46 Free Test Bank for Essentials of Strategic Management The Quest for Competitive Advantage 3rd Edition Gamble

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Top management's views about where the company is headed and what its future product-customer-market-technology will be

•  A. indicates what kind of business model the company is going to have in the future.
•  B. constitutes the strategic vision for the company.
•  C. signals what the firm's strategy will be.
•  D. serves to define the company's mission.
•  E. indicates what the company's long-term strategic plan is.

A company's mission statement typically addresses which of the following questions?

•  A. Who we are, what we do, and why we are here
•  B. What objectives and level of performance do we want to achieve?
•  C. Where are we going and what should our strategy be?
•  D. What approach should we take to achieve sustainable competitive advantage?
•  E. What business model should we employ to achieve our objectives and our vision?

The obligations of an investor-owned company's board of directors in the strategy-making, strategy-executing process include

•  A. coming up with compelling strategy proposals to debate against those put forward by top management.
•  B. taking the lead in formulating the company's strategic plan but then delegating the task of implementing and executing the strategic plan to the company's CEO and other senior executives.
•  C. taking the lead in developing the company's business model and strategic vision.
•  D. overseeing the company's financial accounting and financial reporting practices and evaluating the caliber of senior executives' strategy-making/strategy-executing skills.
•  E. approving the company's operating strategies, functional-area strategies, business strategy, and overall corporate strategy.

Strategic objectives

•  A. are more essential in achieving a company's strategic vision than are financial objectives.
•  B. are generally less important than financial objectives.
•  C. are more difficult to achieve and harder to measure than financial objectives.
•  D. relate to strengthening a company's overall market standing and competitive vitality.
•  E. help managers track an organization's true progress better than do financial objectives.

Which of the following is not a common shortcoming of company vision statements?

•  A. Vague or incomplete—short on specifics
•  B. Focused and narrow—exclusive to a specific direction
•  C. Bland or uninspiring
•  D. Not distinctive—could apply to most any company (or at least several others in the same industry)
•  E. Too reliant on superlatives (best, most successful, recognized leader, global or worldwide leader, first choice of customers)

Well-conceived visions are

•  A. distinctive.
•  B. specific to a particular organization.
•  C. free of generic, feel-good statements.
•  D. not innocuous one-sentence statements.
•  E. All of these.

Business strategy concerns

•  A. strengthening the company's market position and building competitive advantage.
•  B. ensuring consistency in strategic approach among the businesses of a diversified company.
•  C. selecting a business model to use in pursuing business objectives.
•  D. selecting a set of financial and strategic objectives for a particular line of business.
•  E. choosing appropriate internal business processes for a specific line of business.

A company needs financial objectives

•  A. to overtake key competitors on such important measures as net profit margins and return on investment.
•  B. because without adequate profitability and financial strength, the company's ultimate survival is jeopardized.
•  C. to indicate to employees that financial objectives always take precedence over strategic objectives.
•  D. to convince shareholders that top management is acting in their interests.
•  E. to translate the company's business model into action items.

The strategy-making, strategy-executing process

•  A. is usually delegated to members of a company's board of directors so as not to infringe on the time of busy executives.
•  B. includes establishing a company's mission, developing a business model aimed at making the company an industry leader, and crafting a strategy to implement and execute the business model.
•  C. embraces the tasks of developing a strategic vision, setting objectives, crafting a strategy, implementing and executing the strategy, and then monitoring developments and initiating corrective adjustments in light of experience, changing conditions, and new opportunities.
•  D. is principally concerned with sizing up an organization's internal and external situation, so as to be prepared for the challenge of developing a sound business model.
•  E. is primarily the responsibility of top executives and the board of directors; very few managers below this level are involved.

A balanced scorecard that includes both strategic and financial performance targets is a conceptually strong approach for judging a company's overall performance because

•  A. financial performance measures are lagging indicators that reflect the results of past decisions and organizational activities whereas strategic performance measures are leading indicators of a company's future financial performance.
•  B. it entails putting equal emphasis on good strategy execution and good business model execution.
•  C. a balanced scorecard approach pushes managers to avoid setting objectives that reflect the results of past decisions and organizational activities and, instead, to set objectives that will serve as leading indicators of a company's future financial performance.
•  D. it assists managers in putting roughly equal emphasis on short-term and long-term performance targets.
•  E. it more or less forces managers to put equal emphasis on financial and strategic objectives.

