Strategic Management and Competitive Advantage, 6e (Barney)
Chapter 1 What is Strategy and the Strategic Management Process?
1) A firm's ________ is defined as its theory about how to gain competitive advantages.
A) objective
B) mission
C) vision
D) strategy
Answer: D
Diff: 1 Page Ref: 4
Learning Obj.: 1.1: Define Strategy and Describe the Strategic Management Process.
AACSB: Analytical Thinking
2) A sequential set of analyses and choices that can increase the likelihood that a firm will
choose a strategy that generates competitive advantages is the
A) organizational change process.
B) strategic management process.
C) mission statement process.
D) goal setting process.
Answer: B
Diff: 2 Page Ref: 5
Learning Obj.: 1.1: Define Strategy and Describe the Strategic Management Process.
AACSB: Analytical Thinking
3) A firm's ________ is its long-term purpose that defines both what it aspires to be in the long
run and what it wants to avoid in the meantime.
A) mission
B) strategy
C) objective
D) goal
Answer: A
Diff: 1 Page Ref: 5
Learning Obj.: 1.1: Define Strategy and Describe the Strategic Management Process.
AACSB: Analytical Thinking
4) The strategic management process begins when a firm
A) determines its objectives.
B) defines its mission.
C) makes a strategic choice.
D) implements its strategy.
Answer: B
Diff: 2 Page Ref: 5
Learning Obj.: 1.1: Define Strategy and Describe the Strategic Management Process.
AACSB: Analytical Thinking
1
Copyright © 2019 Pearson Education, Inc.
,5) Firms whose mission is central to all they do are known as ________ firms.
A) missionary
B) emergent
C) parity
D) visionary
Answer: D
Diff: 2 Page Ref: 6
Learning Obj.: 1.1: Define Strategy and Describe the Strategic Management Process.
AACSB: Analytical Thinking
6) From 1926 to 1995, visionary firms earned ________ returns compared to firms that were not
visionary firms.
A) substantially lower
B) substantially higher
C) marginally lower
D) equivalent
Answer: B
Diff: 2 Page Ref: 6
Learning Obj.: 1.1: Define Strategy and Describe the Strategic Management Process.
AACSB: Analytical Thinking
7) The mission statements of visionary firms
A) suggest that profit maximizing, while an important corporate objective, is not their primary
reason for existence.
B) suggest that profit maximizing is neither an important corporate objective nor their primary
reason for existence.
C) suggest that profit maximizing is their primary reason for existence.
D) suggest that value maximizing is their primary reason of existence.
Answer: A
Diff: 2 Page Ref: 6
Learning Obj.: 1.1: Define Strategy and Describe the Strategic Management Process.
AACSB: Analytical Thinking
8) Which of the following statements regarding firm mission is accurate?
A) While some firms have used their missions to develop strategies that create significant
competitive advantages, firm missions can hurt a firm's performance as well.
B) Virtually all firms have used missions to develop strategies that create significant competitive
advantages, while very few firms have used missions that can hurt their performance.
C) It is very rare for firms to be able to use their missions to develop strategies that create
significant competitive advantages, and most firm missions actually hurt their performance.
D) Missions tend to have very little impact on a firm's ability to create significant competitive
advantages.
Answer: A
Diff: 3 Page Ref: 6
Learning Obj.: 1.1: Define Strategy and Describe the Strategic Management Process.
AACSB: Analytical Thinking
2
Copyright © 2019 Pearson Education, Inc.
,9) ________ are specific measurable targets a firm can use to evaluate the extent to which it is
realizing its mission.
A) Strategies
B) Missions
C) Competitive advantages
D) Objectives
Answer: D
Diff: 1 Page Ref: 6
Learning Obj.: 1.1: Define Strategy and Describe the Strategic Management Process.
AACSB: Analytical Thinking
10) High quality objectives are those that are
A) tightly connected to elements of a firm's mission and are relatively easy to measure and track
over time.
B) difficult to measure and track over time.
C) non-existent.
D) not quantitative.
Answer: A
Diff: 2 Page Ref: 6
Learning Obj.: 1.1: Define Strategy and Describe the Strategic Management Process.
AACSB: Analytical Thinking
11) By conducting a(n) ________, a firm identifies the critical threats and opportunities in its
competitive environment.
A) internal analysis
B) competitive analysis
C) external analysis
D) strategic choice
Answer: C
Diff: 1 Page Ref: 7
Learning Obj.: 1.1: Define Strategy and Describe the Strategic Management Process.
AACSB: Analytical Thinking
12) ________ helps a firm understand which of its resources and capabilities are likely to be
sources of competitive advantage.
A) Competitive analysis
B) Internal analysis
C) Strategic choice
D) External analysis
Answer: B
Diff: 2 Page Ref: 7
Learning Obj.: 1.1: Define Strategy and Describe the Strategic Management Process.
AACSB: Analytical Thinking
3
Copyright © 2019 Pearson Education, Inc.
, 13) Actions firms take to gain competitive advantages in a single market or industry are known
as
A) business level strategies.
B) corporate level strategies.
C) diversification strategies.
D) strategy implementation.
Answer: A
Diff: 2 Page Ref: 7
Learning Obj.: 1.1: Define Strategy and Describe the Strategic Management Process.
AACSB: Analytical Thinking
14) Actions firms take to gain competitive advantages by operating in multiple markets or
industries simultaneously are known as
A) corporate level strategies.
B) diversification strategies.
C) business level strategies.
D) strategic alliance strategies.
