TEST BANK
TEST BANK 1
Copyright © 2010 Pearson Education, Inc.
,Strategic Management & Business Policy, 12e (Wheelen/Hunger)
Chapter 1 Basic Concepts in Strategic Management
1) Strategic management is one decision that determines the short-term performance of a
corporation.
Answer: FALSE
Diff: 1 Page Ref: 5
Topic: The Study 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
Diff: 2 Page Ref: 5
Topic: The Study of Strategic Management
3) General Electric led the transition from strategic planning to strategic management during the
1980s.
Answer: TRUE
Diff: 1 Page Ref: 6
Topic: The Study of Strategic Management
4) One of the benefits of strategic management is a clearer sense of vision for the firm.
Answer: TRUE
Diff: 2 Page Ref: 6
Topic: The Study of Strategic Management
5) To be effective, strategic management must be a formal process.
Answer: FALSE
Diff: 3 Page Ref: 7
Topic: The Study of Strategic Management
6) Globalization is the internationalization of markets and corporations.
Answer: TRUE
Diff: 1 Page Ref: 8
Topic: Globalization and Environmental Sustainability: Challenges to 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
Diff: 2 Page Ref: 8
Topic: Globalization and Environmental Sustainability: Challenges to Strategic Management
2
Copyright © 2010 Pearson Education, Inc.
,8) Environmental sustainability reflects business practices to reduce a firm's impact on the
physical environment.
Answer: TRUE
Diff: 2 Page Ref: 8
Topic: Globalization and Environmental Sustainability: Challenges to Strategic Management
AACSB: Ethical Reasoning
9) One member of the European Union (EU) is Chile.
Answer: FALSE
Diff: 2 Page Ref: 9
Topic: Globalization and Environmental Sustainability: Challenges to Strategic Management
10) The goal of NAFTA is complete economic integration.
Answer: FALSE
Diff: 2 Page Ref: 9
Topic: Globalization and Environmental Sustainability: Challenges to Strategic Management
11) Climate change has become a growing concern for businesses to include in their corporate
strategies.
Answer: TRUE
Diff: 2 Page Ref: 9-10
Topic: Globalization and Environmental Sustainability: Challenges to Strategic Management
AACSB: Ethical Reasoning
12) Knowing a company is mindful of its impact on the environment seldom changes consumer
buying habits.
Answer: FALSE
Diff: 2 Page Ref: 10
Topic: Globalization and Environmental Sustainability: Challenges to Strategic Management
13) While there are litigation and physical risks to companies as a result of climate change, there
is no risk currently identified to the company on its overall reputation.
Answer: FALSE
Diff: 3 Page Ref: 11
Topic: Globalization and Environmental Sustainability: Challenges to Strategic Management
AACSB: Reflective Thinking
14) Population ecology is a theory that proposes organizations can and do adapt to change by
imitating other successful organizations.
Answer: FALSE
Diff: 1 Page Ref: 12-13
Topic: Theories of Organizational Adaptation
15) According to organizational learning theory, an organization uses knowledge to improve the
fit between itself and its environment.
Answer: TRUE
Diff: 2 Page Ref: 13
Topic: Theories of Organizational Adaptation
3
Copyright © 2010 Pearson Education, Inc.
, 16) Strategic flexibility is the ability to shift from one dominant strategy to another.
Answer: TRUE
Diff: 1 Page Ref: 13
Topic: Creating a Learning Organization
17) One tenet of the learning organization is to maintain stability.
Answer: FALSE
Diff: 2 Page Ref: 14
Topic: Creating a Learning Organization
18) The internal environment includes the variables of opportunities and threats.
Answer: FALSE
Diff: 2 Page Ref: 16
Topic: Basic Model of Strategic Management
19) Research indicates that a broad mission statement may be best in a turbulent environment.
Answer: FALSE
Diff: 3 Page Ref: 17
Topic: Basic Model of Strategic Management
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
Diff: 3 Page Ref: 18
Topic: Basic Model of Strategic Management
AACSB: Analytic Skills
21) A strategy maximizes competitive advantage and minimizes competitive disadvantage.
Answer: TRUE
Diff: 2 Page Ref: 19
Topic: Basic Model of Strategic Management
22) Corporate strategy occurs at the business unit or product level.
Answer: FALSE
Diff: 1 Page Ref: 19
Topic: Basic Model of Strategic Management
23) A business strategy may include competitive or cooperative strategies.
Answer: FALSE
Diff: 2 Page Ref: 19
Topic: Basic Model of Strategic Management
24) A hierarchy of strategy emphasizes the need for the three levels of strategy to complement
and support one another.
Answer: TRUE
Diff: 2 Page Ref: 20
Topic: Basic Model of Strategic Management
4
Copyright © 2010 Pearson Education, Inc.
