Strategic Management: Text and Cases, 9e (Dess)
Chapter 1 Strategic Management: Creating
Competitive Advantages
1) Lands' End's failure under the leadership of Ms. Frederica Marchionni was said to be a direct
result of the quality of her leadership. According to the text, this would be an example of the
"romantic" perspective of leadership.
Answer: TRUE
Explanation: In the romantic view of leadership, the implicit assumption is that the leader is the
key force in determining an organization's success or lack thereof. Under Ms. Marchionni's
leadership, the company reported a 19.5-million-dollar loss for 2016 after having reported a
73.8-million-dollar profit for the previous year under its previous CEO.
Difficulty: 2 Medium
Topic: Strategy and the Strategic Management Process
Learning Objective: 01-01 The definition of strategic management and its four key attributes.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
2) Strategic management consists of the analyses, decisions, and actions an organization
undertakes in order to create and sustain competitive advantages.
Answer: TRUE
Explanation: According to the textbook, this is the definition of strategic management.
Difficulty: 1 Easy
Topic: Strategy and the Strategic Management Process
Learning Objective: 01-01 The definition of strategic management and its four key attributes.
Bloom's: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
3) Management innovations such as total quality, just-in-time, benchmarking, business process
reengineering, and outsourcing are important but not enough for building sustainable competitive
advantage.
Answer: TRUE
Explanation: Sustainable competitive advantage cannot be achieved through operational
effectiveness alone. Popular management innovations of the last two decades like total quality,
just-in-time, benchmarking, business process reengineering, and outsourcing are concerned with
operational effectiveness.
Difficulty: 2 Medium
Topic: Strategy and the Strategic Management Process
Learning Objective: 01-01 The definition of strategic management and its four key attributes.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
4) Trade-off decisions between effectiveness and efficiency are important in the practice of
,strategic management.
Answer: TRUE
Explanation: The fourth attribute of strategic management is that it involves the recognition of
trade-offs between effectiveness and efficiency. Some authors have referred to this as the
difference between doing the right thing (effectiveness) and doing things right (efficiency).
Difficulty: 2 Medium
Topic: Strategy and the Strategic Management Process
Learning Objective: 01-01 The definition of strategic management and its four key attributes.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
5) According to Henry Mintzberg, a management scholar, most firms do not realize their original
intended strategy.
Answer: TRUE
Explanation: Henry Mintzberg states that the intended strategy rarely survives in its original
form. Unforeseen environmental developments, unanticipated resource constraints, or changes in
managerial preferences may result in at least some parts of the intended strategy remaining
unrealized. On the other hand, good managers will want to take advantage of a new opportunity
presented by the environment, even if it was not part of the original set of intentions.
Difficulty: 2 Medium
Topic: Strategy and the Strategic Management Process
Learning Objective: 01-02 The strategic management process and its three interrelated and
principal activities.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
6) The final realized strategy of a firm is a combination of deliberate and time-tested strategies
only.
Answer: FALSE
Explanation: Realized strategy is that strategy of a firm in which organizational decisions are
determined by both analysis and unforeseen environmental developments, unanticipated resource
constraints, and/or changes in managerial preferences.
Difficulty: 2 Medium
Topic: Strategy and the Strategic Management Process
Learning Objective: 01-02 The strategic management process and its three interrelated and
principal activities.
Bloom's: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
,7) Strategy analysis is the study of only the big picture external environments of the firm.
Answer: FALSE
Explanation: Strategy analysis is the study of the external and internal environments of a firm,
and their fit with organizational vision and goals.
Difficulty: 2 Medium
Topic: Strategy and the Strategic Management Process
Learning Objective: 01-02 The strategic management process and its three interrelated and
principal activities.
Bloom's: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
8) All successful firms compete and outperform their rivals by developing bases for competitive
advantage, which can be achieved only through cost leadership.
Answer: FALSE
Explanation: Successful firms strive to develop bases for competitive advantage, which can be
achieved through cost leadership and/or differentiation as well as by focusing on a narrow or
industrywide market segment.
Difficulty: 2 Medium
Topic: Strategy and the Strategic Management Process
Learning Objective: 01-02 The strategic management process and its three interrelated and
principal activities.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
9) The three primary participants in corporate governance are: (1) the shareholders, (2) the
management (led by the chief executive officer), and (3) the employees.
Answer: FALSE
Explanation: The primary participants are: (1) the shareholders, (2) the management (led by the
chief executive officer), and (3) the board of directors.
Difficulty: 2 Medium
Topic: Corporate Governance
Learning Objective: 01-03 The strategic role of corporate governance and stakeholder
management, as well as how "symbiosis" can be achieved among an organization's stakeholders.
Bloom's: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
, 10) Decisions sby sboards sof sdirectors sare salways sconsistent swith sshareholder sinterests.
