Chapter 12—Strategic Leadership
TRUE/FALSE
1. The average tenure of CEOs has been declining in the past decade.
ANS: T PTS: 1 DIF: Easy REF: 339
OBJ: 12-01 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Environmental Influence |
Dierdorff & Rubin: Managing administration & control
2. Strategic leadership is the ability to anticipate, envision, maintain flexibility, and empower others to
create strategic change as necessary.
ANS: T PTS: 1 DIF: Medium REF: 340
OBJ: 12-01 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Leadership Principles |
Dierdorff & Rubin: Learning, motivation, & leadership
3. The most critical ability of a strategic leader is the ability to manage human capital.
ANS: T PTS: 1 DIF: Easy REF: 341
OBJ: 12-01 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Leadership Principles |
Dierdorff & Rubin: Managing human capital
4. The CEO is the individual with primary responsibility for effective strategic leadership within an
organization.
ANS: T PTS: 1 DIF: Easy REF: 341
OBJ: 12-01 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Leadership Principles |
Dierdorff & Rubin: Learning, motivation, & leadership
5. Transformational leadership is the most effective strategic leadership style.
ANS: T PTS: 1 DIF: Easy REF: 342
OBJ: 12-01 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Leadership Principles |
Dierdorff & Rubin: Learning, motivation, & leadership
6. In order for the strategic leader to survive, he or she needs to make optimal decisions for the
organization.
ANS: F PTS: 1 DIF: Hard REF: 343-344
OBJ: 12-01 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Leadership Principles |
Dierdorff & Rubin: Learning, motivation, & leadership
, 7. In addition to determining new strategic initiatives, top-level managers also develop the appropriate
organizational structure and reward systems of a firm.
ANS: T PTS: 1 DIF: Medium REF: 344
OBJ: 12-02 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Leadership Principles |
Dierdorff & Rubin: Learning, motivation, & leadership
8. The decision making discretion of top-level managers is determined partly by external environmental
factors such as the industry structure, the industry’s rate of growth, and the degree to which
products can be differentiated.
ANS: T PTS: 1 DIF: Medium REF: 344 (Figure 12.2)
OBJ: 12-02 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Environmental Influence |
Dierdorff & Rubin: Managing decision-making processes
9. Firm size, firm age, the executive’s tolerance for ambiguity, and his or her commitment to strategic
outcomes are all factors that may affect managerial discretion.
ANS: T PTS: 1 DIF: Medium REF: 344 (Table 12.2)
OBJ: 12-02 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Environmental Influence |
Dierdorff & Rubin: Managing decision-making processes
10. External environmental factors that may affect managerial discretion include industry structure, rate
of market growth, and degree of product differentiation.
ANS: T PTS: 1 DIF: Hard REF: 344 (Table 12.2)
OBJ: 12-02 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Environmental Influence |
Dierdorff & Rubin: Managing decision-making processes
11. Typically, a vice president would NOT be considered to hold a high enough position to be included in
the top management team of an organization.
ANS: F PTS: 1 DIF: Easy REF: 345
OBJ: 12-02 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Knowledge of general business functions
12. The more heterogeneous and the larger the top management team, the easier it is to implement
strategy effectively.
ANS: F PTS: 1 DIF: Hard REF: 345
OBJ: 12-02 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Group Dynamics | Dierdorff &
Rubin: Managing decision-making processes
,13. The more homogeneous a top management team, the more likely those managers will be innovative
and willing to pursue strategic change.
ANS: F PTS: 1 DIF: Medium REF: 345
OBJ: 12-02 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Group Dynamics | Dierdorff &
Rubin: Managing decision-making processes
14. Compared to homogeneous top management teams, heterogeneous top management teams are
more likely to change their firm's strategies when necessary and to support innovation.
ANS: T PTS: 1 DIF: Medium REF: 345
OBJ: 12-02 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Group Dynamics | Dierdorff &
Rubin: Managing decision-making processes
15. Board members with substantive expertise in the firm’s core functions and businesses aids the
effectiveness of the top management team.
ANS: T PTS: 1 DIF: Hard REF: 345
OBJ: 12-02 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Group Dynamics | Dierdorff &
Rubin: Managing administration & control
16. The CEO of YorkMark, Inc., has an exceptional amount of power in the organization. It is likely the
board of directors is composed of the CEO’s friends from other firms and insiders who report to the
CEO.
