Chapter One: A General Management Perspective Multiple Choice Questions PDF

Chapter One: A General Management Perspective Multiple Choice MC 1-1 A general management perspective is a. a pre-requisite in order to become a manager b. an understanding of the requirements of the strategic planning process c. essential for all employe...

Chapter One: A General Management Perspective Multiple Choice MC 1-1 A general management perspective is a. a pre-requisite in order to become a manager b. an understanding of the requirements of the strategic planning process c. essential for all employees d. a capacity for appreciating the issues associated with organizational performance Answer: d Difficulty: challenging Page: 1 MC 1-2 One of the ways in which a general manager creates value for the organization is by a. establishing effective working relationships with the media b. identifying emerging opportunities for the organization c. meeting the requirements of the regulators for full disclosure d. sponsoring community-based charitable fund raising initiatives Answer: b Difficulty: moderate Page: 1 MC 1-3 The basic tasks of the general manager are a. planning, organizing, managing, and controlling b. setting direction, creating strategy, implementing change, and assessing performance c. developing and implementing the strategic plan and evaluating performance-to-plan d. assessing the strengths and weaknesses of the organization and identifying opportunities and threats Answer: b Difficulty: easy Page: 3 MC 1-4 Organizational performance is based on two sets of measures: a. the strengths of the general manager and the profitability of the firm b. the health of the organization and the financial performance of the firm c. the safety record of the firm and the quality standards for the product d. the satisfaction of the shareholders and the return on investment Answer: b Difficulty: easy Page: 4 Copyright © 2016 Pearson Canada Inc. 1 MC 1-5 One of the reasons senior managers are often unaware of the organizational health of their firm is they a. do not survey their employees often enough b. equate low turnover with employee satisfaction c. receive filtered information from middle managers d. are more concerned about the financial health of the organization Answer: c Difficulty: moderate Page: 4 MC 1-6 Two common measures of operating performance are a. number of new product focus groups b. employee turnover and retention rates c. sales revenue and gross margin d. fuel costs and labour rates Answer: c Difficulty: challenging Page: 4 MC 1-7 One common measure of organizational health is a. employee satisfaction rates b. positive media coverage of the Chief Executive Officer c. number of training hours per employee d. firm designated as a best company to work for Answer: a Difficulty: challenging Page: 4 MC 1-8 An enterprise where operational performance is negative and organizational health is positive is what type of organization? a. An organization in crisis. b. A troubled organization. c. A complacent organization. d. A healthy organization. Answer: c Difficulty: moderate Page: 5-6 Copyright © 2016 Pearson Canada Inc. 2 MC 1-9 An enterprise where both operation and organizational performance are positive is what type of organization? a. An organization in crisis. b. A troubled organization. c. A complacent organization. d. A healthy organization. Answer: d Difficulty: moderate Page: 5-6 MC 1-10 An enterprise where operating performance is positive and organizational health is negative is what type of organization? a. An organization in crisis. b. A troubled organization. c. A complacent organization. d. A healthy organization. Answer: b Difficulty: moderate Page: 5-6 MC 1-11 An enterprise where both operating and organizational performance are negative is what type of organization? a. An organization in crisis. b. A troubled organization. c. A complacent organization. d. A healthy organization. Answer: a Difficulty: moderate Page: 5-6 MC 1-12 One of the reasons for developing a vision statement for an organization is to a. match the competition b. prevent confusion over the purpose of the business c. satisfy the stakeholders d. comply with corporate policy Answer: b Difficulty: moderate Page: 6 Copyright © 2016 Pearson Canada Inc. 3 MC 1-13 A vision consists of two components a. statement of purpose and a metaphor for the business b. goal statement and an objective c. guiding philosophy and a tangible image d. an action and an outcome Answer: c Difficulty: easy Page: 7 MC 1-14 The core purpose and core values of an organization represent its a. moral intent b. code of conduct c. compact with shareholders d. guiding philosophy Answer: d Difficulty: easy Page: 8 MC 1-15 A good mission statement is one that a. is brief and readily measured b. challenges the organization c. appeals to the shareholders d. is easy to implement Answer: b Difficulty: easy Page: 10 MC 1-16 The timeframe for achieving the organizational mission is a. 1 to 2 years b. 3 to 5 years c. 5 to 10 years d. over 10 years Answer: d Difficulty: easy Page: 10 MC 1-17 One of the purposes of the visioning process is to a. satisfy the requirements of the Board of Directors for an up-to-date vision statement b. maintain the lead over the competition c. capture the imagination of the market d. ensure the day to day actions of employees are consistent with the vision Copyright © 2016 Pearson Canada Inc. 4 Answer: d Difficulty: challenging Page: 11 MC 1-18 One common source of visionary ideas is a. employees b. suppliers c. competitors d. industry analysts Answer: a Difficulty: moderate Page: 12 MC 1-19 Good vision statements are best described as a. feasible and challenging b. feasible and readily implemented c. desirable and resistant to change d. desirable and singular in their purpose Answer: a Difficulty: challenging Page: 12 MC 1-20 The key difference between vision and strategy is that the vision a. provides operational guidelines; strategy sets general priorities b. provides the map; strategy sets the priorities c. sets general priorities; strategy presents specific actions d. provides broad direction; strategy sets general priorities Answer: d Difficulty: challenging Page: 13 MC 1-21 Collectively, the vision, mission, and values of an organization are intended to a. directs the governance of the Board of Directors b. maintain the lead over the competition c. inspire the organization and provide direction on how to achieve its goals d. direct the operations and ensure consistent results over time Answer: c Difficulty: moderate Page: 13 Copyright © 2016 Pearson Canada Inc. 5 MC 1-22 Failure to translate a vision into a strategy is sometimes known as a. corporate slide b. organizational lag c. faulty implementation d. strategic drift Answer: d Difficulty: easy Page: 13 MC 1-23 Strategic planning is a. the development of a multi-year operational plan b. the development of a plan for a new product launch c. an approach to performance evaluation based on how the strategy was implemented d. an approach to strategic analysis based on how the strategy is developed Answer: d Difficulty: moderate Page: 14 MC 1-24 What kind of plan results from the strategic analysis process? a. operational b. marketing c. business d. finance Answer: c Difficulty: moderate Page: 14 MC 1-25 Two aspects of the general manager's job that must be addressed before the strategy- making process can begin are a. setting direction and developing the business plan b. analyzing the environment and identifying opportunities and threats c. developing the business plan and obtaining Board of Directors' approval to implement d. assessing performance and setting direction Answer: d Difficulty: easy Page: 14 MC 1-26 Before a general manager embarks on the strategy-making process, they need to understand and know the starting position of the organization. This is accomplished via a. receiving feedback from all levels of management in the firm b. analyzing the environment and identifying opportunities and threats c. developing the business plan Copyright © 2016 Pearson Canada Inc. 6  d. creating a meaningful and solid assessment of company performance Answer: d Difficulty: moderate Page: 3 MC 1-27 Typical measures of operating performance are a. profitability, market performance and problem solving b. profitability, financial position and market performance c. profitability, financial position and sustainability d. profitability, market performance and sustainability Answer: b Difficulty: Moderate Page: 4 MC 1-28 When assessing the operating performance of a company, a typical Financial Position indicator includes a. key expense ratios b. return on equity c. leverage ratios d. market share Answer: c Difficulty: challenging Page: 4 MC 1-29 The job of the general manager is a. setting direction and developing the business plan b. creating, capturing and appropriately distributing value for the enterprise c. ensuring the organization is maximizing internal capabilities d. assessing performance and setting direction Answer: b Difficulty: challenging Page: 1 MC 1-30 Reasons that management fail to understand where the business stands in terms of organizational health may include a. negative feedback to upper-level managers may be implicitly or explicitly discouraged b. lower return on equity than originally planned c. high levels of employee retention d. market share Answer: a Difficulty: easy Page: 4 Copyright © 2016 Pearson Canada Inc. 7  Chapter Two: Strategy Multiple Choice MC 2-1 The four components of the strategy model are a. goals, products, markets, and activities b. financial resources, goals, markets, and products c. focus, goals, activities, and financial resources d. value, goals, focus, and activities Answer: d Difficulty: moderate Page: 18 MC 2-2 An organization's value proposition answers the question a. Which markets should the business enter? b. How does the business intend to attract customers? c. Which products should the business offer? d. How should the products of the business be priced? Answer: b Difficulty: easy Page: 18 MC 2-3 In the hands of the general manager, strategy is a tool for a. establishing, directing, and controlling the operation of an organization b. creating, sustaining, and monitoring the direction of an organization c. establishing, implementing, and monitoring the performance of an organization d. creating, sustaining, and assessing the operation of an organization Answer: b Difficulty: easy Page: 18 MC 2-4 The soft goals of an organization are targets for the a. financial performance of the business b. social conduct of the business c. operation of the corporate office d. organization's contributions to the community Answer: b Difficulty: easy Page: 21 Copyright © 2016 Pearson Canada Inc. 8 MC 2-5 A 15% return on investment and a reduction in re-infection rates are examples of a. shareholder priorities b. soft goals c. hard goals d. corporate values Answer: c Difficulty: moderate Page: 20 MC 2-6 A growth strategy is one that implies the priorities are a. market share, return on investment, and shareholder satisfaction b. increased sales, lower costs, and higher profits c. market, plant, and personnel investments d. revenue, cost containment, and higher earnings per share Answer: c Difficulty: moderate Page: 22-23 MC 2-7 With a harvest strategy, you would expect the level of investment in plant and equipment to be a. lower than for a growth strategy b. the same as that for a growth strategy c. higher than for a growth strategy d. unrelated to the strategy Answer: a Difficulty: moderate Page: 23 MC 2-8 The product market component of strategy refers to a. price and market position b. size of the target product market c. product and market choice d. the consumer needs of the target product market Answer: c Difficulty: moderate Page: 24 MC 2-9 What type of strategy presents new products to existing markets? a. market penetration b. harvest c. diversification d. product development Copyright © 2016 Pearson Canada Inc. 9 Answer: d Difficulty: moderate Page: 24 MC 2-10 An organization that provides products at a lower price than its competitors is competing on the basis of a. brand recognition b. cost c. differentiation d. competitive parity Answer: b Difficulty: easy Page: 26 MC 2-11 An organization that provides exclusive products is competing on the basis of a. differentiation b. cost c. goodwill d. competitive difference Answer: a Difficulty: moderate Page: 27 MC 2-12 A firm that provides convenience and friendly service is pursuing a value proposition based on a. service b. execution c. price d. features Answer: b Difficulty: moderate Page: 28 MC 2-13 A firm that discounts and offers rebates is pursing a value proposition based on a. features b. execution c. price d. reliability Answer: c Difficulty: moderate Page: 28 Copyright © 2016 Pearson Canada Inc. 10 MC 2-14 A firm that focuses on image and design is competing on the basis of a. function b. fashion c. reliability d. features Answer: d Difficulty: moderate Page: 28 MC 2-15 Core activities are considered a. standard for all businesses within an industry b. critical to the operation of the business c. essential functions for the market leader d. outsourced activities Answer: b Difficulty: easy Page: 30 MC 2-16 Three key functions for a vertically integrated firm are a. supply management, production, and sales b. resource agreements, manufacturing, and marketing c. capital acquisition, equipment, and plant operations d. raw material supply, manufacturing, and distribution Answer: d Difficulty: challenging Page: 31 MC 2-17 Three key functions for a firm that competes on the basis of its technology are a. supply agreements, employee recruitment, and contracted services b. research and development, joint ventures, and assembly c. patents, technical publications, and employee recruitment d. research and development, component supply, and service Answer: d Difficulty: challenging Page: 31 MC 2-18 Key activities for firms that compete on the basis of cost would include a. supplier relationships and logistics b. marketing and after-sales service c. research and development and contract manufacturing d. component supply arrangements and assembly Copyright © 2016 Pearson Canada Inc. 11 Answer: a Difficulty: moderate Page: 32 MC 2-19 Key activities for a firm that competes on the basis of differentiation are a. design, sourcing, and marketing b. contract manufacturing, distribution, and after-sales service c. financing, operations, and distribution d. raw material supply, assembly, and marketing Answer: a Difficulty: moderate Page: 33 MC 2-20 Strategy is commonly considered to be a a. product and market position b. set of goals and tactics c. blueprint for the operations d. business plan and a marketplace position Answer: d Difficulty: moderate Page: 35 MC 2-21 A sound competitive strategy rests on a. operational excellence b. financial stability c. unique capabilities d. benchmarking Answer: c Difficulty: challenging Page: 38 MC 2-22 Corporate strategy can be recognized by the organization's a. head office location and corporate management processes b. financial performance and number of shareholders c. product market focus and mission statement d. business portfolio and corporate resources Answer: d Difficulty: easy Page: 39 Copyright © 2016 Pearson Canada Inc. 12 MC 2-23 A corporate strategy of better than 70% of revenues from a single business unit is a. consolidation b. constrained business c. harvest d. dominant business unit Answer: d Difficulty: easy Page: 40 MC 2-24 The central challenge for corporate general management is in a. negotiating corporate supply agreements b. managing diverse operations from a central location c. adding value to the individual business units d. hedging exchange rate risks Answer: c Difficulty: easy Page: 41 MC 2-25 The ultimate test of the utility of corporate strategy is in the a. optimism of shareholders b. endorsement of the Board of Directors c. commitment of the employees d. performance of the corporation Answer: d Difficulty: easy Page: 41 MC 2-26 Core Activities address which of the following questions? a. What are the business aims with respect to growth, profitability and risk? b. What are the primary value-adding activities that the business intends to perform? c. What are the products and/or services the business plans to sell? d. How does the business intend to attract customers? Answer: b Difficulty: easy Page: 18 MC 2-27 McCain’s approach to build a competitive differentiation and advantage in its worldwide french-fried potato business can be described as a. an effective goal structure b. a product market focus c. a well-defined value proposition d. a distinctive core competency Copyright © 2016 Pearson Canada Inc. 13  Answer: b Difficulty: moderate Page: 26 MC 2-28 A firm that focuses on convenience and delivery is competing on the basis of a. price b. features c. customer satisfaction d. execution Answer: d Difficulty: easy Page: 28 MC 2-29 If less than 70 percent of revenue comes from any one business unit, a common corporate strategy will be a. related constrained b. a pure play c. related linked d. unrelated diversification Answer: d Difficulty: challenging Page: 42 MC 2-30 A related constrained corporate strategy occurs a. where less than 70 percent of revenue comes from a business and there are no common links between the businesses b. where between 70 and 95 percent of revenues comes from a single business unit c. where less than 70 percent of revenue comes from any one business unit but the underlying businesses are closely linked d. where less than 70 percent of revenue comes from any one business unit and there are limited links between the businesses Answer: c Difficulty: moderate Page: 41 Chapter Three: The Diamond-E Framework Multiple Choice MC 3-1 The Diamond-E model is a framework for a. financial assessment Copyright © 2016 Pearson Canada Inc. 14  b. market evaluation c. product decisions d. strategic analysis Answer: d Difficulty: easy Page: 48 MC 3-2 Three key components of the Diamond-E model are a. product/market