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Strategy Process Content Context 4th Edition by Bob de Wit - Test Bank
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,Chapter 1: What is Strategy?TRUE/FALSE
1. Strategic management includes a process by which organizations analyze and learn from their internal
and external environments.
ANS: T PTS: 1
2. Strategic thinking deals with the rigid and systematic parts of the strategic management process.
ANS: F PTS: 1
3. Strategic competitiveness is achieved when a firm successfully formulates and implements a value-
creating strategy.
ANS: T PTS: 1
4. Strategy is only concerned with what may happen in the future.
ANS: F PTS: 1
5. The goal of strategic management is to develop permanent competitive advantage.
ANS: F PTS: 1
6. Risk in terms of financial returns reflects an investor’s uncertainty about economic gains or losses that
will result from a particular investment.
ANS: T PTS: 1
7. Average returns are returns in excess of what an investor expects to earn from other investments with a
similar amount of risk.
ANS: F PTS: 1
8. The two strategic imperatives for organizations in today’s economic environment include opportunity
recognition and value creation.
ANS: T PTS: 1
9. The value created by a firm is distributed among a number of stakeholders.
ANS: T PTS: 1
10. Strategy is the overall concept for how a company organizes itself and its activities to conduct business
successfully, deliver superior returns to shareholders, and outperform rivals.
ANS: T PTS: 1
11. A sound strategy is easily recognized because it is geared toward a mission of making as much money
as possible.
, ANS: F PTS: 1
12. The manner in which strategies come about is referred to as the strategy process.
ANS: T PTS: 1
13. The strategy process is concerned with how, what, why and when type questions.
ANS: F PTS: 1
14. The role of strategy is to integrate a long-term vision for the company, the market and competitive
conditions encountered, and the company’s current situation and capabilities.
ANS: T PTS: 1
15. The fundamental goal of strategic management is superior performance.
ANS: T PTS: 1
16. Strategic management always involves planned change, therefore leaders do not need to concern
themselves with entrepreneurial activities.
ANS: F PTS: 1
17. Most organizations do not operate in dynamic environments therefore they can assume their strategic
plans will be implemented as they are written.
ANS: F PTS: 1
18. The strategic management processes of analysis and formulation are strictly sequential: Analyses must
be completed before formulation and not revisited once a strategy has begun to be created.
ANS: F PTS: 1
19. The outcome or product of the strategy process is referred to as the strategy content.
ANS: T PTS: 1
20. The increasing adoption of strategic management principles by organizations in the non-profit and
government sectors of the economy means that these types of organizations must identify financial
measures of their performance to gauge whether their strategies are working or not.
ANS: F PTS: 1
21. Strategies do not have to be implemented to be considered successful.
ANS: F PTS: 1
22. Strategic thinking involves organizations embracing the past, present and future.
ANS: T PTS: 1
, 23. One measure by which a non-profit organization might assess the effectiveness of its strategy is by
looking at how well its stakeholders are served.
ANS: T PTS: 1
24. Having a clear strategic plan negates any need for managers to understand the firm’s business model.
ANS: F PTS: 1
25. Strategic creation is always about change.
ANS: T PTS: 1
MULTIPLE CHOICE
1. Strategic management includes the following:
a. Establishment of strategic direction c. Strategic restructuring
b. Analysis of the internal environment d. All of the above
ANS: D PTS: 1
2. The strategy context is:
a. The external environment of the industry
b. The set of circumstances under which both the strategy process and strategy content are
determined
c. The combination of needs expressed by stakeholder, shareholders and customers
d. The economic environment of the country in which an organization operates
ANS: B PTS: 1
3. Strategic thinking is an activity that:
a. Involves shareholders shaping the way strategic leaders create strategy
b. Involves assessing the internal strengths of an organization
c. Involves pursuing a competitive advantage within an industry
d. Involves managers considering how they should organize their thinking to achieve a
successful strategic reasoning process
ANS: D PTS: 1
4. Strategic formation involves:
a. Managers organizing their strategizing activities to achieve a successful strategy formation
process
b. Structuring the organization to ensure it supports the strategy
c. Aligning the strategic control measures to monitor implementation
d. Gaining the support of stakeholders and shareholders for the proposed strategy
ANS: A PTS: 1
5. Strategic change, a necessary aspect of strategy, requires managers to:
a. Communicate with suppliers to ensure smooth relationships
b. Organize changes to achieve a successful strategic renewal process
c. Listen to the needs of customers
d. Control processes through monitoring and measurement initiatives
ANS: B PTS: 1
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