ANS: T PTS: 1 DIF: Medium REF: 346
OBJ: 12-02 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Managing administration & control
17. A CEO may gain power by holding the titles of both CEO and Chairman of the Board.
ANS: T PTS: 1 DIF: Easy REF: 346
OBJ: 12-02 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Managing administration & control
18. The experience that results from long tenure in a firm is known to extend the breadth of an
executive’s knowledge base.
ANS: F PTS: 1 DIF: Medium REF: 346-347
OBJ: 12-02 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Managing human capital
19. Internal labor markets consist of the career opportunities for managers within the firm for which they
currently work.
, ANS: T PTS: 1 DIF: Easy REF: 347
OBJ: 12-03 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Managing administration & control
20. Selection of an insider as a new CEO indicates a firm’s desire to encourage innovation and strategic
change.
ANS: F PTS: 1 DIF: Medium REF: 347
OBJ: 12-03 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Strategic & systems skills
21. Employees usually have a strong preference for firms to use the internal managerial labor market
when selecting top management team members and the CEO.
ANS: T PTS: 1 DIF: Easy REF: 348
OBJ: 12-03 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Learning, motivation, & leadership
22. There are no longer barriers for talented women to rise to top management positions because
women such as Catherine Elizabeth Hughes and Carly Fiorina have risen to top positions in prominent
firms.
ANS: F PTS: 1 DIF: Easy REF: 349
OBJ: 12-03 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Learning, motivation, & leadership
23. When a new CEO is selected from outside the firm, a change of strategy is likely, especially if the top
management team is homogenous and highly cohesive.
ANS: F PTS: 1 DIF: Hard REF: 349 (Figure 12.3)
OBJ: 12-03 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Learning, motivation, & leadership
24. The strategic direction of a firm usually focuses on the coming three to five years.
ANS: T PTS: 1 DIF: Medium REF: 350
OBJ: 12-04 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Managing decision-making processes
25. The firm’s core ideology motivates the firm’s employees through the company’s heritage.
ANS: T PTS: 1 DIF: Easy REF: 350
OBJ: 12-04 TYPE: knowledge
TRUE/FALSE
1. The average tenure of CEOs has been declining in the past decade.
ANS: T PTS: 1 DIF: Easy REF: 339
OBJ: 12-01 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Environmental Influence |
Dierdorff & Rubin: Managing administration & control
2. Strategic leadership is the ability to anticipate, envision, maintain flexibility, and empower others to
create strategic change as necessary.
ANS: T PTS: 1 DIF: Medium REF: 340
OBJ: 12-01 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Leadership Principles |
Dierdorff & Rubin: Learning, motivation, & leadership
3. The most critical ability of a strategic leader is the ability to manage human capital.
ANS: T PTS: 1 DIF: Easy REF: 341
OBJ: 12-01 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Leadership Principles |
Dierdorff & Rubin: Managing human capital
4. The CEO is the individual with primary responsibility for effective strategic leadership within an
organization.
ANS: T PTS: 1 DIF: Easy REF: 341
OBJ: 12-01 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Leadership Principles |
Dierdorff & Rubin: Learning, motivation, & leadership
5. Transformational leadership is the most effective strategic leadership style.
ANS: T PTS: 1 DIF: Easy REF: 342
OBJ: 12-01 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Leadership Principles |
Dierdorff & Rubin: Learning, motivation, & leadership
6. In order for the strategic leader to survive, he or she needs to make optimal decisions for the
organization.
ANS: F PTS: 1 DIF: Hard REF: 343-344
OBJ: 12-01 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Leadership Principles |
Dierdorff & Rubin: Learning, motivation, & leadership
, 7. In addition to determining new strategic initiatives, top-level managers also develop the appropriate
organizational structure and reward systems of a firm.
ANS: T PTS: 1 DIF: Medium REF: 344
OBJ: 12-02 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Leadership Principles |
Dierdorff & Rubin: Learning, motivation, & leadership
8. The decision making discretion of top-level managers is determined partly by external environmental
factors such as the industry structure, the industry’s rate of growth, and the degree to which
products can be differentiated.
