Test Bank for Strategic Management: A Competitive Advantage Approach, Concepts and Cases, 17th Edition

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Strategic Management:A Competitive AdvantageApproach, Concepts andCasesSeventeenth EditionFred R. DavidForest R. DavidMeredith E. DavidTest Bank (Download only) forStrategic Management: ACompetitive Advantage Approach,Concepts and Cases, 17eRevised by RamachandranSubramanian

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1Strategic Management: A Competitive Advantage Approach, 17e(David/David)Chapter 1The Nature of Strategic Management1) The goal of strategic management is toA) achieve competitive advantage.B) maintain competitive advantage.C) achieve and maintaincompetitive advantage.D) eliminate competitive advantage.E) eliminate and abolish competitive advantage.Answer: CDiff: 2LO: 1.1: Describe the strategic-management process.AACSB: Analytical thinking2) Strategic management focuses on integratingfunctional areas to achieve organizationalsuccess. Which of the following is NOT one of the functional areas that is the focus of strategicmanagement?A) marketingB) finance and accountingC) production and operationsD) research and developmentE) organizational behaviorAnswer: EDiff: 2LO: 1.1: Describe the strategic-management process.AACSB: Reflective thinking3) What can be defined as the art and science of formulating, implementing and evaluating cross-functional decisions that enable an organization to achieve its objectives?A) Strategy formulationB) Strategy evaluationC) Strategy implementationD) Strategic managementE) Strategic leadingAnswer: DDiff: 1LO: 1.1: Describe the strategic-management process.AACSB: Reflective thinking

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24) To gain ________ firms need to provide unique products and services.A) a bank loanB) governmental legitimacyC) a sustainable competitive advantageD) competitorsE) export ordersAnswer: CDiff: 2LO: 1.1: Describe the strategic-management process.AACSB: Analytical thinking5) The strategic-management process is becoming more widely used byA) small firms.B) nonprofit institutions.C) governmental organizations.D) multinational conglomerates.E) all types of organizations.Answer: EDiff: 2LO: 1.1: Describe the strategic-management process.AACSB: Reflective thinking6) An organization should take a(n) ________ approach in its industry.A) adversarial rather than a collegialB) collegial rather than an adversarialC) reactive rather thana proactiveD) proactive rather than a reactiveE) cooperative rather than a competitiveAnswer: DDiff: 2LO: 1.1: Describe the strategic-management process.AACSB: Reflective thinking7) The strategic-management processA) occurs once a year.B) is asemiannual process.C) is a continuous process.D) applies mostly to companies with sales greater than $100 million.E) applies mostly to small businesses.Answer: CDiff: 3LO: 1.1: Describe the strategic-management process.AACSB: Analytical thinking

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38) Sometimes ________ is used to refer to strategic formulation, implementation and evaluation,with ________ referring only to strategic formulation.A) strategic planning; strategic managementB) strategic planning; strategic processingC) strategic management; strategic planningD) strategic management; strategic processingE) strategic implementation; strategic focusAnswer: CDiff: 2LO: 1.1: Describe the strategic-management process.AACSB: Reflective thinking9) The terms "strategic management" and "strategic planning" are used synonymously in thistext.Answer: TRUEDiff: 1LO: 1.1: Describe the strategic-management process.AACSB: Reflective thinking10) Strategic management focuses on integrating management, marketing, finance andaccounting, production and operations, research and development, and information systems toachieve organizational success.Answer: TRUEDiff: 1LO: 1.1: Describe the strategic-management process.AACSB: Reflective thinking11) Optimizing for tomorrow the trends of today is the purpose of strategic management.Answer: FALSEDiff: 2LO: 1.1: Describe the strategic-management process.AACSB: Reflective thinking12) U.S. firms are not being aggressively challenged in the computer industry.Answer: FALSEDiff: 2LO: 1.1: Describe the strategic-management process.AACSB: Analytical thinking13) By occasionally monitoring external events, companies should be able to identify whenchange is required.Answer: FALSEDiff: 3LO: 1.1: Describe the strategic-management process.AACSB: Analytical thinking

