facilitate or hinder the firm’s strategic actions. True or False
Because each organization develops its own unique culture, even organizations within the same industry and city will exhibit distinctly different ways of functioning. True or False
Transactional leaders inspire involvement in a mission, giving followers a “dream” or “vision” of a higher calling. True or False
Most effective leaders exhibit traits associated with both transformational and transactional leadership styles. True or False
Because environments have become less predictable in recent years, a transformational leadership style may be most appropriate for the majority of firms. True or False
The first step in initiating strategic change is to create a shared vision.True or False
Deeply rooted values and ways of thinking that regulate firm behavior characterize __________.A. a strong culture B. a weak culture C. the organizational culture D. none of the above
A lack of values and ways of thinking in a firm characterize __________.A. strong culture B. weak culture C. organizational culture D. none of the above
In general, an organizational culture __________.A. cannot be changed B. can only be changed by a transformational leader C. can be changed easily if proper procedures are followed D. none of the
The unconscious reference to one’s own cultural values as a standard of judgment is known as __________.A. emotional intelligence B. the self-reference criterion C. global awareness D. none of the
One’s collection of psychological attributes, such as motivation, empathy, self-awareness, and social skills is known as __________.A. emotional intelligence B. leadership traits C. leadership
Top-down change efforts __________.A. are not always successful B. can be augmented through employee participation C. are not necessarily more effective than bottom-up efforts D. all of the above
What are the five steps in the strategic control process?
Why is it critical to identify the appropriate strategic control standards for a firm?
Should corrective action always be taken when performance falls below the predetermined standard?Likewise, should corrective action never be taken when performance meets or exceeds the predetermined
Explain how competitive benchmarking is used in strategic control. What are some commonly used competitive benchmarks?
What is crisis management, and why is it important?
Strategic control should be ongoing and occur throughout the strategic management process. True or False
The PIMS program is a government-sponsored effort to improve strategic planning effectiveness in the United States. True or False
Corrective action should usually, but not always, be taken at all levels if actual performance is less than the standard that has been established. True or False
Strategic control can be exerted through either the formal or informal organization. True or False
Crisis management refers to efforts made to eliminate the possibility that the organization can be affected negatively by unforeseen events. True or False
Crisis management involves a series of steps that can be taken before a crisis occurs, while it is occurring, and after it has passed. True or False
Strategic control is important because __________.A. it is difficult to know how well the firm is performing without it B. the organization’s environment is uncertain and always changing C.
The strategic control process begins by __________.A. identifying appropriate performance measures B. establishing benchmarks C. measuring performance D. taking corrective action as needed
The process of measuring a firm’s performance against that of the top performers, usually in the same industry, is known as __________.A. competitive positioning B. performance measurement C.
Sources of published information for strategic control available to the public include all of the following except __________.A. the Wall Street Journal B. Consumer Reports C. PIMS data D. many trade
Benchmarks should be __________.A. broad, not specific B. associated with the strategy’s success C. outside the firm’s control D. all of the above

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