focus, corporate goals, and strategy b. organization, strategy, and environment c. financial resources, management preferences, and the product/market focus d. corporate goals, internal strengths, and external threats Answer: b Difficulty: easy Page: 49 MC 3-3 A viable strategy needs to be aligned with the a. financial resources of the firm b. organization's internal capabilities c. priorities of the shareholders d. organization's current market position Answer: b Difficulty: easy Page: 49 MC 3-4 Opportunities for the organization are found in its a. financial statements b. external environment c. internal capabilities d. the value chain activities Answer: b Difficulty: easy Page: 49 MC 3-5 The underlying logic of the Diamond-E model is consistency, meaning the a. financial resources of the firm are matched with the priorities of the shareholders b. strategy is in keeping with the priorities of suppliers c. strategy is consistent with the internal and external environment d. financial resources of the firm are matched with its strengths Answer: c Difficulty: moderate Page: 49 Copyright © 2016 Pearson Canada Inc. 15 MC 3-6 Environmental risks typically arise because the a. management misread the situation or failed to adapt to changing circumstances b. organization was incapable of responding to the situation or its response was inadequate c. management took too long to respond to the situation d. organization lacked the required resources to respond to the situation Answer: a Difficulty: moderate Page: 51 MC 3-7 Environmental risks typically arise from inconsistencies between a. strategy and the sustainability of the organization b. the financial resources of the organization and its strengths c. strategy and external opportunities and challenges d. the financial resources of the organization and its technology assets Answer: c Difficulty: challenging Page: 51 MC 3-8 Capability risks typically arise from inconsistencies between a. strategy and the sustainability of the organization b. the financial resources of the organization and its strengths c. strategy and internal competencies of the organization d. the financial resources of the organization and its culture Answer: c Difficulty: moderate Page: 51 MC 3-9 When evaluating a strategic proposal, an important consideration is the implications for the organization's a. employees b. suppliers c. contractors d. current strategy Answer: d Difficulty: easy Page: 53 MC 3-10 The strategy-environment linkage aligns a. strategy with the regulatory environment in which the organization operates b. strategic opportunities and challenges with external forces c. strategy with the financial environment of the organization d. strategic opportunities and challenges with the internal environment Copyright © 2016 Pearson Canada Inc. 16 Answer: b Difficulty: moderate Page: 53 MC 3-11 A technique known as a gap analysis is used to evaluate the a. strategy-resources linkage b. resources-organization linkage c. strategy-management preferences linkage d. resources-environment linkage Answer: a Difficulty: easy Page: 54 MC 3-12 The strategic preferences of the management team need to be considered to a. avoid conflict b. develop an appropriate strategy c. counter environmental threats d. leverage internal capabilities Answer: b Difficulty: moderate Page: 54 MC 3-13 An organization's capabilities are influenced by its a. financial resources and employee development program b. leadership and the priorities of the Board of Directors c. structure and management processes d. culture and corporate governance Answer: c Difficulty: easy Page: 55 MC 3-14 Strategic tension refers to the constraints that exist between what an organization a. has done in the past and what it could do in the future b. could do and how the management team wants to proceed c. should do and its product/market focus d. should do and what it can do Answer: d Difficulty: moderate Page: 56 MC 3-15 The organization's external environment suggests what the organization a. needs to do given the competitive landscape Copyright © 2016 Pearson Canada Inc. 17  b. has the capabilities to competently execute c. should have done in the past d. should implement immediately Answer: a Difficulty: easy Page: 56 MC 3-16 Strategic reviews are typically undertaken a. as part of the annual financial audit b. every December 31 c. in preparation for filing the corporate tax return d. on a periodic basis, such as once a year Answer: d Difficulty: moderate Page: 57 MC 3-17 Organizations that engage in informal strategic reviews on an on-going basis are a. concerned about their organization's financial stability b. having misgivings about their organization's strategic direction c. in a position to respond in a timely manner to strategic possibilities d. following the lead of their major competitors Answer: c Difficulty: moderate Page: 57 MC 3-18 The first step in the process of strategic analysis is to a. develop a set of mutually exclusive options b. establish the need for action c. evaluate the competitive environment d. undertake a gap analysis Answer: b Difficulty: easy Page: 57 MC 3-19 One of the key activities associated with the development of the base case is a careful analysis of the a. capabilities of the management team b. priorities of the Board of Directors c. strengths of the organization's major competitors d. current performance of the organization Answer: d Difficulty: moderate Copyright © 2016 Pearson Canada Inc. 18 Page: 57 MC 3-20 One approach that can be used to evaluate the performance of the organization is to a. forecast future performance based on the current strategy b. measure performance against the level of competition in the industry c. compare the budget forecast to actual expenditures for the current period d. measure performance against an external standard Answer: d Difficulty: moderate Page: 58 MC 3-21 If organizational performance is not in keeping with expectations, the recommended strategic approach is to a. check vulnerabilities b. develop new core competencies c. introduce cost cutting measures d. problem solve and undertake remedial action Answer: d Difficulty: moderate Page: 58 MC 3-22 One of the key activities associated with the strategy formulation stage of strategic analysis is to a. generate strategic proposals b. assess past performance c. forecast future performance based on current strategy d. establish need for change Answer: a Difficulty: easy Page: 59 MC 3-23 When reviewing an organization's strategic proposals, one of the considerations should be the a. uniqueness of the proposals b. cost of retraining the workforce c. regulatory reporting requirements d. level of risk given the nature of the opportunity Answer: d Difficulty: moderate Page: 60 MC 3-24 Hidden assets can be identified from the a. organization's financial statements Copyright © 2016 Pearson Canada Inc. 19  b. minutes of the Board of Directors' meetings c. organization's internal capabilities d. organization's external analysis Answer: c Difficulty: moderate Page: 61 MC 3-25 Good strategies sometimes fail because the a. competition moved ahead b. industry outlook was negative c. government called an election d. implementation was challenging Answer: d Difficulty: moderate Page: 61 MC 3-26 The second step in the process of strategic analysis is to a. develop and evaluate proposals to address business opportunities and challenges b. assess past performance c. forecast future performance under current strategy d. move to build commitment and develop required capabilities Answer: a Difficulty: moderate Page: 57 MC 3-27 The third step in the process of strategic analysis is to a. forecast future performance under current strategy b. use the Diamond-E framework to shape and short-list proposals c. prepare performance forecasts for short-listed proposals d. commit, implement and review Answer: d Difficulty: easy Page: 57 MC 3-28 When a firm satisfies key stakeholder interests at the expense of not delivering exactly what the market needs, the firm is most likely guided by a. what the firm “needs” to do b. what the firm’s capabilities “can” do c. what the firm’s management preference “wants” to do d. what the firm’s belief in what it “should” do Answer: c Difficulty: challenging Copyright © 2016 Pearson Canada Inc. 20  Page: 56 MC 3-29 Kodak procrastinating for years before deciding to enter the market for digital photography is an example of a. inconsistencies with strategy and resources b. inconsistencies between strategy and environment c. inconsistencies with strategy and capabilities d. inconsistencies between current and proposed strategies Answer: b Difficulty: challenging Page: 51 MC 3-30 Management roll-out of a new comprehensive compensation scheme is likely addressing a. short-term environmental risks b. long-term environmental risks c. short-term capability risks d. long-term capability risks Answer: d Difficulty: moderate Page: 51 Chapter Five: Environment Analysis Multiple Choice MC 5-1 The relevant environment for strategic analysis is the