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414) Application of the strategic-management process is typically more formal in larger and well-established organizations.Answer: TRUEDiff: 2LO: 1.1: Describe the strategic-management process.AACSB: Reflective thinking15) To be effective, strategic-management must be a process that familiarizes managers andemployees with the key strategic issues facing an organization and the feasible alternatives forresolving those issues.Answer: TRUEDiff: 3LO:1.1: Describe the strategic-management process.AACSB: Analytical thinking16) The most effective strategic management is ritualistic, predictable, and formal.Answer: FALSEDiff: 3LO: 1.1: Describe the strategic-management process.AACSB: Analytical thinking17) All firms have a strategy, even if it is informal, unstructured, and sporadic.Answer: TRUEDiff: 2LO: 1.1: Describe the strategic-management process.AACSB: Reflective thinking18) Despite its great popularity in the 1980s, strategicplanning by corporate America is now avaluable though rare activity.Answer: FALSEDiff: 2LO: 1.1: Describe the strategic-management process.AACSB: Analytical thinking19) The strengths and weaknesses of an organization are determined relative to the strengths andweaknesses of its competitors.Answer: TRUEDiff: 2LO: 1.1: Describe the strategic-management process.AACSB: Reflective thinking

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520) Compare and contrast strategic planning with strategic management.Answer: The term "strategic planning" is more often used in the business world, whereas"strategic management" is often used in academia. Sometimes, strategic management is used torefer to strategy formulation, implementation and evaluation, with strategic planning referringonly to strategy formulation.Diff: 2LO: 1.1: Describe the strategic-management process.AACSB: Reflective thinking21) Discuss some forces that influence the formality of the strategic-management process.Answer: Application of the strategic-management processis typically more formal in larger andwell-established organizations. Formality refers to the extent that participants, responsibilities,authority, duties, and approach are specified. Smaller businesses tend to be less formal. Firmsthat compete in complex, rapidly changing environments, such as technology companies, tend tobe more formal in strategic planning. Firms that have many divisions, products, markets andtechnologies also tend to be more formal in applying strategic-management concepts. Greaterformality in applying the strategic-management process is usually positively associated withorganizational success.Diff: 3LO: 1.1: Describe the strategic-management process.AACSB: Analytical thinking22) During what stage of strategic management is a firm's specific internal strengths andweaknesses determined?A) FormulationB) ImplementationC) EvaluationD) FeedbackE) Goal-settingAnswer: ADiff: 2LO: 1.2: Discuss the three stages of strategy formulation, implementation, and evaluationactivities.AACSB: Reflective thinking23) An important activity in ________ is taking corrective action.A) strategy evaluationB) strategy implementationC) strategy formulationD) strategy leadershipE) strategic analysisAnswer: ADiff: 2LO: 1.2: Discuss the three stages of strategy formulation, implementation, and evaluationactivities.AACSB: Reflective thinking

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624) What step in the strategic management process involves mobilizing employees and managersto put strategies into action?A) Strategy formulationB) Strategy evaluationC) Strategy implementationD) Strategic advantageE) Competitive advantageAnswer: CDiff: 2LO: 1.2: Discuss the three stages of strategy formulation, implementation, and evaluationactivities.AACSB: Interpersonal relations and teamwork25) What types of skills are especially critical for successful strategy implementation?A) InterpersonalB) MarketingC) TechnicalD) ConceptualE) VisionaryAnswer: ADiff: 2LO: 1.2: Discuss the three stages of strategy formulation,implementation, and evaluationactivities.AACSB: Interpersonal relations and teamwork26) Which phase of strategic management is most strongly associated with "action"?A) Strategy formulationB) Strategy implementationC) Strategy evaluationD) Competing advantagesE) Measuring performanceAnswer: BDiff: 1LO: 1.2: Discuss the three stages of strategy formulation, implementation, and evaluationactivities.AACSB: Reflective thinking