Answer: s FALSE
Explanation: s The sboard sof sdirectors s(BOD) sare sthe selected srepresentatives sof sthe sshareholders,
scharged swith sensuring sthat sthe sinterests sand smotives sof smanagement sare saligned swith sthose sof sthe
sowners s(i.e., sshareholders). sRecent sscandals shave sresulted sin scriticism sand scynicism sthat sthe sBOD
sfulfills sthis scharge.
Difficulty: s2 sMedium
Topic: s Corporate sGovernance
Learning sObjective: s 01-03 sThe sstrategic srole sof scorporate sgovernance sand sstakeholder
smanagement, sas swell sas show s"symbiosis" scan sbe sachieved samong san sorganization's sstakeholders.
sBloom's: s Understand
AACSB: s Analytical sThinking
sAccessibility: s Keyboard sNavigation
11) Ensuring seffective scorporate sgovernance srequires san seffective sand sengaged sboard sof
sdirectors, suninvolved sshareholders, sand sproper smanagerial srewards sand sincentives.
Answer: s FALSE
Explanation: s We sfocus son sthree simportant smechanisms sto sensure seffective scorporate
sgovernance: s(1) san seffective sand sengaged sboard sof sdirectors, s(2) sshareholder sactivism, sand s(3)
sproper smanagerial srewards sand sincentives.
Difficulty: s2 sMedium
Topic: s Corporate sGovernance
Learning sObjective: s 01-03 sThe sstrategic srole sof scorporate sgovernance sand sstakeholder
smanagement, sas swell sas show s"symbiosis" scan sbe sachieved samong san sorganization's sstakeholders.
sBloom's: s Understand
AACSB: s Analytical sThinking
sAccessibility: s Keyboard sNavigation
12) Social sresponsibility sis sthe sidea sthat sorganizations sare sonly saccountable sto sstockholders.
Answer: s FALSE
Explanation: s Social sresponsibility sis sthe sexpectation sthat sbusinesses sor sindividuals swill sstrive sto
simprove sthe soverall swelfare sof ssociety. sFrom sthe sperspective sof sa sbusiness, sthis smeans sthat
smanagers smust stake sactive ssteps sto smake ssociety sbetter sby svirtue sof sthe sbusiness sbeing sin
sexistence.
Difficulty: s2 sMedium
Topic: s Corporate sSocial sResponsibility sand sSustainability
Learning sObjective: s 01-04 sThe simportance sof ssocial sresponsibility, sincluding senvironmental
ssustainability, sand show sit scan senhance sa scorporation's sinnovation sstrategy.
Bloom's: s Analyze
AACSB: s Analytical sThinking
sAccessibility: s Keyboard sNavigation
Chapter 1 Strategic Management: Creating
Competitive Advantages
1) Lands' End's failure under the leadership of Ms. Frederica Marchionni was said to be a direct
result of the quality of her leadership. According to the text, this would be an example of the
"romantic" perspective of leadership.
Answer: TRUE
Explanation: In the romantic view of leadership, the implicit assumption is that the leader is the
key force in determining an organization's success or lack thereof. Under Ms. Marchionni's
leadership, the company reported a 19.5-million-dollar loss for 2016 after having reported a
73.8-million-dollar profit for the previous year under its previous CEO.
Difficulty: 2 Medium
Topic: Strategy and the Strategic Management Process
Learning Objective: 01-01 The definition of strategic management and its four key attributes.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
2) Strategic management consists of the analyses, decisions, and actions an organization
undertakes in order to create and sustain competitive advantages.
Answer: TRUE
Explanation: According to the textbook, this is the definition of strategic management.
Difficulty: 1 Easy
Topic: Strategy and the Strategic Management Process
Learning Objective: 01-01 The definition of strategic management and its four key attributes.
Bloom's: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
3) Management innovations such as total quality, just-in-time, benchmarking, business process
reengineering, and outsourcing are important but not enough for building sustainable competitive
advantage.
Answer: TRUE
Explanation: Sustainable competitive advantage cannot be achieved through operational
effectiveness alone. Popular management innovations of the last two decades like total quality,
just-in-time, benchmarking, business process reengineering, and outsourcing are concerned with
operational effectiveness.
Difficulty: 2 Medium
Topic: Strategy and the Strategic Management Process
Learning Objective: 01-01 The definition of strategic management and its four key attributes.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
4) Trade-off decisions between effectiveness and efficiency are important in the practice of
,strategic management.
Answer: TRUE
Explanation: The fourth attribute of strategic management is that it involves the recognition of
trade-offs between effectiveness and efficiency. Some authors have referred to this as the
difference between doing the right thing (effectiveness) and doing things right (efficiency).
Difficulty: 2 Medium
Topic: Strategy and the Strategic Management Process
Learning Objective: 01-01 The definition of strategic management and its four key attributes.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
5) According to Henry Mintzberg, a management scholar, most firms do not realize their original
intended strategy.
Answer: TRUE
Explanation: Henry Mintzberg states that the intended strategy rarely survives in its original
form. Unforeseen environmental developments, unanticipated resource constraints, or changes in
managerial preferences may result in at least some parts of the intended strategy remaining
unrealized. On the other hand, good managers will want to take advantage of a new opportunity
presented by the environment, even if it was not part of the original set of intentions.