organization’s a. competitive sphere b. political jurisdiction c. boundaries d. industry or market segment Answer: d Difficulty: easy Page: 89 MC 5-2 Key questions that help define an organization’s relevant environment include a. managerial preferences and stakeholder interests b. market forces of supply and demand c. goals and objectives of the organization d. mission and organizational capabilities Answer: b Difficulty: moderate Copyright © 2016 Pearson Canada Inc. 21 Page: 89 MC 5-3 Organization’s that are outperforming their industry have aligned a. operations with efficiency b. strategy with environment c. managerial preferences with mission d. strategy with competitors Answer: b Difficulty: moderate Page: 90 MC 5-4 Strategic goals establish a. managerial preferences b. performance expectations c. operation efficiency targets d. organizational boundaries Answer: b Difficulty: easy Page: 91 MC 5-5 Product market focus is important for evaluating a. demographic forces b. economic conditions c. consumer demand d. government regulation Answer: c Difficulty: moderate Page: 91 MC 5-6 An organization’s value proposition is based on a. managerial preferences and organizational capabilities b. competitive pressures and organizational response c. customer appeal and competitive differentiation d. consumer demand and technological solutions Answer: c Difficulty: moderate Page: 86 MC 5-7 If a firm’s value proposition is based on price then a. consumer price sensitivity is of interest b. cost cutting is a priority c. long term supply agreements are common d. operational efficiency is a key goal Copyright © 2016 Pearson Canada Inc. 22 Answer: a Difficulty: easy Page: 86 MC 5-8 Elements of the profit model used to evaluate strategic proposals include a. projected revenues, estimated costs, and time line for implementation b. sales target, projected revenues, and potential profits c. investment, projected revenues, and estimated costs d. gross margin, net earnings, and debt/equity ratio Answer: c Difficulty: moderate Page: 93 MC 5-9 Variable costs are tied to a. exchange rate fluctuations b. the price of raw materials c. supplier margins d. changes in volume Answer: d Difficulty: easy Page: 93 MC 5-10 If an organization’s fixed costs are relatively high, then the strategic focus is on a. minimizing variable costs b. maximizing through-put c. reducing fixed costs d. increasing leverage Answer: b Difficulty: challenging Page: 93 MC 5-11 If an organization’s variable costs are relatively high then the strategic focus is on a. input costs b. interest rates c. contribution d. technology Answer: a Difficulty: easy Page: 94 MC 5-12 Strategic proposals requiring significant up-front investment would benefit from a. a lengthy implementation period Copyright © 2016 Pearson Canada Inc. 23  b. worst case scenario planning c. strong leadership d. price stability in the marketplace Answer: b Difficulty: challenging Page: 94 MC 5-13 A macro-environment scan is a search for a. short-term changes in the external environment b. economic forces with competitive implications c. long-term social, economic, and technical trends d. alignment of strategy with environment Answer: c Difficulty: easy Page: 96-97 MC 5-14 Market intruders have the potential to a. create barriers to exit b. increase competition c. reduce profitability for marginal firms d. change the industry Answer: d Difficulty: moderate Page: 97 MC 5-15 Environmental forces can be classified as a. market structure, consumer preferences, technology, and supplier base b. supply, demand, competition, and governmental c. time horizon, break-even point, barriers to entry, pace of change d. product market focus, governmental, organizational boundaries, and demand Answer: b Difficulty: easy Page: 98 MC 5-16 One of the considerations when evaluating the fit between a strategic proposal and demand is the a. preferences of the management team b. likelihood of competitive reaction c. response of the regulators d. bargaining power of the buyers Answer: d Difficulty: easy Copyright © 2016 Pearson Canada Inc. 24 Page: 99 MC 5-17 One of the factors that influences the scale and timing of market development is the a. priorities of the Board of Directors b. likelihood of competitive reaction c. product market life cycle d. threat of new entrants Answer: c Difficulty: easy Page: 100 MC 5-18 One of the considerations when evaluating the fit between a strategic proposal and supply is a. competition for raw materials b. customer bargaining power c. threat of new entrants d. likelihood of competitive response Answer: a Difficulty: easy Page: 102 MC 5-19 The critical issue with technology is often a. timing b. volume c. ratio of fixed to variable costs d. break-even point Answer: a Difficulty: easy Page: 102 MC 5-20 One of the considerations when testing the strategic proposal competition link is a. break-even point b. technology c. bargaining power of suppliers d. industry attractiveness Answer: d Difficulty: moderate Page: 103 MC 5-21 Trade policy is one of the considerations associated with the linkage between strategy and a. environment b. import Copyright © 2016 Pearson Canada Inc. 25  c. government d. export Answer: c Difficulty: easy Page: 105 MC 5-22 Research grants are an example of a. industrial support b. entry barriers c. wage subsidies d. government support Answer: d Difficulty: easy Page: 105 MC 5-23 A key priority in the early stages of analysis of the strategy/environment linkage is a. data collection b. break-even analysis c. goal setting d. focus Answer: d Difficulty: moderate Page: 110 MC 5-24 Where the strategy/environment linkage is marginal, the proposal should be a. reserved for scenario planning b. retained for comparison purposes c. re-evaluated d. subjected to rigorous cost- benefit analysis Answer: c Difficulty: moderate Page: 110 MC 5-25 The purpose of forecasting the performance of a strategic proposal is to ensure a. management is committed to the initiative b. sustainability of the enterprise c. stakeholder priorities have been addressed d. consistency with the strategic goals Answer: d Difficulty: moderate Page: 110 Copyright © 2016 Pearson Canada Inc. 26 MC 5-26 A small winery that intends to age all of its products is an example of an industry with a. high fixed cost structures b. high variable cost structures c. high break even points structures d. inflexible investment structures Answer: d Difficulty: moderate Page: 94 MC 5-27 Defining the right time horizon will involve the following factors: a. pace of external change, flexibility of commitment, implementation horizon b. flexibility of commitment, resource capabilities and implementation horizon c. pace of external change, resource capabilities and flexibility of commitment d. pace of external change, implementation horizon and resource capabilities Answer: a Difficulty: moderate Page: 95 MC 5-28 A focused environmental analysis will involve a. issue-continuous informal process b. analysis of fit with forces in defined environments c. fundamental social economic and technical trends d. identify events of potential impact to the business Answer: b Difficulty: challenging Page: 97 MC 5-29 When analyzing competition for raw material in the business environment analysis model (BEAM) the environmental force being considered is a. supply b. government c. demand d. competition Answer: a Difficulty: moderate Page: 98 MC 5-30 The fact that automakers buy goods in quantities that represent important volumes to their suppliers indicates a force of a. low customer bargaining power b. high customer bargaining power Copyright © 2016 Pearson Canada Inc. 27  c. low supplier power d. high supplier power Answer: b Difficulty: moderate Page: 101 Chapter Six: Resource Analysis Multiple Choice MC 6-1 Some of the resources required to execute a strategic proposal include a. forecasts, budgets, and sales projections b. financial, procedural, and environmental c. operating, management, and equipment d. financial, operating, and marketing Answer: d Difficulty: easy Page: 112 MC 6-2 The adequacy of available resources is relative to the a. size of the organization b. demands of the strategic proposal c. managerial preferences d. number of competitors Answer: b Difficulty: easy Page: 112 MC 6-3 Distinctive competencies are activities an organization a. has outsourced b. performs better than its competitors c. has integrated with its suppliers d. requires no improvement Answer: b Difficulty: easy Page: 115 MC 6-4 The core skills of an organization represent a. managerial know-how and strong links to the investor community b. knowledge and experience developed over time c. proprietary technology and alliances with the scientific community Copyright © 2016 Pearson Canada Inc. 28  d. capacity to raise capital and flexible work rules Answer: b Difficulty: moderate Page: 115 MC 6-5 Core competencies give an organization the opportunity to compete on the basis of its a. product market focus b. alliances c. unique resources d. performance Answer: c Difficulty: easy Page: 