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727) ________ is NOT a strategy-implementation activity.A) Taking corrective actionsB) Establishing annual objectivesC) Devising policiesD) Allocating resourcesE) Motivating employeesAnswer: ADiff: 2LO: 1.2: Discuss the three stages of strategy formulation, implementation, and evaluationactivities.AACSB: Analytical thinking28) Strategy evaluation is necessary becauseA) internal and external factors are constantly changing.B) the SEC requires strategy evaluation.C) success today is a guarantee of success tomorrow.D) the IRS requires strategy evaluation.E) firms have limited resources.Answer: ADiff: 2LO: 1.2: Discuss the three stages of strategy formulation, implementation, and evaluationactivities.AACSB: Analytical thinking29) In which phase of strategic management are annual objectives especially important?A) ReductionB) FormulationC) ImplementationD) EvaluationE) PolicyAnswer: CDiff: 2LO: 1.2: Discuss the three stages of strategy formulation, implementation, and evaluationactivities.AACSB: Reflective thinking30) In which phaseof strategic management are long-term objectives especially important?A) FormulationB) ControlC) EvaluationD) ImplementationE) ManagementAnswer: ADiff: 2LO: 1.2: Discuss the three stages of strategy formulation, implementation, and evaluationactivities.AACSB: Reflective thinking

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831) The decision to expand or diversify operations is a strategy-formulation issue.Answer: TRUEDiff: 2LO: 1.2: Discuss the three stages of strategy formulation, implementation, and evaluationactivities.AACSB: Analytical thinking32) The decision to merge is a strategy-formulation issue, but the decision to form a joint ventureis a strategy-implementation issue.Answer: FALSEDiff: 1LO: 1.2: Discuss the three stages of strategy formulation, implementation, and evaluationactivities.AACSB: Reflective thinking33) Strategy implementation is often considered to be the most difficult stage in the strategic-management process.Answer: TRUEDiff: 2LO: 1.2: Discuss the three stages of strategy formulation, implementation, and evaluationactivities.AACSB: Reflective thinking34) The final stage in strategic management is strategy implementation.Answer: FALSEDiff: 1LO: 1.2: Discuss the three stages of strategy formulation, implementation, and evaluationactivities.AACSB: Reflective thinking35) In most large organizations that engage in strategic management, the formulation,implementation, and evaluation of strategy activities occur at three hierarchical levels: corporate;divisional or strategic business unit; and functional.Answer: TRUEDiff: 2LO: 1.2: Discuss the three stages of strategy formulation, implementation, and evaluationactivities.AACSB: Reflective thinking36) One of the fundamental strategy evaluation activities is reviewing the external and internalfactors on which strategies are based.Answer: TRUEDiff: 2LO: 1.2: Discuss the three stages of strategy formulation, implementation, and evaluationactivities.AACSB: Reflective thinking

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937) Many organizations mistakenly spend more time and effort on the implementation of a plan,than on the formulation of the plan itself.Answer: FALSEDiff: 3LO: 1.2: Discuss the three stages of strategy formulation, implementation, and evaluationactivities.AACSB: Analytical thinking38) Which stage in the strategic-management process is the most difficult? Explain why.Answer: Strategy implementation is the most difficult stage in the strategic-management processbecause it requires personal discipline, commitment, and sacrifice. Successful strategyimplementation hinges upon managers' ability to motivate employees, which is more of an artthan a science. Interpersonal skills are especially critical for successful strategy implementation.Diff: 3LO: 1.2: Discuss the three stages of strategy formulation, implementation, and evaluationactivities.AACSB: Reflective thinking39) The strategic-management process represents a(n) ________, ________, and ________approach for determining an enterprise's future direction.A) logical; systematic; subjectiveB) intuitive; disorganized; subjectiveC) logical; systematic; objectiveD) intuitive; disorganized; objectiveE) inconsistent; systematic; subjectiveAnswer: CDiff: 2LO: 1.3: Explain the need for integrating analysis and intuition in strategic management.AACSB: Reflective thinking40) Which statement best describes intuition?A) It alone should be used in decision making.B) It represents a minor factor in decision making integrated with analysis.C) It should be coupled with analysis in decision making.D) It is better than analysis in decision making.E) It is management by ignorance.Answer: CDiff: 3LO: 1.3: Explain the need for integrating analysis and intuition in strategic management.AACSB: Analytical thinking

