Strategic Management and Business Policy, 14e (Wheelen)
Chapter 1 Basic Concepts in Strategic Management
1) Strategic management is the set of managerial decisions that determines the short-term
performance of a corporation.
Answer: FALSE
Difficulty: Easy
Chapter Objective: Understand the benefits of strategic management
2) In the externally oriented planning phase, plans are developed by heavily involving the
input of managers from lower levels.
Answer: FALSE
Difficulty: Moderate
Chapter Objective: Understand the benefits of strategic management
3) General Electric led the transition from strategic planning to strategic management
during the 1980s.
Answer: TRUE
Difficulty: Easy
Chapter Objective: Understand the benefits of strategic management
4) One of the benefits of strategic management is a clearer sense of strategic vision for
the firm.
Answer: TRUE
Difficulty: Moderate
Chapter Objective: Understand the benefits of strategic management
5) To be effective, strategic management must be a formal process.
Answer: FALSE
Difficulty: Difficult
Chapter Objective: Understand the benefits of strategic management
,6) Globalization is the integrated internationalization of markets and corporations.
Answer: TRUE
Difficulty: Easy
Chapter Objective: Explain how globalization and environmental sustainability influence
strategic management
7) As more industries become global, strategic management is becoming less important
in positioning a company for long-term competitive advantage.
Answer: FALSE
Difficulty: Moderate
Chapter Objective: Explain how globalization and environmental sustainability influence
strategic management
8) Sustainability reflects business practices to manage the firm's triple bottom line.
Answer: TRUE
Difficulty: Moderate
Chapter Objective: Explain how globalization and environmental sustainability influence
strategic management
AACSB: Ethical Understanding and Reasoning
9) One member of the European Union (EU) is Chile.
Answer: FALSE
Difficulty: Moderate
Chapter Objective: Explain how globalization and environmental sustainability influence
strategic management
10) The goal of NAFTA is complete economic integration.
Answer: FALSE
Difficulty: Moderate
,Chapter Objective: Explain how globalization and environmental sustainability influence
strategic management
11) Climate change has become a growing concern for businesses to include in their
corporate strategies.
Answer: TRUE
Difficulty: Moderate
Chapter Objective: Explain how globalization and environmental sustainability influence
strategic management
AACSB: Ethical Understanding and Reasoning
12) Knowing a company is mindful of its impact on the environment seldom changes
consumer buying habits.
Answer: FALSE
Difficulty: Moderate
Chapter Objective: Explain how globalization and environmental sustainability influence
strategic management
13) A Gallop study reported that companies that focused on business sustainability had
3.9 times the EPS growth rates as compared to organizations that did not focus on
business sustainability.
Answer: TRUE
Difficulty: Difficult
Chapter Objective: Explain how globalization and environmental sustainability influence
strategic management
14) Population ecology is a theory that proposes organizations can and do adapt to
change by imitating other successful organizations.
Answer: FALSE
Difficulty: Easy
Chapter Objective: Explain how globalization and environmental sustainability influence
strategic management
, 15) According to organizational learning theory, an organization uses knowledge to
improve the fit between itself and its environment.
Answer: TRUE
Difficulty: Moderate
Chapter Objective: Explain how globalization and environmental sustainability influence
strategic management
16) Strategic flexibility is the ability to shift from one dominant strategy to another.
Answer: TRUE
Difficulty: Easy
Chapter Objective: Explain how globalization and environmental sustainability influence
strategic management
17) One tenet of the learning organization is to maintain stability.
Answer: FALSE
Difficulty: Moderate
Chapter Objective: Explain how globalization and environmental sustainability influence
strategic management
18) The internal environment includes the variables that are within the short-run control
of top management.
Answer: FALSE
Difficulty: Moderate
Chapter Objective: Understand the basic model of strategic management and its
components
19) A broad mission statement may limit the scope of a firm's activities in terms of the
product or service offered.