TEST BANK 1
Copyright © 2010 Pearson Education, Inc.
,Strategic Management & Business Policy, 12e (Wheelen/Hunger)
Chapter 1 Basic Concepts in Strategic Management
1) Strategic management is one decision that determines the short-term performance of a
corporation.
Answer: FALSE
Diff: 1 Page Ref: 5
Topic: The Study 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
Diff: 2 Page Ref: 5
Topic: The Study of Strategic Management
3) General Electric led the transition from strategic planning to strategic management during the
1980s.
Answer: TRUE
Diff: 1 Page Ref: 6
Topic: The Study of Strategic Management
4) One of the benefits of strategic management is a clearer sense of vision for the firm.
Answer: TRUE
Diff: 2 Page Ref: 6
Topic: The Study of Strategic Management
5) To be effective, strategic management must be a formal process.
Answer: FALSE
Diff: 3 Page Ref: 7
Topic: The Study of Strategic Management
6) Globalization is the internationalization of markets and corporations.
Answer: TRUE
Diff: 1 Page Ref: 8
Topic: Globalization and Environmental Sustainability: Challenges to 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
Diff: 2 Page Ref: 8
Topic: Globalization and Environmental Sustainability: Challenges to Strategic Management
2
Copyright © 2010 Pearson Education, Inc.
,8) Environmental sustainability reflects business practices to reduce a firm's impact on the
physical environment.
Answer: TRUE
Diff: 2 Page Ref: 8
Topic: Globalization and Environmental Sustainability: Challenges to Strategic Management
AACSB: Ethical Reasoning
9) One member of the European Union (EU) is Chile.
Answer: FALSE
Diff: 2 Page Ref: 9
Topic: Globalization and Environmental Sustainability: Challenges to Strategic Management
10) The goal of NAFTA is complete economic integration.
Answer: FALSE
Diff: 2 Page Ref: 9
Topic: Globalization and Environmental Sustainability: Challenges to Strategic Management
11) Climate change has become a growing concern for businesses to include in their corporate
strategies.
Answer: TRUE
Diff: 2 Page Ref: 9-10
Topic: Globalization and Environmental Sustainability: Challenges to Strategic Management
AACSB: Ethical Reasoning
12) Knowing a company is mindful of its impact on the environment seldom changes consumer
buying habits.
Answer: FALSE
Diff: 2 Page Ref: 10
Topic: Globalization and Environmental Sustainability: Challenges to Strategic Management
13) While there are litigation and physical risks to companies as a result of climate change, there
is no risk currently identified to the company on its overall reputation.
Answer: FALSE
Diff: 3 Page Ref: 11
Topic: Globalization and Environmental Sustainability: Challenges to Strategic Management
AACSB: Reflective Thinking
14) Population ecology is a theory that proposes organizations can and do adapt to change by
imitating other successful organizations.
Answer: FALSE
Diff: 1 Page Ref: 12-13
Topic: Theories of Organizational Adaptation
15) According to organizational learning theory, an organization uses knowledge to improve the
fit between itself and its environment.
Answer: TRUE
Diff: 2 Page Ref: 13
Topic: Theories of Organizational Adaptation
3
Copyright © 2010 Pearson Education, Inc.
, 16) Strategic flexibility is the ability to shift from one dominant strategy to another.
Answer: TRUE
Diff: 1 Page Ref: 13
Topic: Creating a Learning Organization
17) One tenet of the learning organization is to maintain stability.
Answer: FALSE
Diff: 2 Page Ref: 14
Topic: Creating a Learning Organization
18) The internal environment includes the variables of opportunities and threats.
Answer: FALSE
Diff: 2 Page Ref: 16
Topic: Basic Model of Strategic Management
19) Research indicates that a broad mission statement may be best in a turbulent environment.
Answer: FALSE
Diff: 3 Page Ref: 17
Topic: Basic Model of Strategic Management
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
Diff: 3 Page Ref: 18
Topic: Basic Model of Strategic Management
AACSB: Analytic Skills
21) A strategy maximizes competitive advantage and minimizes competitive disadvantage.
Answer: TRUE
Diff: 2 Page Ref: 19
Topic: Basic Model of Strategic Management
22) Corporate strategy occurs at the business unit or product level.
Answer: FALSE
Diff: 1 Page Ref: 19
Topic: Basic Model of Strategic Management
23) A business strategy may include competitive or cooperative strategies.
Answer: FALSE
Diff: 2 Page Ref: 19
Topic: Basic Model of Strategic Management
24) A hierarchy of strategy emphasizes the need for the three levels of strategy to complement
and support one another.
Answer: TRUE
Diff: 2 Page Ref: 20
Topic: Basic Model of Strategic Management
4
Copyright © 2010 Pearson Education, Inc.