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1041) Strategicmanagement is an attempt to organize qualitative and quantitative information in away that allows effective decisions to be made under conditions of uncertainty.Answer: TRUEDiff: 2LO: 1.3: Explain the need for integrating analysis and intuition in strategic management.AACSB: Reflective thinking42) Firms, like organisms, must be "adept at adapting" or they will not survive.Answer: TRUEDiff: 2LO: 1.3: Explain the need for integrating analysis and intuition in strategic management.AACSB: Reflective thinking43) Once an effective strategy is designed, modifications are rarely required.Answer: FALSEDiff: 2LO: 1.3: Explain the need for integrating analysis and intuition in strategic management.AACSB: Analytical thinking44) Analytical and intuitive thinking complement each other.Answer: TRUEDiff: 1LO: 1.3: Explain the need for integrating analysis and intuition in strategic management.AACSB: Reflective thinking45) According to Albert Einstein, "Knowledge is far more important than intuition."Answer: FALSEDiff: 1LO: 1.3: Explain the need for integrating analysis and intuition in strategic management.AACSB: Reflective thinking46) According to Peter Drucker "Imagination is more important than knowledge, becauseknowledge islimited, whereas imagination embraces the entire world."Answer: FALSEDiff: 2LO: 1.3: Explain the need for integrating analysis and intuition in strategic management.AACSB: Reflective thinking47) Management by intuition can be defined as operatingfrom the "I've-already-made-up-my-mind-don't-bother-me-with-the-facts mode."Answer: FALSEDiff: 2LO: 1.3: Explain the need for integrating analysis and intuition in strategic management.AACSB: Reflective thinking

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1148) An objective, logical, systematic, and non-intuitive approach for making major decisions inan organization is a way to describe the strategic-management process.Answer: FALSEDiff: 3LO: 1.3: Explain the need for integrating analysis and intuition in strategic management.AACSB: Reflective thinking49) Discuss the value of integrating intuition and analysis.Answer: Most organizations can benefit from strategic management, which is based onintegrating intuition and analysis in decision making. Choosing an intuitive or analytic approachto decision making is not an either-or proposition. Managers at all levels in an organization injecttheir intuition and judgment into strategic-management analyses. Analytical thinking andintuitive thinking complement each other. Operating from the "I've-already-made-up-my-mind-don't-bother-me-with-the-facts" mode is not management by intuition; it is management byignorance. Drucker says, "I believe in intuition only if you discipline it. 'Hunch' artists, whomake a diagnosis, but don't check itout with facts, are the ones in medicine who kill people, andin management kill businesses." In a sense, the strategic-management process is an attempt bothto duplicate what goes on in the mind of a brilliant, intuitive person who knows the business, andassimilates and integrates that knowledge using analysis to formulate effective strategies.Diff: 2LO: 1.3: Explain the need for integrating analysis and intuition in strategic management.AACSB: Analytical thinking50) Which individuals are most responsible for the success and failure of an organization?A) StrategistsB) Financial plannersC) Personnel directorsD) StakeholdersE) Human resource managersAnswer: ADiff: 1LO: 1.4: Define and give examples of key terms in strategic management.AACSB: Reflective thinking51) What are enduring statements of purpose that distinguish one business from other similarfirms?A) PoliciesB) Mission statementsC) ObjectivesD) RulesE) Employee conduct guidelinesAnswer: BDiff: 2LO: 1.4: Define and giveexamples of key terms in strategic management.AACSB: Written and oral communication

