MGT 401 - Strategic Management and Business Policy – Exam - Chapter 1-12 Summery

MGT 401 - Strategic Management and Business Policy – Exam - Chapter 1-12 Summery. 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 pg. 1 Strategic Management and Business Policy (MGT: 401) Chapter 1-12 Summery Saudi Electronic University By: Abdulmunaim Al-Ibrahim 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 pg. 2 Strategic Management and Business Policy (MGT: 401) Chapter 1-12 Summery Saudi Electronic University By: Abdulmunaim Al-Ibrahim 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 AACSB: Application of Knowledge 20) An example of an objective is "increased profitability," while an example of a goal is "to increase the firm's profitability in 2010 by 15% over 2009." Answer: FALSE Difficulty: Difficult Chapter Objective: Understand the basic model of strategic management and its components AACSB: Application of Knowledge 21) A strategy maximizes competitive advantage and minimizes competitive disadvantage. Answer: TRUE Difficulty: Moderate Chapter Objective: Understand the basic model of strategic management and its components pg. 3 Strategic Management and Business Policy (MGT: 401) Chapter 1-12 Summery Saudi Electronic University By: Abdulmunaim Al-Ibrahim 22) Corporate strategy occurs at the business unit or product level. Answer: FALSE Difficulty: Easy Chapter Objective: Understand the basic model of strategic management and its components 23) A functional strategy may include competitive or cooperative strategies. Answer: FALSE Difficulty: Moderate Chapter Objective: Understand the basic model of strategic management and its components 24) A hierarchy of strategy emphasizes the need for the three levels of strategy to complement and support one another. Answer: TRUE Difficulty: Moderate Chapter Objective: Understand the basic model of strategic management and its components 25) A budget is a statement of a corporation's programs in terms of dollars. Answer: TRUE Difficulty: Easy Chapter Objective: Understand the basic model of strategic management and its components 26) Performance results are monitored at the strategy formulation phase of the strategic management process. Answer: FALSE Difficulty: Moderate Chapter Objective: Understand the basic model of strategic management and its components 27) Henry Mintzberg discovered that strategic formulation is a regular, continuous process. Answer: FALSE Difficulty: Moderate Chapter Objective: Identify some common triggering events that act as stimuli for strategic change 28) Punctuated equilibrium describes organizations as evolving through relatively long periods of stability punctuated by relatively short bursts of fundamental change. Answer: TRUE Difficulty: Difficult Chapter Objective: Identify some common triggering events that act as stimuli for strategic change 29) A strategic decision is rare, consequential, and directive. Answer: TRUE Difficulty: Moderate Chapter Objective: Understand strategic decision-making modes pg. 4 Strategic Management and Business Policy (MGT: 401) Chapter 1-12 Summery Saudi Electronic University By: Abdulmunaim Al-Ibrahim 30) Mintzberg's entrepreneurial mode is sometimes referred to as "muddling through" since this decision- making mode tends to be more reactive than proactive in the search for new opportunities. Answer: FALSE Difficulty: Difficult Chapter Objective: Understand strategic decision-making modes 31) Logical incrementalism is a useful decision-making mode when the environment is rapidly changing and when it is important to build consensus. Answer: TRUE Difficulty: Difficult Chapter Objective: Understand strategic decision-making modes AACSB: Reflective Thinking 32) While the strategic audit is not an all-inclusive list, it presents many of the critical questions needed for a detailed strategic analysis of any business. Answer: TRUE Difficulty: Easy Chapter Objective: Use the strategic audit as a method of analyzing corporate functions and activities Multiple Choices 33) The emphasis of strategic management is on A) monitoring and evaluating external opportunities and threats in light of a corporation's strengths and weaknesses. B) first line managers. C) the short-run performance of the corporation. D) an examination of the organization's internal environment. E) an investigation of competitor actions. Answer: A Difficulty: Easy Chapter Objective: Understand the benefits of strategic management 34) Research suggests that strategic management evolves through four sequential phases in corporations. The first phase is A) externally oriented planning. B) basic financial planning. C) internally oriented planning. D) forecast-based planning. E) strategic management. Answer: B