Chapter 1: Fundamentals of Strategic Management
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.
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.
