Test bank for strategic management theory and practice 4th edition by parnell

According to the strategic management model, strategic control occurs before strategy formulation.. Most strategic management scholars have endorsed an “artistic” perspective on strategy

Test Bank For Strategic Management Theory

and Practice 4th Edition by Parnell

Chapter 1: Fundamentals of Strategic Management

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1 The term strategy refers primarily to activities at the top level of the

organization

*a True

b False

2 Managers who are too busy to engage in strategic planning should wait until they have more free time in their schedules

a True

*b False

3 According to the strategic management model, strategic control occurs

before strategy formulation

a True

*b False

4 An effective strategy is built on the foundation of the organization’s

comparative advantage, the mechanism whereby the organization seeks to earn a profit by selling its goods

a True

*b False

5 Identifying a firm’s business model is rarely difficult in general terms, but can become more complex when intricate details are considered

*a True

b False

6 The gap between intended and realized strategies usually results from

middle management ineffectiveness

a True

*b False

7 Most strategic management scholars have endorsed an “artistic” perspective

on strategy formulation

a True

*b False

8 The industrial organization perspective on firm performance emphasizes the fit between the firm and its environment

a True

*b False

9 Resource-based theory primarily focuses on individual firms rather than the competitive environment

*a True

b False

10 A firm’s ability to enjoy strategic benefits over an extended period of time is known as strategic positioning

a True

*b False

11 The contingency theory perspective on firm performance emphasizes the structure of the industry

a True

*b False

12 Both industrial organization theory and resource-based theory are

incorporated into the case analysis process

*a True

b False

13 Corporate governance refers to the board of directors, institutional investors, and large shareholders known as blockholders who monitor firm strategies

*a True

b False

14 Strategic decisions may be short-term or long-term in focus

a True

*b False

15 The chief executive is held responsible for the effects of strategic decisions

*a True

b False

16 The notion of strategy assumes

a that an organization has a plan

b that an organization’s strategic managers understand the source of its

competitive advantage

c that the organization’s members understand the reason for its existence

*d All of the above

17 The notion of strategy assumes

a that experts in strategic planning are employed by the organization

b that managers have time to develop formal strategic plans

*c that the organizational already has a plan

d All of the above

18 The concept of strategic management includes

a top management’s analysis of the environment in which the organization operate

b the plan for strategy execution

c strategic control efforts

*d All of the above

19 Which of the following is not one of the steps in the strategic management process?

a Execute the strategy

b Control the strategy as necessary

c Conduct an internal analysis

*d All of the above are steps in the strategic management process

20 The mechanism whereby the organization seeks to earn a profit by selling its goods is known as

a comparative advantage

b competitive advantage

*c the business model

d none of the above

21 Which of the following is not a factor usually associated with an effective strategy?

*a Top managers rely on outside strategic planners for creativity and analysis

b Plans for putting the strategy into action are designed with specificity before

it is implemented

c Strategic managers understand how the organization’s resources translate into strengths and weaknesses

d Possible future changes in the proposed strategy are evaluated before the strategy is adopted

22 Which of the following is not a factor usually associated with an effective strategy?

a The strategy is consistent with them mission and the goals of the

organization

b Plans for putting the strategy into action are designed with specificity before

it is implemented

c Strategic managers understand how the organization’s resources translate into strengths and weaknesses

*d All of the above are factors usually associated with an effective strategy

23 The strategy originally planned by management is known as the

a purposed strategy

*b intended strategy

c realized strategy

d impact strategy

24 The strategy actually implemented by management is known as the

a intended strategy

b emergent strategy

*c realized strategy

d effective strategy

25 A gap between the intended and realized strategies

a rarely exists

b exists only when management does a poor job of research

c suggests middle management ineffectiveness

*d None of the above

26 Which strategic planning approach has been endorsed by most strategy scholars?

a Conceptual perspective

b Artistic perspective

*c Scientific perspective

d None of the above

27 According to the scientific perspective of strategic planning,

a strategy formulation is not as critical as strategy execution

*b the business environment is seen as largely objective, analyzable, and at least somewhat predictable

c creativity is vital and can only be generated when flexibility is applied to the strategy process

d All of the above

28 Which of the following perspectives assumes that industry structure is the primary influence on firm performance?

*a Industrial organization theory

b Resource-based theory

c Contingency theory

d None of the above

29 Which of the following perspectives assumes that the firm’s unique

combination of strategic resources is the primary influence on firm performance?

