,Chapter 1: Strategic Management – Creating Competitive
Advantages
PART A: MULTIPLE CHOICE QUESTIONS (35 Questions)
1. According to the 12th edition of Strategic Management, which of the following best
defines a firm's "strategy"?
A) A detailed annual operating budget
B) A set of goal-directed actions a firm takes to gain and sustain superior
performance relative to competitors
, C) A company's mission statement posted on its website
D) The total amount of financial resources allocated to marketing
Answer: B
Rationale: The 12th edition defines strategy as the integrated set of goal-directed
actions a firm takes to gain and sustain superior performance relative to competitors.
Strategy involves analysis, decisions, and actions — not just budgets, mission statements,
or resource levels.
Difficulty: Easy
Learning Objective: 1.1
2. The three ongoing processes of the strategic management process are:
A) Planning → Organizing → Leading
B) Analysis → Decisions → Actions
C) Inputs → Operations → Outputs
D) Research → Development → Marketing
Answer: B
Rationale: The strategic management process begins with analysis (internal/external
environment), moves to strategic decisions (formulation), and concludes with actions
(implementation). These three processes are ongoing and iterative.
Difficulty: Easy
Learning Objective: 1.1
3. Which of the following best describes the "romantic view" of leadership?
A) External economic conditions determine organizational success
, B) The leader is the key force behind organizational success or failure
C) Industry structure is the primary driver of profitability
D) Organizational culture is irrelevant to strategic outcomes
Answer: B
Rationale: The romantic view attributes organizational outcomes primarily to the
leader's actions, decisions, vision, and personality. Steve Jobs at Apple is often cited as an
example.
Difficulty: Easy
Learning Objective: 1.2
4. The "external control view" of leadership suggests that organizational success is
primarily determined by:
A) CEO charisma and vision
B) Favorable industry conditions, market growth, and government policies
C) Employee motivation and culture
D) The quality of middle management
Answer: B
Rationale: The external control view holds that external factors — industry structure,
regulations, economic cycles, competitor actions — primarily determine organizational
success, not leadership actions.
Difficulty: Easy
Learning Objective: 1.2
Advantages
PART A: MULTIPLE CHOICE QUESTIONS (35 Questions)
1. According to the 12th edition of Strategic Management, which of the following best
defines a firm's "strategy"?
A) A detailed annual operating budget
B) A set of goal-directed actions a firm takes to gain and sustain superior
performance relative to competitors
, C) A company's mission statement posted on its website
D) The total amount of financial resources allocated to marketing
Answer: B
Rationale: The 12th edition defines strategy as the integrated set of goal-directed
actions a firm takes to gain and sustain superior performance relative to competitors.
Strategy involves analysis, decisions, and actions — not just budgets, mission statements,
or resource levels.
Difficulty: Easy
Learning Objective: 1.1
2. The three ongoing processes of the strategic management process are:
A) Planning → Organizing → Leading
B) Analysis → Decisions → Actions
C) Inputs → Operations → Outputs
D) Research → Development → Marketing
Answer: B
Rationale: The strategic management process begins with analysis (internal/external
environment), moves to strategic decisions (formulation), and concludes with actions
(implementation). These three processes are ongoing and iterative.
Difficulty: Easy
Learning Objective: 1.1
3. Which of the following best describes the "romantic view" of leadership?
A) External economic conditions determine organizational success
, B) The leader is the key force behind organizational success or failure
C) Industry structure is the primary driver of profitability
D) Organizational culture is irrelevant to strategic outcomes
Answer: B
Rationale: The romantic view attributes organizational outcomes primarily to the
leader's actions, decisions, vision, and personality. Steve Jobs at Apple is often cited as an
example.
Difficulty: Easy
Learning Objective: 1.2
4. The "external control view" of leadership suggests that organizational success is
primarily determined by:
A) CEO charisma and vision
B) Favorable industry conditions, market growth, and government policies
C) Employee motivation and culture
D) The quality of middle management
Answer: B
Rationale: The external control view holds that external factors — industry structure,
regulations, economic cycles, competitor actions — primarily determine organizational
success, not leadership actions.
Difficulty: Easy
Learning Objective: 1.2
