, Contemporary Strategy Analysis 10e
TEST BANK: CHAPTER 1
The Concept of Strategy
True or False Questions
1. Strategy is a unifying theme that gives coherence and direction to the actions and decisions of an
organization.
[See p.4]
a. T*
b. F
2. The successful careers of both Queen Elizabeth II and Lady Gaga may be attributed to their
commitment to systematic strategic planning
[See p.5]
a. T
b. F*
3. A key component of an effective strategy is clear, consistent, long-term goals.
[See pp.5-6]
*a. T
b. F
4. If a firm can devise a brilliant strategy, it will be successful irrespective of how effectively it is
implemented.
[See p.5]
a. T
*b. F
5. A major problem of using SWOT analyses in distinguishing strengths from weaknesses and
opportunities from threats.
[See p.10]
*a. T
b. F
6. “Strategic fit” refers 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]
*a. T
b. F
7. Contingency theory postulates that a firm’s strategy must to flexible in order to meet any possible
contingency.
[See pp.10-11]
a. T
*b. F
8. Strategy denotes an overall plan whereas a tactic is a scheme for a specific action.
[See p.11]
*a. T
b. F
9. The principles of military strategy are rarely applicable to business situations.
,[See pp.11-12]
a. T
*b. F
10. Strategic decisions are important, involve a significant commitment of resources, and should be easily
reversible.
[See p.11]
a. T
*b. F
11. Game theory is a useful for studying competitive behavior in politics, military campaigns and
international relations, but it cannot be used to analyze business strategies.
[See p.12]
a. T
*b. F
12. The main factor causing the transition from corporate planning to strategic management was the
increasing inability of companies to forecast economic conditions four or five years into the future.
[See p.12]
*a. T
b. F
13. Strategy is a detailed plan that programs the actions of an organization or an individual.
[See pp.14-15]
a. T
*b. F
14. Strategic choices involve two basic questions: where and how to compete?
[See p.18]
*a. T
b. F
15. In the large, complex firm, two main levels of strategy can be distinguished: corporate strategy and
business (or competitive) strategy.
[See pp.18-19]
*a. T
b. F
16. 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 pp.19-20]
a. T
*b. F
17. 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 pp.20-21]
*a. T
b. F
18. According to Henry Mintzberg, firm strategy should be formulated by top management through rational
deliberation utilizing all available data.
[See p.21]
a. T
*b. F
19. 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]
*a. T
b. F
20. 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]
a. T
*b. F
21. 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]
a. T
*b. F
Multiple Choice Questions
1. The primary purpose of strategy is:
[See p.4]
a. To maximize shareholder value
*b. To achieve success
c. To ensure that all stakeholders benefit from the value created by the firm
d. To be a responsible corporate citizen
2. The successful careers of both Queen Elizabeth II and Lady Gaga may be attributed to the fact that
both:
[See pp.4-8]
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.
3. For both individuals and businesses, successful strategies are characterized by:
[See p.5]
a. Unrelenting commitment to ambitious goals
*b. Clear goals, understanding their competitive environment, awareness of internal strengths and
weaknesses, and effective implementation
c. Meticulous planning
d. Possessing superior resources that are deployed to build competitive advantage.
4. Strategic goals should be:
[See pp.5-9]
a. Simple
b. Consistent
c. Long term
*d. All of the above
5. The main problem of SWOT as a framework for strategy analysis is that:
[See p.10]
*a. Distinguishing opportunities from threats and strengths from weaknesses is often difficult
b. It has now been superseded by more sophisticated analytical frameworks
c. It is focused on strategy formulation and fails to take account of strategy implementation
TEST BANK: CHAPTER 1
The Concept of Strategy
True or False Questions
1. Strategy is a unifying theme that gives coherence and direction to the actions and decisions of an
organization.
[See p.4]
a. T*
b. F
2. The successful careers of both Queen Elizabeth II and Lady Gaga may be attributed to their
commitment to systematic strategic planning
[See p.5]
a. T
b. F*
3. A key component of an effective strategy is clear, consistent, long-term goals.
[See pp.5-6]
*a. T
b. F
4. If a firm can devise a brilliant strategy, it will be successful irrespective of how effectively it is
implemented.
[See p.5]
a. T
*b. F
5. A major problem of using SWOT analyses in distinguishing strengths from weaknesses and
opportunities from threats.
[See p.10]
*a. T
b. F
6. “Strategic fit” refers 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]
*a. T
b. F
7. Contingency theory postulates that a firm’s strategy must to flexible in order to meet any possible
contingency.
[See pp.10-11]
a. T
*b. F
8. Strategy denotes an overall plan whereas a tactic is a scheme for a specific action.
[See p.11]
*a. T
b. F
9. The principles of military strategy are rarely applicable to business situations.
,[See pp.11-12]
a. T
*b. F
10. Strategic decisions are important, involve a significant commitment of resources, and should be easily
reversible.
[See p.11]
a. T
*b. F
11. Game theory is a useful for studying competitive behavior in politics, military campaigns and
international relations, but it cannot be used to analyze business strategies.
[See p.12]
a. T
*b. F
12. The main factor causing the transition from corporate planning to strategic management was the
increasing inability of companies to forecast economic conditions four or five years into the future.
[See p.12]
*a. T
b. F
13. Strategy is a detailed plan that programs the actions of an organization or an individual.
[See pp.14-15]
a. T
*b. F
14. Strategic choices involve two basic questions: where and how to compete?
[See p.18]
*a. T
b. F
15. In the large, complex firm, two main levels of strategy can be distinguished: corporate strategy and
business (or competitive) strategy.
[See pp.18-19]
*a. T
b. F
16. 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 pp.19-20]
a. T
*b. F
17. 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 pp.20-21]
*a. T
b. F
18. According to Henry Mintzberg, firm strategy should be formulated by top management through rational
deliberation utilizing all available data.
[See p.21]
a. T
*b. F
19. 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]
*a. T
b. F
20. 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]
a. T
*b. F
21. 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]
a. T
*b. F
Multiple Choice Questions
1. The primary purpose of strategy is:
[See p.4]
a. To maximize shareholder value
*b. To achieve success
c. To ensure that all stakeholders benefit from the value created by the firm
d. To be a responsible corporate citizen
2. The successful careers of both Queen Elizabeth II and Lady Gaga may be attributed to the fact that
both:
[See pp.4-8]
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.
3. For both individuals and businesses, successful strategies are characterized by:
[See p.5]
a. Unrelenting commitment to ambitious goals
*b. Clear goals, understanding their competitive environment, awareness of internal strengths and
weaknesses, and effective implementation
c. Meticulous planning
d. Possessing superior resources that are deployed to build competitive advantage.
4. Strategic goals should be:
[See pp.5-9]
a. Simple
b. Consistent
c. Long term
*d. All of the above
5. The main problem of SWOT as a framework for strategy analysis is that:
[See p.10]
*a. Distinguishing opportunities from threats and strengths from weaknesses is often difficult
b. It has now been superseded by more sophisticated analytical frameworks
c. It is focused on strategy formulation and fails to take account of strategy implementation