a Industrial organization theory

*b Resource-based theory

c Contingency theory

d None of the above

30 Which of the following perspectives may be viewed as a “middle ground” between the other two?

a Industrial organization theory

b Resource-based theory

*c Contingency theory

d None of the above

31 Which of the following distinctions is not associated with strategic decision-making?

a It represents a systematic, comprehensive analysis

b It involves choices

*c It is both short-term and long-term oriented

d It is distinctively opportunistic

32 Which of the following distinctions is not typically associated with strategic decision-making?

a It represents a systematic, comprehensive analysis

b It involves choices

c It is long-term oriented

*d It involves decisions made by the CEO, not the top management team

33 Strategic decisions are

a usually made by the top executive alone

*b the responsibility of the top executive

c generally subject to middle management approval

d All of the above

34 Top management teams

a tend to include fewer managers in centralized organizations

b usually include mostly top level managers

c may include non-managers

*d All of the above

35 Top management teams

a usually make better decisions as a group than the CEO could make alone

b may include middle managers

c may include members of the board of directors

*d All of the above

Type: E

36.Should steps in the strategic management process be completed sequentially?

a The answer depends on one’s perspective Outsiders analyzing a firm should apply a systematic approach that progresses through these steps in order Doing so develops to a holistic understanding of the firm, its industry, and its strategic

challenges In organizations, however, strategies are being formulated,

implemented, and controlled simultaneously while external and internal factors are being assessed and reassessed In addition, changes in one stage of the strategic management process will inevitably affect other stages as well After a planned strategy is implemented, for example, it often requires modification as conditions change Hence, because these steps are so tightly intertwined, insiders treat all of the steps as a single integrated, ongoing process

Type: E

37.If intended strategies are often not realized, then why should top managers invest time and energy into the strategic management process?

a Answers should emphasize that although intended strategies are not always realized, the gap between intended and realized strategies can be narrowed through

effective planning Strategic planning should not be ignored just because all

contingencies cannot be predicted accurately

Type: E

38.Should strategic managers adopt a scientific perspective or an artistic

perspective on strategy? Explain

a There are two different perspectives on the approach that top executives should take to strategic management Most strategy scholars have endorsed a scientific perspective, whereby strategic managers are encouraged to systematically assess the firm’s external environment and evaluate the pros and cons of myriad

alternatives before formulating strategy The business environment is seen as largely objective, analyzable, and at least somewhat predictable As such, strategic managers should follow a systematic process of environmental, competitive, and internal analysis, and build the organization’s strategy on this foundation

According to the artistic perspective on strategy, the lack of environmental

predictability and the fast pace of change render elaborate strategy planning as suspect at best Instead, strategists should incorporate large doses of creativity and intuition in order to design a comprehensive strategy for the firm Henry

Mintzberg’s notion of a craftsman—encompassing individual skill, dedication, and perfection through mastery of detail—embodies the artistic model The strategy artist senses the state of the organization, interprets its subtleties, and seeks to mold its strategy like a potter molds clay The artist visualizes the outcomes associated with various alternatives and ultimately charts a course based on holistic thinking, intuition, and imagination “Strategy artists” may even view strategic planning exercises as time poorly spent and may not be as likely as those in the science school to make the effort necessary to maximize the value of a formal planning process The text and most scholars follow a scientific perspective, although this does not mean that the artistic view is not relevant Arguments will vary

Type: E

39.Which of the three major theoretical influences industrial organization (IO) theory, resource-based theory, and contingency theory provides the most accurate perspective on firm performance Provide examples to support your answer

a Answers will vary It should be noted that all three influences contribute to the strategic management process

Type: E

40.Who makes strategic decisions? Who is responsible for the outcomes?

Explain

a Answers should emphasize the fact that top executives rarely make strategic decisions alone, but instead confer with other members of the top management team However, the top executive alone is responsible for the strategic decision