Answer: FALSE
Difficulty: Difficult
Learning Obj.: Discuss the function of vision statements, mission statements, and long-
term Chapter Objective: Understand the basic model of strategic management and its
components
Chapter 1 Basic Concepts in Strategic Management
1) Strategic management is the set of managerial decisions that determines the short-term
performance of a corporation.
Answer: FALSE
Difficulty: Easy
Chapter Objective: Understand the benefits of strategic management
2) In the externally oriented planning phase, plans are developed by heavily involving the
input of managers from lower levels.
Answer: FALSE
Difficulty: Moderate
Chapter Objective: Understand the benefits of strategic management
3) General Electric led the transition from strategic planning to strategic management
during the 1980s.
Answer: TRUE
Difficulty: Easy
Chapter Objective: Understand the benefits of strategic management
4) One of the benefits of strategic management is a clearer sense of strategic vision for
the firm.
Answer: TRUE
Difficulty: Moderate
Chapter Objective: Understand the benefits of strategic management
5) To be effective, strategic management must be a formal process.
Answer: FALSE
Difficulty: Difficult
Chapter Objective: Understand the benefits of strategic management
,6) Globalization is the integrated internationalization of markets and corporations.
Answer: TRUE
Difficulty: Easy
Chapter Objective: Explain how globalization and environmental sustainability influence
strategic management
7) As more industries become global, strategic management is becoming less important
in positioning a company for long-term competitive advantage.
Answer: FALSE
Difficulty: Moderate
Chapter Objective: Explain how globalization and environmental sustainability influence
strategic management
8) Sustainability reflects business practices to manage the firm's triple bottom line.
Answer: TRUE
Difficulty: Moderate
Chapter Objective: Explain how globalization and environmental sustainability influence
strategic management
AACSB: Ethical Understanding and Reasoning
9) One member of the European Union (EU) is Chile.
Answer: FALSE
Difficulty: Moderate
Chapter Objective: Explain how globalization and environmental sustainability influence
strategic management
10) The goal of NAFTA is complete economic integration.
Answer: FALSE
Difficulty: Moderate
,Chapter Objective: Explain how globalization and environmental sustainability influence
strategic management
11) Climate change has become a growing concern for businesses to include in their
corporate strategies.
Answer: TRUE
Difficulty: Moderate
Chapter Objective: Explain how globalization and environmental sustainability influence
strategic management
AACSB: Ethical Understanding and Reasoning
12) Knowing a company is mindful of its impact on the environment seldom changes
consumer buying habits.
Answer: FALSE
Difficulty: Moderate
Chapter Objective: Explain how globalization and environmental sustainability influence
strategic management
13) A Gallop study reported that companies that focused on business sustainability had
3.9 times the EPS growth rates as compared to organizations that did not focus on
business sustainability.
Answer: TRUE
Difficulty: Difficult
Chapter Objective: Explain how globalization and environmental sustainability influence
strategic management
14) Population ecology is a theory that proposes organizations can and do adapt to
change by imitating other successful organizations.
Answer: FALSE
Difficulty: Easy
Chapter Objective: Explain how globalization and environmental sustainability influence
strategic management
, 15) According to organizational learning theory, an organization uses knowledge to
improve the fit between itself and its environment.
Answer: TRUE
Difficulty: Moderate
Chapter Objective: Explain how globalization and environmental sustainability influence
strategic management
16) Strategic flexibility is the ability to shift from one dominant strategy to another.
Answer: TRUE
Difficulty: Easy
Chapter Objective: Explain how globalization and environmental sustainability influence
strategic management
17) One tenet of the learning organization is to maintain stability.
Answer: FALSE
Difficulty: Moderate
Chapter Objective: Explain how globalization and environmental sustainability influence
strategic management
18) The internal environment includes the variables that are within the short-run control
of top management.
Answer: FALSE
Difficulty: Moderate
Chapter Objective: Understand the basic model of strategic management and its
components
19) A broad mission statement may limit the scope of a firm's activities in terms of the
product or service offered.
Answer: FALSE
Difficulty: Difficult
Learning Obj.: Discuss the function of vision statements, mission statements, and long-
term Chapter Objective: Understand the basic model of strategic management and its
components