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1252) An organization's vision statementA) is a constant reminder to its employees of why the organization exists.B) broadly charts the future direction of an organization.C) addresses the basic question: "What is our business?"D) answers the question: "What do we want to become?"E) is mandated by law.Answer: DDiff: 1LO: 1.4: Define and give examples of key terms in strategic management.AACSB: Written and oralcommunication53) Generally, external opportunities and threats areA) uncontrollable by a single organization.B) unable to have a significant impact on an organization.C) not worth monitoring and evaluating.D) key functions in strategy implementation.E) key functions in strategy exploitation.Answer: ADiff: 2LO: 1.4: Define and give examples of key terms in strategic management.AACSB: Reflective thinking54) Specific results an organization seeks to achieve in pursuing its basic mission areA)strategies.B) rules.C) objectives.D) policies.E) tenets.Answer: CDiff: 1LO: 1.4: Define and give examples of key terms in strategic management.AACSB: Reflective thinking55) Internal ________ are controllable activities in an organization thatare performed especiallywell.A) opportunitiesB) incompetenciesC) strengthsD) objectivesE) factorsAnswer: CDiff: 1LO: 1.4: Define and give examples of key terms in strategic management.AACSB: Reflective thinking

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1356) What are the means by which long-term objectives will be achieved?A) StrategiesB) StrengthsC) WeaknessesD) PoliciesE) OpportunitiesAnswer: ADiff: 2LO: 1.4: Define and give examples of key terms in strategic management.AACSB: Reflective thinking57) Long-term objectives should be all of the following EXCEPTA) measurable.B) continually changing.C) reasonable.D) challenging.E) consistent.Answer: BDiff: 2LO: 1.4: Define and give examples of key terms in strategic management.AACSB: Reflective thinking58) Which of the following is NOT a type of strategy developed from a SWOT analysis?A) Strengths/OpportunitiesB) Strengths/ThreatsC) Threats/OpportunitiesD) Weaknesses/OpportunitiesE) Weaknesses/ThreatsAnswer: CDiff: 1LO: 1.4: Define and give examples ofkey terms in strategic management.AACSB: Reflective thinking59) Because of the success of the iPad and the iPhone, Apple has tremendous brand recognition.Brand recognition is one of Apple'sA) weaknesses.B) opportunities.C) strengths.D) threats.E) strategies.Answer: CDiff: 3LO: 1.4: Define and give examples of key terms in strategic management.AACSB: Reflective thinking

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1460) Which of the following is often considered to be the first step in strategic planning?A) Developing a vision statementB) Establishing goals and objectivesC) Making a profitD) Developing a mission statementE) Determining opportunities and threatsAnswer: ADiff: 1LO: 1.4: Define and give examples of key terms in strategic management.AACSB: Written and oral communication61) Uber has fewer fixed assets than the typical taxi fleet company. This type of benefit that acompany such as Uber has is called a(n)A) business moat.B) first-mover advantage.C) asset margin.D) strategic advantage.E) competitive advantage.Answer: EDiff: 2LO: 1.4: Define and give examples of key terms in strategic management.AACSB: Written and oral communication62) Anything that a firm does especially well compared to rival firms is referred to asA) competitive advantage.B) comparative disadvantage.C) opportunity cost.D) unsustainable advantage.E) an external opportunity.Answer: ADiff: 1LO: 1.4: Define and give examples of key terms in strategic management.AACSB: Reflective thinking63) The fact that Apple has no manufacturing facilities of its ownA) has caused it to build up massive debt on its balance sheet.B) has enabled it to remain financially lean.C) has been problematic for Apple in terms of debt.D) illustrates that having more fixed assets than rival firms,can provide major competitiveadvantages in a global recession.E) means that it is in the same position as Sony.Answer: BDiff: 2LO: 1.4: Define and give examples of key terms in strategic management.AACSB: Reflective thinking

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