115 MC 6-6 Resources that have the potential to give an organization a competitive advantage are a. expensive, readily transferrable, covered by patents, and developed over time b. single purpose, embedded in organizational routines, easy to copy, short lived c. valuable, rare, difficult to copy, and organized effectively d. codified, sustainable, technical, and sufficient Answer: c Difficulty: easy Page: 116 MC 6-7 Resources that can be used by the organization to address an environmental threat are a. valuable b. rare c. sustainable d. easy to copy Answer: a Difficulty: moderate Page: 116 MC 6-8 The advantage provided by resources that are held by few competitors is a. enduring b. sustainable c. temporary d. enabling Answer: c Difficulty: moderate Page: 116 Copyright © 2016 Pearson Canada Inc. 29 MC 6-9 Resources with the potential to provide a sustainable advantage as opposed to a competitive advantage can be a. modified by the competitor b. upgraded reasonably easily c. purchased in factor markets d. leveraged by the organization Answer: d Difficulty: challenging Page: 116 MC 6-10 Path-dependency refers to resources that arise from a a. competitive price war b. series of events occurring over time c. patent infringement d. change in government policy Answer: b Difficulty: easy Page: 117 MC 6-11 Competitive advantages that are not intuitively obvious are an example of a. causal ambiguity b. competitive parity c. inimitable resources d. path-dependency Answer: a Difficulty: moderate Page: 117 MC 6-12 A capability arising from a network of relationships is known as a. integrative thinking b. social complexity c. path dependency d. managerial know-how Answer: b Difficulty: moderate Page: 117 MC 6-13 Resource durability is sometimes associated with a a. procedure b. patent c. brand d. position Copyright © 2016 Pearson Canada Inc. 30 Answer: c Difficulty: easy Page: 118 MC 6-14 An organization’s resources can be enhanced or undermined by a. how rare the resources are b. the organization’s product market focus c. the break-even point d. the organization’s social values Answer: d Difficulty: moderate Page: 118 MC 6-15 A resource-pushed strategy is one that a. lacks sufficiency b. leverages unique capabilities c. is sustainable d. can be readily copied Answer: b Difficulty: moderate Page: 120 MC 6-16 The purpose of evaluating the strategy-resources linkage is to test for a. profitability b. managerial fit c. material gaps d. sustainability Answer: d Difficulty: challenging Page: 121 MC 6-17 One of the elements taken into consideration when conducting a resource analysis by strategy component is a. managerial preferences b. break-even point c. government regulation d. value proposition Answer: d Difficulty: easy Page: 122 MC 6-18 A resource analysis by resource category considers such elements as the a. market share, technology, and employee capabilities Copyright © 2016 Pearson Canada Inc. 31  b. population, social values, and technology c. economy, government regulation, and product life cycle d. break-even point, interest rates, and consumer preferences Answer: a Difficulty: challenging Page: 113 and 122 MC 6-19 One of the considerations when evaluating resource gaps is the a. cost of failure b. likelihood of government subsidies c. nature of a competitive response d. product market focus Answer: a Difficulty: easy Page: 127 MC 6-20 Strategic proposals that fit well with the environment and available resources are further evaluated based on a. product-market focus b. break-even point c. the level of initial investment d. managerial preferences Answer: d Difficulty: moderate Page: 128 MC 6-21 In a rapidly changing environment, organizations need resources that are a. stable b. easily replicated c. adaptable d. single-use Answer: c Difficulty: moderate Page: 128-129 Copyright © 2016 Pearson Canada Inc. 32 MC 6-22 Diversification can be defined as an organization’s ability to a. define the scope of its operations b. divest of non-core activities c. match the capabilities of its competitors d. leverage its current resources Answer: d Difficulty: moderate Page: 129 MC 6-23 A firm’s value chain of activities is sometimes referred to as a. horizontal integration b. competitive parity c. structural functionality d. vertical integration Answer: d Difficulty: easy Page: 129 MC 6-24 The scope of a firm is traditionally defined by its a. work force, assets, and location b. product line, production capacity, and technological base c. product market, geography, and vertical integration d. technology, employee capabilities, and procedures Answer: c Difficulty: easy Page: 129 MC 6-25 The purpose of assessing an organization’s capabilities is to determine what the a. competition might do in response b. government might choose to regulate c. suppliers might try to copy d. organization might do to leverage an opportunity Answer: d Difficulty: moderate Page: 129 MC 6-26 Supplier relationships, logistics reliability and efficiency, and quality reputation are examples of the following resource category: a. operations b. development c. financial d. corporate reputation Copyright © 2016 Pearson Canada Inc. 33 Answer: a Difficulty: moderate Page: 113 MC 6-27 The Dow Chemical company is the leader in the low-cost production of commodity chemicals. Dow’s ability to execute this is observed as a a. core competence b. distinctive competence c. core skill d. distinctive skill Answer: B Difficulty: moderate Page: 115 MC 6-28 When considering the VRIO model, understanding how many competing firms possess specific, valuable resources and capabilities answers the question of a. value b. rareness c. inimitability d. organization Answer: b Difficulty: moderate Page: 116 MC 6-29 In 2001, Yahoo replaced a significant number of its salesforce, brought in new leadership and refocused its effort on direct selling. This is an example of link strategy to the following resource: a. marketing b. operations c. finance d. human Resources Answer: a Difficulty: challenging Page: 124 MC 6-30 If testing the resource-strategy linkage leads to identifying resource gaps you know immediately you cannot close, you should then a. ignore gaps and ensure current business requirements are being addressed b. recycle the strategy for the next generation of proposals c. select workable part(s) of the strategy and move forward d. proceed and adjust gaps going forward Copyright © 2016 Pearson Canada Inc. 34  Answer: b Difficulty: challenging Page: 126 Chapter Seven: Management Preference Analysis Multiple Choice MC 7-1 The mandate of the Board of Directors is a. profitability b. shareholder wealth c. regulatory compliance d. corporate governance Answer: d Difficulty: easy Page: 134 MC 7-2 Corporate governance is the mechanism that a. advances the agenda of the shareholders b. sets the boundaries for the management c. constrains the organization d. reconciles competing shareholder interests Answer: b Difficulty: challenging Page: 134 MC 7-3 Underperforming firms are pressured to achieve their potential by a. suppliers b. market forces c. customers d. environmental forces Answer: b Difficulty: easy Page: 134 MC 7-4 Corporate controls on the actions of managers are supported by a. competitors b. regulatory constraints c. economic conditions d. product market focus Answer: b Copyright © 2016 Pearson Canada Inc. 35 Difficulty: moderate Page: 134 MC 7-5 Boards of Directors are often not as effective as they might be because the board a. too peripheral to the organization b. is focused on meeting the needs of the shareholders c. is dominated by internal management d. does not make the day to day decisions of the corporation Answer: c Difficulty: moderate Page: 135 MC 7-6 One of the mechanisms used to align management interests with those of the shareholders is a. time off b. bonuses c. stock options d. larger budgets Answer: c Difficulty: easy Page: 135 MC 7-7 Corporate social responsibility refers to a corporation’s duty to a. compensate for benefits received from a harmful or unjust situation b. pay its fair share of taxes c. make a profit d. use its assets for the benefit of the shareholders Answer: a Difficulty: moderate Page: 137-138 MC 7-8 Expecting corporations to address social ills is often countered with the argument based on a. efficient use of resources b. furthers the firm’s self interest c. misappropriation of assets d. function of wealth creation Answer: c Difficulty: moderate Page: 137 Copyright © 2016 Pearson Canada Inc. 36 MC 7-9 Management preferences with respect to strategy serve to a. simplify the decision making process b. bridge the gap between the internal and external environment c. promote flexibility d. motivate the efforts of the firm Answer: d Difficulty: moderate Page: 140-141 MC 7-10 Managers with a strong need for achievement are most likely to favour a. stable performance b. aggressive growth targets c. following the competition d. the status quo Answer: b Difficulty: moderate Page: 141 MC 7-11 Managers with a strong need for security are most likely to favour a. stable performance