Strategic Management Final Exam Ques ons and
answers Updated RATED A+ 2026
The principal driver(s) of shareholder value is (are)
A) profitability.
B) profit growth.
C) market share.
D) profitability and profit growth.
E) all of the above
d. Profitability and Profit Growth
A compe$$ve advantage is considered to be a sustained compe$$ve advantage when the
A) advantage endures for a long $me.
B) firm is able to spread the advantage to all of its business units.
C) advantage is very large.
D) advantage was gained at a low cost.
E) managers who developed the advantage are s$ll employed at the firm.
a. Advantage endures for a long $me
Within a diversified company, the responsibili$es of corporate-level strategic managers include
A) transla$ng the corporate mission statement into concrete strategies for individual business
units.
B) closely supervising the formula$on of strategies at the func$onal level that support the
company's business- and corporate-level strategies.
C) alloca$ng resources to func$ons within business units.
D) overseeing the development of strategies for the total organiza$on and alloca$ng resources
among its different business areas.
E) iden$fying and establishing rela$onships with supplier firms.
d. Overseeing the development of strategies for the total organiza$on and alloca$ng resources
among its different business areas
Profit growth is best measured
A) by the increase in shareholder value.
B) by the return on investment.
C) month by month.
D) over $me.
E) by increases in liquidity.
,d. Over Time
Func$onal managers
A) are responsible for the specific business func$ons or opera$ons that cons$tute a company or
one of its divisions.
B) look at the overall picture of a corpora$on.
C) have no strategic role.
D) formulate generic strategies.
E) execute business-level decisions
a. Are responsible for the specific business func$ons or opera$ons that cons$tute a company or
one of its divisions
The first step in the strategic management process is
A) defining the mission and major goals of the organiza$on.
B) analyzing the macroenvironment.
C) analyzing the industry environment.
D) determining the firm's strengths and weaknesses.
E) deciding on a fit between the organiza$on's strengths and weaknesses and the environment's
opportuni$es and threats.
a. Defining the mission and major goals of the organiza$on
Strategy formula$on refers to the
A) task of designing organiza$onal structures and control systems.
B) process by which strategies are put into ac$on.
C) top-down planning process that gives rise to the implementa$on of emergent strategies.
D) task of analyzing an organiza$on's external and internal environment and then selec$ng an
appropriate strategy.
E) process of choosing a realized strategy.
d. Task of analyzing an organiza$ons external and internal environment and then selec$ng an
appropriate strategy
Maximizing shareholder value is
A) a byproduct of a company's cost reduc$on programs.
B) not generally a viable goal for a company.
C) not the responsibility of a company's managers.
D) the ul$mate goal of profit-making companies.
E) not required to a2ract risk capital.
d. The ul$mate goal of profit making companies
,Aaron planned to cut prices at his bicycle shop, but when a compe$ng shop began to offer free
repairs, Aaron decided to copy them. Aaron's new strategy (offer free repairs) is an example of
a(n)
A) mistake.
B) emergent strategy.
C) deliberate strategy.
D) intended strategy.
E) unrealized strategy.
b. Emergent Strategy
The scenario approach to strategic planning involves
A) devising strategies for coping with a number of different possible future states of the world.
B) homing in on a single predic$on of future demand condi$ons using an itera$ve planning
process.
C) func$onal managers se3ng key corporate objec$ves.
D) using computers to build virtual worlds for top-level managers.
E) making planning the exclusive domain of top-level managers
a. Devising strategies for coping with a number of different possible future states of the world
An effec$ve business model
A) involves how a company selects its customers.
B) creates value for its customers.
C) achieves and sustains a high level of profitability.
D) produces goods and services.
E) all of the above.
e. All of the above
Which of the following cogni$ve biases occurs when decisionmakers commit even more
resources if they receive feedback that the project is failing?
A) Prior hypothesis bias
B) Reasoning by analogy
C) Illusion of control
D) Escala$ng commitment
E) Representa$veness
d. Escala$ng Commitment
Which of the following cogni$ve biases refers to the fact that decisionmakers who have strong
prior beliefs about the rela$onship between two variables tend to make decisions on the basis
, of these beliefs, even when presented with evidence that their beliefs are wrong?
A) Prior hypothesis bias
B) Reasoning by analogy
C) Illusion of control
D) Escala$ng commitment
E) Representa$veness
a. Prior Hypothesis Basis
The role of corporate-level managers is to
A) define opera$onal-level strategies.
B) outline func$onal-level strategies and plans.
C) oversee the development of strategies for the whole organiza$on.
D) develop business-level strategies
E) oversee the development of business-level and func$onal-level strategies.
c. Oversee the development of strategies for the whole organiza$on
Feelings of personal responsibility for a project are most likely to lead to
A) prior hypothesis biases.
B) escala$ng commitment.
C) reasoning by analogy.
D) representa$veness.
E) groupthink.
b. Escala$ng Commitment
Groupthink occurs when a group of decisionmakers
A) engages in a brainstorming session designed to produce strategic op$ons.
B) deliberately a2empts to bring cri$cal informa$on to bear on the strategic decision process.
C) coalesces around commitment to a person or a policy for emo$onal rather than ra$onal
reasons.
D) uses a devil's advocate appro/ach to ques$on strategic assump$ons.
E) is composed of experts in the decision they are facing.
a. Engages in a brainstorming session designed to produce strategic op$ons
Which of the following is not a characteris$c of well-constructed goals?
A) They are precise and measurable.
B) They are the result of a group decision process.