ANS: T PTS: 1 DIF: Medium REF: 344 (Figure 12.2)
OBJ: 12-02 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Environmental Influence |
Dierdorff & Rubin: Managing decision-making processes
9. Firm size, firm age, the executive’s tolerance for ambiguity, and his or her commitment to strategic
outcomes are all factors that may affect managerial discretion.
ANS: T PTS: 1 DIF: Medium REF: 344 (Table 12.2)
OBJ: 12-02 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Environmental Influence |
Dierdorff & Rubin: Managing decision-making processes
10. External environmental factors that may affect managerial discretion include industry structure, rate
of market growth, and degree of product differentiation.
ANS: T PTS: 1 DIF: Hard REF: 344 (Table 12.2)
OBJ: 12-02 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Environmental Influence |
Dierdorff & Rubin: Managing decision-making processes
11. Typically, a vice president would NOT be considered to hold a high enough position to be included in
the top management team of an organization.
ANS: F PTS: 1 DIF: Easy REF: 345
OBJ: 12-02 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Knowledge of general business functions
12. The more heterogeneous and the larger the top management team, the easier it is to implement
strategy effectively.
ANS: F PTS: 1 DIF: Hard REF: 345
OBJ: 12-02 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Group Dynamics | Dierdorff &
Rubin: Managing decision-making processes
,13. The more homogeneous a top management team, the more likely those managers will be innovative
and willing to pursue strategic change.
ANS: F PTS: 1 DIF: Medium REF: 345
OBJ: 12-02 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Group Dynamics | Dierdorff &
Rubin: Managing decision-making processes
14. Compared to homogeneous top management teams, heterogeneous top management teams are
more likely to change their firm's strategies when necessary and to support innovation.
ANS: T PTS: 1 DIF: Medium REF: 345
OBJ: 12-02 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Group Dynamics | Dierdorff &
Rubin: Managing decision-making processes
15. Board members with substantive expertise in the firm’s core functions and businesses aids the
effectiveness of the top management team.
ANS: T PTS: 1 DIF: Hard REF: 345
OBJ: 12-02 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Group Dynamics | Dierdorff &
Rubin: Managing administration & control
16. The CEO of YorkMark, Inc., has an exceptional amount of power in the organization. It is likely the
board of directors is composed of the CEO’s friends from other firms and insiders who report to the
CEO.
ANS: T PTS: 1 DIF: Medium REF: 346
OBJ: 12-02 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Managing administration & control
17. A CEO may gain power by holding the titles of both CEO and Chairman of the Board.
ANS: T PTS: 1 DIF: Easy REF: 346
OBJ: 12-02 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Managing administration & control
18. The experience that results from long tenure in a firm is known to extend the breadth of an
executive’s knowledge base.
ANS: F PTS: 1 DIF: Medium REF: 346-347
OBJ: 12-02 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Managing human capital
19. Internal labor markets consist of the career opportunities for managers within the firm for which they
currently work.
, ANS: T PTS: 1 DIF: Easy REF: 347
OBJ: 12-03 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Managing administration & control
20. Selection of an insider as a new CEO indicates a firm’s desire to encourage innovation and strategic
change.
ANS: F PTS: 1 DIF: Medium REF: 347
OBJ: 12-03 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Strategic & systems skills
21. Employees usually have a strong preference for firms to use the internal managerial labor market
when selecting top management team members and the CEO.
ANS: T PTS: 1 DIF: Easy REF: 348
OBJ: 12-03 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Learning, motivation, & leadership
22. There are no longer barriers for talented women to rise to top management positions because
women such as Catherine Elizabeth Hughes and Carly Fiorina have risen to top positions in prominent
firms.
ANS: F PTS: 1 DIF: Easy REF: 349
OBJ: 12-03 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Learning, motivation, & leadership
23. When a new CEO is selected from outside the firm, a change of strategy is likely, especially if the top
management team is homogenous and highly cohesive.
ANS: F PTS: 1 DIF: Hard REF: 349 (Figure 12.3)
OBJ: 12-03 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Learning, motivation, & leadership
24. The strategic direction of a firm usually focuses on the coming three to five years.
ANS: T PTS: 1 DIF: Medium REF: 350
OBJ: 12-04 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Managing decision-making processes
25. The firm’s core ideology motivates the firm’s employees through the company’s heritage.
ANS: T PTS: 1 DIF: Easy REF: 350
OBJ: 12-04 TYPE: knowledge