b. leading the market c. aggressive growth targets d. a high debt/equity ratio Answer: a Difficulty: moderate Page: 141-142 MC 7-12 Managerial preferences have an indirect role on the a. strategic choices b. environmental assessment c. risk levels d. break-even point Answer: b Difficulty: easy Page: 142 MC 7-13 A frozen preference occurs when a manager a. abandons a strategic option b. follows a ‘wait and see’ position on a strategic issue c. takes a high-profile position on a strategic issue d. recycles a strategic option Copyright © 2016 Pearson Canada Inc. 37 Answer: c Difficulty: challenging Page: 147 MC 7-14 Managerial preferences are formed by the interaction of a. needs, wants, and requirements b. achievement goals, personal attributes, and the financial performance of the firm c. values, salary level, and Board preferences d. needs, beliefs, and situational pressures Answer: d Difficulty: easy Page: 151 MC 7-15 Strategic proposals that are extensions of the current strategy are most likely to generate a. controversy b. agreement c. disagreement d. negativity Answer: b Difficulty: moderate Page: 151 MC 7-16 One technique for addressing minor discrepancies between the required and observed strategic preferences of the management team is to a. rework all of the proposals b. reassign one of the managers c. combine two or three of the proposals d. compare the forecasts of firm performance Answer: d Difficulty: moderate Page: 151 MC 7-17 When persuasion fails to resolve moderate conflict between required and observed managerial preferences, modifying the strategy may not be the best solution because the new proposal a. has insufficient support to be successful b. could fail the test of product market focus c. will stall the analysis process d. has to be compatible with the environment and the resources Answer: d Difficulty: easy Page: 151 Copyright © 2016 Pearson Canada Inc. 38 MC 7-18 Organizational change will likely be required to resolve conflicts of a. mission over vision b. product market focus c. sustainability d. required and observed management preferences Answer: d Difficulty: easy Page: 151 MC 7-19 Minimal conflict between required/observed management preferences often occurs in situations involving a. strong leaders b. engaged Boards of Directors c. strong unions d. vocal stakeholders Answer: a Difficulty: moderate Page: 153 MC 7-20 A cohesive management group that endorses a strategic initiative inconsistent with the strategic needs of the business could be considered an example of a. a politicized work environment b. frozen preference c. group think d. network effects Answer: c Difficulty: moderate Page: 155 MC 7-21 The easiest way to reconcile the strategy/managerial preferences linkage is by a. taking organizational action b. asking the Board of Directors to decide c. modifying strategy d. deferring a decision Answer: a Difficulty: moderate Page: 148 Copyright © 2016 Pearson Canada Inc. 39 MC 7-22 Strategy needs to be consistent with the firm’s management preferences as well as with the management preferences of a. customers b. suppliers c. regulators d. competitors Answer: d Difficulty: easy Page: 157 MC 7-23 Persuasion and changes in job context are examples of a. informal leadership b. strategy modification techniques c. management functions d. organizational actions Answer: d Difficulty: easy Page: 158 MC 7-24 The purpose of management preference analysis is to establish the degree of fit between strategy and the a. motivations of the Board of Directors b. priorities of the stakeholders c. motivations of key managers d. resources of the firm Answer: c Difficulty: moderate Page: 158 MC 7-25 The objective of management preference analysis is to a. eliminate inconsistencies between the goals of the firm and managerial inclinations b. resolve conceptual biases c. foster internal commitment to the preferred strategic option d. achieve consistency between the motivations of key managers and strategy Answer: d Difficulty: moderate Page: 158 MC 7-26 An economic argument against Corporate Social Responsibility is the inefficient use of resources when employed for other purposes. This is also known as a. inefficiency b. mismanagement c. misallocation Copyright © 2016 Pearson Canada Inc. 40  d. misappropriation Answer: c Difficulty: moderate Page: 137 MC 7-27 What is Kenneth Andrews referring to when he says: “There is no way to divorce the decision determining the most sensible economic strategy for a company from the personal values of those who make the choice?” a. eliminating inconsistencies between the goals of the firm and managerial inclinations b. resolving conceptual biases c. corporate governance d. management preferences Answer: d Difficulty: challenging Page: 140 MC 7-28 Bravery, determination, tenacity, and confidence are associated elements of which character dimension? a. humanity b. temperance c. drive d. courage Answer: d Difficulty: moderate Page: 143 MC 7-29 If a firm operates from a position of self-interest and mistrust which impairs its ability to make good business decisions, the firm is lacking which character dimension? a. integrity b. collaboration c. accountability d. justice Answer: a Difficulty: moderate Page: 143 MC 7-30 “We need to control every input to our product” is an example of a management belief that impacts which of the following areas? a. goals b. product market focus c. value proposition d. core activities Copyright © 2016 Pearson Canada Inc. 41  Answer: d Difficulty: moderate Page: 148 Chapter Eight: Strategy and Organization Multiple Choice MC 8-1 Traditional approaches to strategy assume a. organizational constraints b. a stable workforce c. competitive neutrality d. a stable environment Answer: d Difficulty: easy Page: 161 MC 8-2 In dynamic environments, competitive advantages arise from a. dominant scale b. adaptive organizational capabilities c. attractive niche markets d. exploiting resources Answer: b Difficulty: moderate Page: 161 MC 8-3 Organizational capabilities refers to what an organization’s employees are a. compensated for b. collectively able to do c. trained for d. held responsible for Answer: b Difficulty: easy Page: 161 MC 8-4 Organizational capabilities are related to a. order and control b. culture and behaviour c. mission and vision d. finance and marketing Answer: b Copyright © 2016 Pearson Canada Inc. 42 Difficulty: easy Page: 161 MC 8-5 The example of business units, functional units, and geographic regions working together cooperatively illustrates a. boundary management b. innovation c. cross-unit synergies d. productivity Answer: c Difficulty: moderate Page: 164 MC 8-6 Speed and innovation are examples of a. employee competencies b. research and development tactics c. organizational capabilities d. managerial preferences Answer: c Difficulty: easy Page: 164 MC 8-7 To develop new organizational capabilities a. culture and behaviour will need to change b. new management will have to be hired c. employees will require additional compensation d. the business environment must remain stable Answer: a Difficulty: moderate Page: 165 MC 8-8 A cultural belief in employee empowerment suggests an organizational capability of a. cross-cultural effectiveness b. cost efficiency c. customer responsiveness d. product market focus Answer: c Difficulty: challenging Page: 166 Copyright © 2016 Pearson Canada Inc. 43 MC 8-9 Organizational capabilities can be influenced by a. quality and delivery promises made to customers b. resource gaps c. discretionary stakeholders d. management processes Answer: d Difficulty: easy Page: 167 MC 8-10 The interactions of managers with their subordinates is a(n) a. capability b. observable behaviour c. constraint d. unique resource Answer: b Difficulty: moderate Page: 168 MC 8-11 Organizations that are indifferent to market-based information are a. internally focused b. using competitive standards c. commodity-based d. driven by external challenges Answer: a Difficulty: moderate Page: 170 MC 8-12 Organizations that are driven by external challenges are a. using internal standards b. market focused c. resource-based d. focused on issues of culture Answer: b Difficulty: moderate Page: 170 MC 8-13 One action that can be taken to address a capability gap is to change the a. management focus b. performance standards c. organization structure d. mission statement Answer: c Copyright © 2016 Pearson Canada Inc. 44 Difficulty: easy Page: 172 MC 8-14 Reporting relationships are an element of an organization’s a. mission b. external environment c. procedures d. structure Answer: d Difficulty: easy Page: 172 MC 8-15 Within an organizational hierarchy, information and influence generally move a. from manager to subordinate b. vertically c. subordinate to subordinate d. horizontally Answer: b Difficulty: easy Page: 172 MC 8-16 If an organization is structured by product line, communication will be difficult across a. geographic regions b. functional units c. organizational boundaries d. product groups Answer: d Difficulty: moderate Page: 173 MC 8-17 