The primary roles/obligations of a company's board of directors in the strategy-making, strategy-executing process include

•  A. playing the lead role in forming the company's strategy and then directly supervising the efforts and actions of senior executives in implementing and executing the strategy.
•  B. providing guidance and counsel to the CEO in carrying out his/her duties as chief strategist and chief strategy implementer.
•  C. overseeing the company's financial accounting and reporting practices, evaluating the caliber of senior executives' strategy-making and strategy-executing skills, and instituting a compensation plan that rewards top executives for results that serve shareholder interests.
•  D. working closely with the CEO, senior executives, and the strategic planning staff to develop a strategic plan for the company.
•  E. reviewing and approving the company's business model and also reviewing and approving the proposals and recommendations of the CEO as to how to execute the business model.

Which one of the following is not an accurate attribute of an organization's strategic vision?

•  A. A clearly articulated view of "where we are going"
•  B. Describing the company's future product-customer-market-technology focus
•  C. Pointing an organization in a particular direction and charting a strategic path for it to follow
•  D. Providing managers with a reference point for making strategic decisions
•  E. Outlining how the company intends to implement and execute its business model

Which one of the following is not one of the five stages of the strategic management process?

•  A. Forming a strategic vision of the company's future direction and focus
•  B. Setting objectives to measure progress toward achieving the strategic vision
•  C. Crafting a strategy to achieve the objectives and get the company where it wants to go
•  D. Developing a profitable business model
•  E. Implementing and executing the chosen strategy efficiently and effectively

Effectively communicating the strategic vision down the line to lower-level managers and employees has the value of

•  A. not only explaining "where we are going and why" but, more importantly, also inspiring and energizing company personnel to unite to get the company moving in the intended direction.
•  B. helping company personnel understand why "making a profit" is so important.
•  C. making it easier for top executives to set strategic objectives.
•  D. helping lower-level managers and employees better understand the company's business model.
•  E. All of these.

A company's values concern

•  A. whether and to what extent it intends to operate in an ethical and socially responsible manner.
•  B. how aggressively it will seek to maximize profits and enforce high ethical standards.
•  C. the beliefs and operating principles built into the company's "balanced scorecard" for measuring performance.
•  D. the beliefs, traits, and behavioral norms that company personnel are expected to display in conducting the company's business and pursuing its strategic vision and mission.
•  E. the beliefs, principles, and ethical standards that are incorporated into the company's strategic intent and business model.

Management is obligated to monitor new external developments, evaluate the company's progress, and make corrective adjustments in order to

•  A. determine whether the company has a balanced scorecard for judging its performance.
•  B. decide whether to continue or change the company's strategic vision, objectives, strategy and/or strategy execution methods.
•  C. determine what changes should be made to its customer value proposition.
•  D. determine whether the company's business model is well matched to changing market and competitive circumstances.
•  E. stay on track in achieving the company's mission and strategic vision.

The strategic management process is shaped by

•  A. management's strategic vision, strategic and financial objectives, and strategy.
•  B. the decisions made by the compensation and audit committees of the board of directors.
•  C. external factors such as the industry's economic and competitive conditions and internal factors such as the company's collection of resources and capabilities.
•  D. a company's customer value proposition and profit formula.
•  E. actions to strengthen competitive capabilities and correct weaknesses, actions to strengthen market standing and competitiveness by acquiring or merging with other companies, and actions to enter new geographic or product markets.

A company's values relate to such things as

•  A. how it will balance its pursuit of financial objectives against the pursuit of its strategic objectives.
•  B. how it will balance the pursuit of its business purpose/mission against the pursuit of its strategic vision.
•  C. fair treatment, integrity, ethical behavior, innovativeness, teamwork, top-notch quality, superior customer service, social responsibility, and community citizenship.
•  D. whether it will emphasize stock price appreciation or higher dividend payments to shareholders, and whether it will put more emphasis on the achievement of short-term performance targets or long-range performance targets.
•  E. All of the above.

When companies adopt the strategy-making and strategy execution process it requires they start by

•  A. developing a strategic vision, mission and values
•  B. developing a proven business model, deciding on the company's top management team, and crafting a strategy
•  C. setting objectives, developing a business model, crafting a strategy, and deciding how much of the company's resources to employ in the pursuit of sustainable competitive advantage
•  D. coming up with a statement of the company's mission and communicating it to all employees, setting objectives, selecting a business model, and monitoring developments and initiating corrective adjustments to the business model when necessary
•  E. deciding on the company's board of directors, setting financial objectives, crafting a strategy, and choosing what business approaches and operating practices to employ

Why should long-run objectives take precedence over short-run objectives?

•  A. Focus is placed on improving performance in the near term.
•  B. Long-run objectives are necessary for achieving long-term performance and stand as a barrier to undue focus on short-term results.
•  C. This will satisfy shareholder expectations for progress.
•  D. This will force the company to deliver performance improvement in the current period.
•  E. None of these.