Difficulty: 2 Medium
Topic: Strategy and the Strategic Management Process
Learning Objective: 01-02 The strategic management process and its three interrelated and
principal activities.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
6) The final realized strategy of a firm is a combination of deliberate and time-tested strategies
only.
Answer: FALSE
Explanation: Realized strategy is that strategy of a firm in which organizational decisions are
determined by both analysis and unforeseen environmental developments, unanticipated resource
constraints, and/or changes in managerial preferences.
Difficulty: 2 Medium
Topic: Strategy and the Strategic Management Process
Learning Objective: 01-02 The strategic management process and its three interrelated and
principal activities.
Bloom's: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
,7) Strategy analysis is the study of only the big picture external environments of the firm.
Answer: FALSE
Explanation: Strategy analysis is the study of the external and internal environments of a firm,
and their fit with organizational vision and goals.
Difficulty: 2 Medium
Topic: Strategy and the Strategic Management Process
Learning Objective: 01-02 The strategic management process and its three interrelated and
principal activities.
Bloom's: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
8) All successful firms compete and outperform their rivals by developing bases for competitive
advantage, which can be achieved only through cost leadership.
Answer: FALSE
Explanation: Successful firms strive to develop bases for competitive advantage, which can be
achieved through cost leadership and/or differentiation as well as by focusing on a narrow or
industrywide market segment.
Difficulty: 2 Medium
Topic: Strategy and the Strategic Management Process
Learning Objective: 01-02 The strategic management process and its three interrelated and
principal activities.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
9) The three primary participants in corporate governance are: (1) the shareholders, (2) the
management (led by the chief executive officer), and (3) the employees.
Answer: FALSE
Explanation: The primary participants are: (1) the shareholders, (2) the management (led by the
chief executive officer), and (3) the board of directors.
Difficulty: 2 Medium
Topic: Corporate Governance
Learning Objective: 01-03 The strategic role of corporate governance and stakeholder
management, as well as how "symbiosis" can be achieved among an organization's stakeholders.
Bloom's: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
, 10) Decisions sby sboards sof sdirectors sare salways sconsistent swith sshareholder sinterests.
Answer: s FALSE
Explanation: s The sboard sof sdirectors s(BOD) sare sthe selected srepresentatives sof sthe sshareholders,
scharged swith sensuring sthat sthe sinterests sand smotives sof smanagement sare saligned swith sthose sof sthe
sowners s(i.e., sshareholders). sRecent sscandals shave sresulted sin scriticism sand scynicism sthat sthe sBOD
sfulfills sthis scharge.
Difficulty: s2 sMedium
Topic: s Corporate sGovernance
Learning sObjective: s 01-03 sThe sstrategic srole sof scorporate sgovernance sand sstakeholder
smanagement, sas swell sas show s"symbiosis" scan sbe sachieved samong san sorganization's sstakeholders.
sBloom's: s Understand
AACSB: s Analytical sThinking
sAccessibility: s Keyboard sNavigation
11) Ensuring seffective scorporate sgovernance srequires san seffective sand sengaged sboard sof
sdirectors, suninvolved sshareholders, sand sproper smanagerial srewards sand sincentives.
Answer: s FALSE
Explanation: s We sfocus son sthree simportant smechanisms sto sensure seffective scorporate
sgovernance: s(1) san seffective sand sengaged sboard sof sdirectors, s(2) sshareholder sactivism, sand s(3)
sproper smanagerial srewards sand sincentives.
Difficulty: s2 sMedium
Topic: s Corporate sGovernance
Learning sObjective: s 01-03 sThe sstrategic srole sof scorporate sgovernance sand sstakeholder
smanagement, sas swell sas show s"symbiosis" scan sbe sachieved samong san sorganization's sstakeholders.
sBloom's: s Understand
AACSB: s Analytical sThinking
sAccessibility: s Keyboard sNavigation
12) Social sresponsibility sis sthe sidea sthat sorganizations sare sonly saccountable sto sstockholders.
Answer: s FALSE
Explanation: s Social sresponsibility sis sthe sexpectation sthat sbusinesses sor sindividuals swill sstrive sto
simprove sthe soverall swelfare sof ssociety. sFrom sthe sperspective sof sa sbusiness, sthis smeans sthat
smanagers smust stake sactive ssteps sto smake ssociety sbetter sby svirtue sof sthe sbusiness sbeing sin
sexistence.
Difficulty: s2 sMedium
Topic: s Corporate sSocial sResponsibility sand sSustainability
Learning sObjective: s 01-04 sThe simportance sof ssocial sresponsibility, sincluding senvironmental
ssustainability, sand show sit scan senhance sa scorporation's sinnovation sstrategy.
Bloom's: s Analyze
AACSB: s Analytical sThinking
sAccessibility: s Keyboard sNavigation