Small organizations are typically organized by a. product b. business unit c. geographic region d. function Answer: d Difficulty: easy Page: 173 MC 8-18 Companies organized by function are good at a. coordinating activities b. focusing on product market issues c. cross-cultural management Copyright © 2016 Pearson Canada Inc. 45  d. scenario planning Answer: a Difficulty: easy Page: 174 MC 8-19 Global organizations using a worldwide functional structure can demonstrate a. a lack of sensitivity to local markets b. quick decision making c. good coordination between functional areas d. rapid deployment of new programs Answer: a Difficulty: moderate Page: 175 MC 8-20 One of the drawbacks of a product organization is a. the performance of each product line is hard to measure b. consumers have a single point of contact c. high need for cross-functional coordination d. management duplication Answer: d Difficulty: moderate Page: 176 MC 8-21 One of the strengths of geographically organized firms is a. global efficiency b. limited duplication of effort c. local responsiveness d. global standards Answer: c Difficulty: challenging Page: 176 MC 8-22 Matrix organizations are characterized by a. simplicity b. centralized control c. clear power balances d. ambiguity Answer: d Difficulty: moderate Page: 178 Copyright © 2016 Pearson Canada Inc. 46 MC 8-23 To increase organizational flexibility, firms in knowledge intensive industries have chosen to structure by a. core activity b. Matrix c. service standards d. Cell Answer: D Difficulty: easy Page: 179 MC 8-24 If an organization wants to improve its customer responsiveness, it should a. convert sequential processes to parallel processes b. create cross-unit information flows c. establish work routines that cross functional boundaries d. involve corporate-level executives in decision making Answer: C Difficulty: moderate Page: 183 MC 8-25 A change in organizational structure that results in a negative outcome is an example of a. a frozen preference b. group think c. recycling d. an unintended consequence Answer: d Difficulty: easy Page: 190 MC 8-26 A supporting cultural belief that new product ideas are precious will typically be supported by the following behavior(s): a. thorough data collection; thorough analysis b. decision making close to the consumer c. focusing on activities that add financial value d. financial and moral support for fledgling projects Answer: d Difficulty: moderate Page: 166 MC 8-27 The organizational capability to be a low cost producer will require which of the following cultural beliefs? a. we would rather be right than quick b. we believe in delegation of responsibility and authority c. everything comes down to money Copyright © 2016 Pearson Canada Inc. 47  d. new product ideas are precious Answer: c Difficulty: easy Page: 166 MC 8-28 If a firm operates in international markets with localized tastes and preferences, the firm ideally will organize its structure as a a. functional organization b. product organization c. geographic organization d. matrix organization Answer: c Difficulty: moderate Page: 176 MC 8-29 A knowledge-based firm that is organized by units that contain a project manager and a few employees as well as external contractors is said to be structured as a a. project team b. matrix c. special business unit d. cell Answer: d Difficulty: moderate Page: 179 MC 8-30 If an organization wants to create synergy between businesses, it should a. make it hard to kill new product ideas early in their life b. establish work routines that cut across functional boundaries c. create cross unit information and joint execution of projects d. mover customer related decision making lower in the organization Answer: c Difficulty: moderate Page: 183 Chapter Nine: Strategic Choice Multiple Choice MC 9-1 One of the key organizational functions of strategy is to a. reduce ambiguity b. anticipate market trends c. assist with governance Copyright © 2016 Pearson Canada Inc. 48  d. coordinate activities and behaviours Answer: d Difficulty: easy Page: 193 MC 9-2 In situations of environmental uncertainty, a pre-determined strategic direction a. helps the organization negotiate the environment b. limits the organization c. promotes stability within the organization d. meets the expectations of stakeholders Answer: b Difficulty: challenging Page: 194 MC 9-3 One of the drawbacks of strategy is that it a. increases ambiguity b. over-simplifies c. increases complexity d. can be a negotiating ploy Answer: b Difficulty: moderate Page: 194 MC 9-4 Which one of the following is a principal reason the expected outcomes of many strategies are not realized? a. flawed decision-making b. poor implementation c. government policy change d. negative shareholder reaction Answer: b Difficulty: moderate Page: 195 MC 9-5 An intended strategy is a. controlled and focused on the present b. action-oriented and opportunistic c. planned and controlled d. episodic and spontaneous Answer: c Difficulty: easy Page: 195 MC 9-6 An emergent strategy is Copyright © 2016 Pearson Canada Inc. 49  a. planned and controlled b. analytical and future oriented c. opportunistic and intuitive d. episodic and action-oriented Answer: c Difficulty: easy Page: 195 MC 9-7 The relationship between strategic planning and performance is a. positive b. subject to interpretation c. undetermined d. negative Answer: c Difficulty: moderate Page: 196 MC 9-8 One of the functions of the strategic planning process is to a. assess the internal and external environment b. set the annual budget c. prepare for the annual shareholders' meeting d. satisfy the shareholders Answer: a Difficulty: challenging Page: 196 MC 9-9 Unlike the budgeting process, strategic planning a. is a routine process b. is carried out at the unit level c. is highly standardized d. occurs at the organizational level Answer: d Difficulty: easy Page: 197 MC 9-10 What mechanism can be used to improve the strategic planning process? a. discuss at the weekly operations meeting b. include customers and suppliers in the process c. use an internal facilitator d. limit the number of people involved in the process Answer: b Difficulty: moderate Copyright © 2016 Pearson Canada Inc. 50 Page: 198 MC 9-11 One of the elements of a formal strategic plan should be a. a contingency plan b. employee opinion survey c. statement from the Chair of the Board of Directors d. a list of the officers of the company Answer: a Difficulty: easy Page: 199 MC 9-12 Critics of the strategic planning process argue that the outcomes are flawed due to a. the stability of most industries b. environmental turbulence c. inexperienced managers d. organizational resistance to change Answer: b Difficulty: moderate Page: 199 MC 9-13 Some would argue that the only sustainable competitive advantage for an organixation stems from its a. financial strength b. relationships c. learning ability d. supplier base Answer: c Difficulty: easy Page: 199 MC 9-14 When strategy is viewed as a learning process, the a. decision making is top down b. number of individuals involved decreases c. timeframe becomes longer d. range of perspectives considered increases Answer: d Difficulty: challenging Page: 199 MC 9-15 One of the problems associated with organizational resiliency is the a. process takes too long to complete b. need to divert resources to untested possibilities c. responsiveness of competitors d. regulatory burden Copyright © 2016 Pearson Canada Inc. 51 Answer: b Difficulty: easy Page: 200 MC 9-16 Errors in judgment with respect to decision making are the result of a. a perspective shift b. inexperience c. cultural norms d. cognitive biases Answer: d Difficulty: easy Page: 200 MC 9-17 Including sunk costs when analyzing the merits of strategic options is an example of a managerial bias known as a. overconfidence b. representativeness c. framing d. escalation of commitment Answer: d Difficulty: moderate Page: 200 MC 9-18 A tendency to seek information that confirms what the management believes to be true is a bias referred to as a. confirmatory b. framing c. availability d. anchoring Answer: a Difficulty: moderate Page: 202 MC 9-19 One of ways of limiting cognitive biases is to a. ask lots of questions b. restrict the amount of time spent on data collection c. accept that events which are concurrent are probably related d. count on the capabilities of the senior management team Answer: a Difficulty: moderate Page: 202-203 MC 9-20 Shared understandings in organizations emerge from Copyright © 2016 Pearson Canada Inc. 52  a. the minutes of the Board of Directors’ meetings b. industry reports c. employee opinion surveys d. dialogue Answer: d Difficulty: moderate Page: 204 MC 9-21 One of the tensions that exists between intended and emergent strategy relates to a. commitment and resources b. mission and vision c. exploration and exploitation d. supply and demand Answer: c Difficulty: easy Page: 205 MC 9-22 One of the barriers to strategic renewal is a. feedback processes b. diagnostic systems c. cognitive maps d. transference of learning