C) They specify a $me period.
answers Updated RATED A+ 2026
The principal driver(s) of shareholder value is (are)
A) profitability.
B) profit growth.
C) market share.
D) profitability and profit growth.
E) all of the above
d. Profitability and Profit Growth
A compe$$ve advantage is considered to be a sustained compe$$ve advantage when the
A) advantage endures for a long $me.
B) firm is able to spread the advantage to all of its business units.
C) advantage is very large.
D) advantage was gained at a low cost.
E) managers who developed the advantage are s$ll employed at the firm.
a. Advantage endures for a long $me
Within a diversified company, the responsibili$es of corporate-level strategic managers include
A) transla$ng the corporate mission statement into concrete strategies for individual business
units.
B) closely supervising the formula$on of strategies at the func$onal level that support the
company's business- and corporate-level strategies.
C) alloca$ng resources to func$ons within business units.
D) overseeing the development of strategies for the total organiza$on and alloca$ng resources
among its different business areas.
E) iden$fying and establishing rela$onships with supplier firms.
d. Overseeing the development of strategies for the total organiza$on and alloca$ng resources
among its different business areas
Profit growth is best measured
A) by the increase in shareholder value.
B) by the return on investment.
C) month by month.
D) over $me.
E) by increases in liquidity.
,d. Over Time
Func$onal managers
A) are responsible for the specific business func$ons or opera$ons that cons$tute a company or
one of its divisions.
B) look at the overall picture of a corpora$on.
C) have no strategic role.
D) formulate generic strategies.
E) execute business-level decisions
a. Are responsible for the specific business func$ons or opera$ons that cons$tute a company or
one of its divisions
The first step in the strategic management process is
A) defining the mission and major goals of the organiza$on.
B) analyzing the macroenvironment.
C) analyzing the industry environment.
D) determining the firm's strengths and weaknesses.
E) deciding on a fit between the organiza$on's strengths and weaknesses and the environment's
opportuni$es and threats.
a. Defining the mission and major goals of the organiza$on
Strategy formula$on refers to the
A) task of designing organiza$onal structures and control systems.
B) process by which strategies are put into ac$on.
C) top-down planning process that gives rise to the implementa$on of emergent strategies.
D) task of analyzing an organiza$on's external and internal environment and then selec$ng an
appropriate strategy.
E) process of choosing a realized strategy.
d. Task of analyzing an organiza$ons external and internal environment and then selec$ng an
appropriate strategy
Maximizing shareholder value is
A) a byproduct of a company's cost reduc$on programs.
B) not generally a viable goal for a company.
C) not the responsibility of a company's managers.
D) the ul$mate goal of profit-making companies.
E) not required to a2ract risk capital.
d. The ul$mate goal of profit making companies
,Aaron planned to cut prices at his bicycle shop, but when a compe$ng shop began to offer free
repairs, Aaron decided to copy them. Aaron's new strategy (offer free repairs) is an example of
a(n)
A) mistake.
B) emergent strategy.
C) deliberate strategy.
D) intended strategy.
E) unrealized strategy.
b. Emergent Strategy
The scenario approach to strategic planning involves
A) devising strategies for coping with a number of different possible future states of the world.
B) homing in on a single predic$on of future demand condi$ons using an itera$ve planning
process.
C) func$onal managers se3ng key corporate objec$ves.
D) using computers to build virtual worlds for top-level managers.
E) making planning the exclusive domain of top-level managers
a. Devising strategies for coping with a number of different possible future states of the world
An effec$ve business model
A) involves how a company selects its customers.
B) creates value for its customers.
C) achieves and sustains a high level of profitability.
D) produces goods and services.
E) all of the above.
e. All of the above
Which of the following cogni$ve biases occurs when decisionmakers commit even more
resources if they receive feedback that the project is failing?
A) Prior hypothesis bias
B) Reasoning by analogy
C) Illusion of control
D) Escala$ng commitment
E) Representa$veness
d. Escala$ng Commitment
Which of the following cogni$ve biases refers to the fact that decisionmakers who have strong
prior beliefs about the rela$onship between two variables tend to make decisions on the basis
, of these beliefs, even when presented with evidence that their beliefs are wrong?
A) Prior hypothesis bias
B) Reasoning by analogy
C) Illusion of control
D) Escala$ng commitment
E) Representa$veness
a. Prior Hypothesis Basis
The role of corporate-level managers is to
A) define opera$onal-level strategies.
B) outline func$onal-level strategies and plans.
C) oversee the development of strategies for the whole organiza$on.
D) develop business-level strategies
E) oversee the development of business-level and func$onal-level strategies.
c. Oversee the development of strategies for the whole organiza$on
Feelings of personal responsibility for a project are most likely to lead to
A) prior hypothesis biases.
B) escala$ng commitment.
C) reasoning by analogy.
D) representa$veness.
E) groupthink.
b. Escala$ng Commitment
Groupthink occurs when a group of decisionmakers
A) engages in a brainstorming session designed to produce strategic op$ons.
B) deliberately a2empts to bring cri$cal informa$on to bear on the strategic decision process.
C) coalesces around commitment to a person or a policy for emo$onal rather than ra$onal
reasons.
D) uses a devil's advocate appro/ach to ques$on strategic assump$ons.
E) is composed of experts in the decision they are facing.
a. Engages in a brainstorming session designed to produce strategic op$ons
Which of the following is not a characteris$c of well-constructed goals?
A) They are precise and measurable.
B) They are the result of a group decision process.
C) They specify a $me period.
