Strategic Management Process and Levels in Businesses

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What does capital expenditure do to an asset account?

Increases the asset's basis (correct)

Replaces the asset's basis with a new value

Decreases the asset's basis

Leaves the asset's basis unchanged

When would a company opt for an acquisition according to the text?

To decrease their asset's basis

When they want to develop internal capabilities

If they need to quickly enter a market (correct)

To form a strategic alliance with another company

What type of arrangement do some countries like India and China specify for FDI according to the text?

Joint Venture

Merger

Strategic Alliance (correct)

Acquisition

Which economic theory does the Industrial Organizational Approach in strategic management mainly deal with?

Competitive rivalry Signup and view all the answers

What is one of the assumptions of the Sociological Approach in strategic management?

Bounded rationality Signup and view all the answers

What advantage does a business obtain due to expansion according to the text?

Economies of scale Signup and view all the answers

What is a strategic business unit responsible for?

Budgeting, new product decisions, hiring decisions, and price setting Signup and view all the answers

What does an operational level strategy primarily deal with?

Day-to-day operational activities Signup and view all the answers

What is the main criticism of a functional organizational structure mentioned in the text?

Inefficiency in organizing activities Signup and view all the answers

Which term refers to a semiautonomous unit responsible for its own profit within a corporation?

Strategic business unit Signup and view all the answers

Why do some firms revert to a simpler strategic structure according to the text?

Driven by advances in information technology Signup and view all the answers

What distinguishes a technology strategy from operational level strategies based on the text?

Focuses on technology as a means of achieving overall objectives Signup and view all the answers

What is the first task in strategic management as highlighted in the text?

Compiling and disseminating a mission statement Signup and view all the answers

Why might an SME employ an entrepreneurial approach to strategic management?

As a result of fewer resources and smaller size Signup and view all the answers

What does a mission statement outline for an organization?

Raison d'etre of the organization Signup and view all the answers

Which process is NOT part of strategic formation as mentioned in the text?

Market expansion Signup and view all the answers

Why might a global/transnational organization employ a more structured strategic management model?

Scope of operations Signup and view all the answers

What should objectives in strategic management be parallel to, as per the text?

Time-line Signup and view all the answers

What did Edward Deming emphasize when it comes to decision-making?

Intuition and data should be integrated in decision-making Signup and view all the answers

Which statement best describes the role of intuition in strategic decision-making according to the text?

Intuition plays a crucial role in making good strategic decisions Signup and view all the answers

What does the strategic management process aim to achieve?

Organize information effectively for decision-making under uncertainty Signup and view all the answers

In what situations is intuition particularly useful according to the text?

When making decisions amidst uncertainty or few precedents Signup and view all the answers

What characteristic of strategic management is emphasized in the text?

It involves integrating intuition and analysis for effective decisions Signup and view all the answers

Alfred Sloan described Will Durant as someone who was guided by:

Intuition alone Signup and view all the answers

What is one of the non-financial benefits of taking an organization-wide, proactive approach to a changing global world?

Improved understanding of competitors' strategies Signup and view all the answers

Which benefit is NOT associated with building an executive team that serves as a model of cross-functional teamwork?

Increased employee turnover Signup and view all the answers

Why might red oceans feel comfortable to people even if they are not paths to future profitable growth?

They are perceived to have served well in the past Signup and view all the answers

Which action can help organizations overcome the cognitive hurdle and execute strategic shifts successfully?

Clarifying competitive advantage Signup and view all the answers

What is one benefit of defining focused, quantifiable outcomes measures of success for an organization?

Clarifying the path to success Signup and view all the answers

Which factor contributes to reducing conflict and empowering the organization according to the text?

Providing clear day-to-day decision-making guidelines Signup and view all the answers