Answer: d Difficulty: easy Page: 205 MC 9-23 Entrepreneurial organizations tend to need a. better feed-forward systems b. fewer procedures c. more networks d. stronger feedback systems Answer: d Difficulty: moderate Page: 206 MC 9-24 Mature organizations tend to need a. better feedback systems b. more planning c. stronger feed-forward systems d. bigger bureaucracies Answer: c Difficulty: moderate Page: 206 Copyright © 2016 Pearson Canada Inc. 53 MC 9-25 In situations that require managing the processes of feedback and exploitation, the most appropriate style of leadership is a. managerial b. transformational c. visionary d. transactional Answer: d Difficulty: moderate Page: 208 MC 9-26 Underestimating the complexity of problems, creating an illusion that we have management capabilities, is an example of which cognitive bias? a. false consensus b. framing c. overconfidence d. representativeness Answer: c Difficulty: moderate Page: 201 MC 9-27 If an individual tends to overestimate the degree to which he/she would have predicted the correct outcome, he/she exhibits: a. hindsight bias b. illusory correlation c. false consensus d. overconfidence Answer: a Difficulty: moderate Page: 201 MC 9-28 Shared understandings, mutual advancement and interactive systems are common integrating processes at the _______ level a. business unit b. group c. organization d. individual Answer: b Difficulty: easy Page: 204 MC 9-29 The Strategic Learnings Assessment Map (SLAM) depicts the tensions in strategic renewal between Copyright © 2016 Pearson Canada Inc. 54  a. employees, management and customers b. employees, suppliers and customers c. individuals, groups, and management d. individuals, groups and organizations Answer: d Difficulty: easy Page: 206 MC 9-30 Many organizations host annual offsite strategic planning sessions to a. promote creative thinking and reduce distractions from day-to-day business b. protect the privacy of the meeting from employees c. celebrate the success of the existing plan d. keep the process as routine and clear as possible Answer: a Difficulty: moderate Page: 197 Chapter Ten: Implementing Strategy – Change Agenda and Starting Conditions Multiple Choice MC 10-1 One of the tensions in the strategic planning process is between a. demands of suppliers and the needs of customers b. goals of the firm and the choice of tactics c. how a firm should organize itself and the preferences of the management d. what a firm needs to do and what it can do Answer: d Difficulty: easy Page: 214 MC 10-2 Strategy formulation and implementation are a. related to the preferences of the management b. integrated processes c. the concerns of senior management only d. discrete operations Answer: b Difficulty: moderate Page: 214 MC 10-3 Strategy should encompass a. demands of the marketplace Copyright © 2016 Pearson Canada Inc. 55  b. internal and external factors c. organizational capabilities d. economic factors Answer: b Difficulty: easy Page: 214 MC 10-4 One of the challenges faced by managers wishing to implement strategic change is a. financial constraints b. organizational readiness c. priorities of the Board of Directors d. likelihood of a competitive response Answer: b Difficulty: moderate Page: 215 MC 10-5 A key decision faced by managers in developing a strategic change plan is in deciding a. how to present the plan b. when to advise the Board of Directors c. who should lead the process d. how to inform employees Answer: c Difficulty: easy Page: 217 MC 10-6 One of the ways urgency can be classified is as a. present or future oriented b. mandated or discretionary c. anticipatory or reactive d. need to do or want to do Answer: c Difficulty: easy Page: 219 MC 10-7 One of the functions of the Diamond-E analysis process is to identify the a. change agenda b. priorities of the Board of Directors c. product market focus d. assess the strength of the competition Answer: a Difficulty: moderate Page: 220 Copyright © 2016 Pearson Canada Inc. 56 MC 10-8 One of the ways change needs can be classified is a. anticipatory or reactive b. pushed by the management or pulled by the employees c. behavioural or non-behavioural d. immediate or long-term Answer: c Difficulty: easy Page: 220 MC 10-9 In developing the starting position for a change agenda, it is useful to consider the a. mission of the organization b. reaction of key competitors c. impact on corporate governance d. degree of urgency Answer: d Difficulty: easy Page: 208 MC 10- In an organization that is currently outperforming its industry, the need for change is 10 likely to be a. mandated b. anticipatory c. reactionary d. urgent Answer: b Difficulty: moderate Page: 221 MC 10- In an organization that has been doing well but in recent months has started to see its 11 performance decline, the need for change is likely to be a. reactionary b. urgent c. anticipatory d. mandated Answer: a Difficulty: moderate Page: 221 MC 10- A crisis change situation is often characterized by 12 a. significant time pressure and low internal commitment b. high internal commitment and low management capability Copyright © 2016 Pearson Canada Inc. 57  c. high management capability and significant pressure d. low internal commitment and resistance to change Answer: b Difficulty: easy Page: 222 MC 10- A major challenge in crisis change situations is 13 a. uncommitted employees b. a lack of clarity c. seriously depleted resources d. a need for order Answer: c Difficulty: moderate Page: 224 MC 10- Anticipatory change situations are the most challenging for managers because there is 14 a. low management capability b. limited capacity for change c. a disconnect between strategy and vision d. no sense of urgency Answer: d Difficulty: easy Page: 227 MC 10- A key resource for managers in anticipatory change situations is 15 a. weak competitors b. personal credibility c. limited tenure in the position d. favourable economic conditions Answer: b Difficulty: moderate Page: 227 MC 10- In reactive change situations, managers need to concentrate on the 16 a. bottom line b. personal credibility c. priorities of the Board of Directors d. core business activities Copyright © 2016 Pearson Canada Inc. 58 Answer: d Difficulty: moderate Page: 228 MC 10- Organizational readiness refers to the 17 a. financial health of the organization b. the degree of focus associated with the change agenda c. preferences of the management team d. change commitment of employees Answer: d Difficulty: easy Page: 229 MC 10- When assessing the organizational readiness of employees, managers need to consider 18 a. commitment and capability b. passion and commitment c. stamina and engagement d. knowledge and experience Answer: a Difficulty: easy Page: 230 MC 10- One of the more troublesome aspects of resistance to change is 19 a. passive resistance b. a lack of clarity c. limited collaboration d. unexamined realities Answer: a Difficulty: moderate Page: 231 MC 10- The options for addressing gaps between available and required skills within the 20 workforce are fewer under what type of situation? a. anticipatory b. transactional c. reactionary d. crisis Answer: d Difficulty: moderate Page: 232 Copyright © 2016 Pearson Canada Inc. 59 MC 10- As part of their assessment of organizational readiness, managers need to consider 21 a. customer resistance b. supplier cooperation c. personal capabilities d. competitive reactions Answer: c Difficulty: easy Page: 232-223 MC 10- Urgency driven by personal motivations needs to be consistent with 22 a. product market focus b. competitive rivalry c. shareholder expectations d. the business agenda Answer: d Difficulty: moderate Page: 232 MC 10- When newly appointed executives actively promote a change agenda, the driver may be 23 a. shareholder pressures b. employee resistance c. competitive rivalry d. career considerations Answer: d Difficulty: moderate Page: 233 MC 10- One of the mechanisms used by executives to close gaps in their knowledge is to 24 a. appoint someone else to lead the change initiative b. reduce the scope of the change initiative c. hire a consultant d. extend the period of implementation Answer: c Difficulty: moderate Page: 233 MC 10- According to Kotter, one of the key tasks of effective general managers in change 25 situations is Copyright © 2016 Pearson Canada Inc. 60  a. managing their time b. addressing personal knowledge gaps c. evaluating the capabilities of their direct reports d. building networks Answer: d Difficulty: Page: 234 MC 1-26 If strategic performance is sliding and management is unsure where to start, the business could be experiencing the following type of change: a. status quo b. anticipatory c. reactive d. crisis Answer: c Difficulty: Moderate Page: 222 MC 1-27 If a firm is experiencing little or no time pressure and a low internal commitment for change, the need for change will be a. unnecessary b. anticipatory c. reactionary d. crisis Answer: b Difficulty: moderate Page: 222 MC 1-28 A lack of urgency to adopt and implement change by employees is often explained by a. being unaware of the need t