Answer: A
Diff: 2 Page Ref: 7
Learning Obj.: 1.1: Define Strategy and Describe the Strategic Management Process.
AACSB: Analytical Thinking
15) ________ occurs when a firm adopts organizational policies and practices that are consistent
with its strategy.
A) Strategy formulation
B) Strategic choice
C) Strategy implementation
D) Strategic control
Answer: C
Diff: 1 Page Ref: 8
Learning Obj.: 1.1: Define Strategy and Describe the Strategic Management Process.
AACSB: Analytical Thinking
16) Green Frog is an environmentally friendly firm in the cosmetics industry that has decided to
undertake a strategic planning project. It wants to ensure that it performs the process correctly
and so intends to start the process with the first step of the strategic planning process, which is
A) defining its mission.
B) setting objectives.
C) measuring performance.
D) defining its business level strategy.
Answer: A
Diff: 1 Page Ref: 5
Learning Obj.: 1.1: Define Strategy and Describe the Strategic Management Process.
AACSB: Application of Knowledge
4
Copyright © 2019 Pearson Education, Inc.
Chapter 1 What is Strategy and the Strategic Management Process?
1) A firm's ________ is defined as its theory about how to gain competitive advantages.
A) objective
B) mission
C) vision
D) strategy
Answer: D
Diff: 1 Page Ref: 4
Learning Obj.: 1.1: Define Strategy and Describe the Strategic Management Process.
AACSB: Analytical Thinking
2) A sequential set of analyses and choices that can increase the likelihood that a firm will
choose a strategy that generates competitive advantages is the
A) organizational change process.
B) strategic management process.
C) mission statement process.
D) goal setting process.
Answer: B
Diff: 2 Page Ref: 5
Learning Obj.: 1.1: Define Strategy and Describe the Strategic Management Process.
AACSB: Analytical Thinking
3) A firm's ________ is its long-term purpose that defines both what it aspires to be in the long
run and what it wants to avoid in the meantime.
A) mission
B) strategy
C) objective
D) goal
Answer: A
Diff: 1 Page Ref: 5
Learning Obj.: 1.1: Define Strategy and Describe the Strategic Management Process.
AACSB: Analytical Thinking
4) The strategic management process begins when a firm
A) determines its objectives.
B) defines its mission.
C) makes a strategic choice.
D) implements its strategy.
Answer: B
Diff: 2 Page Ref: 5
Learning Obj.: 1.1: Define Strategy and Describe the Strategic Management Process.
AACSB: Analytical Thinking
1
Copyright © 2019 Pearson Education, Inc.
,5) Firms whose mission is central to all they do are known as ________ firms.
A) missionary
B) emergent
C) parity
D) visionary
Answer: D
Diff: 2 Page Ref: 6
Learning Obj.: 1.1: Define Strategy and Describe the Strategic Management Process.
AACSB: Analytical Thinking
6) From 1926 to 1995, visionary firms earned ________ returns compared to firms that were not
visionary firms.
A) substantially lower
B) substantially higher
C) marginally lower
D) equivalent
Answer: B
Diff: 2 Page Ref: 6
Learning Obj.: 1.1: Define Strategy and Describe the Strategic Management Process.
AACSB: Analytical Thinking
7) The mission statements of visionary firms
A) suggest that profit maximizing, while an important corporate objective, is not their primary
reason for existence.
B) suggest that profit maximizing is neither an important corporate objective nor their primary
reason for existence.
C) suggest that profit maximizing is their primary reason for existence.
D) suggest that value maximizing is their primary reason of existence.
Answer: A
Diff: 2 Page Ref: 6
Learning Obj.: 1.1: Define Strategy and Describe the Strategic Management Process.
AACSB: Analytical Thinking
8) Which of the following statements regarding firm mission is accurate?
A) While some firms have used their missions to develop strategies that create significant
competitive advantages, firm missions can hurt a firm's performance as well.
B) Virtually all firms have used missions to develop strategies that create significant competitive
advantages, while very few firms have used missions that can hurt their performance.
C) It is very rare for firms to be able to use their missions to develop strategies that create
significant competitive advantages, and most firm missions actually hurt their performance.
D) Missions tend to have very little impact on a firm's ability to create significant competitive
advantages.
Answer: A
Diff: 3 Page Ref: 6
Learning Obj.: 1.1: Define Strategy and Describe the Strategic Management Process.
AACSB: Analytical Thinking
2
Copyright © 2019 Pearson Education, Inc.
,9) ________ are specific measurable targets a firm can use to evaluate the extent to which it is
realizing its mission.
A) Strategies
B) Missions
C) Competitive advantages
D) Objectives
Answer: D
Diff: 1 Page Ref: 6
Learning Obj.: 1.1: Define Strategy and Describe the Strategic Management Process.
AACSB: Analytical Thinking
10) High quality objectives are those that are
A) tightly connected to elements of a firm's mission and are relatively easy to measure and track
over time.
B) difficult to measure and track over time.
C) non-existent.
D) not quantitative.
Answer: A
Diff: 2 Page Ref: 6
Learning Obj.: 1.1: Define Strategy and Describe the Strategic Management Process.
AACSB: Analytical Thinking
11) By conducting a(n) ________, a firm identifies the critical threats and opportunities in its
competitive environment.
A) internal analysis
B) competitive analysis
C) external analysis
D) strategic choice
Answer: C
Diff: 1 Page Ref: 7
Learning Obj.: 1.1: Define Strategy and Describe the Strategic Management Process.
AACSB: Analytical Thinking
12) ________ helps a firm understand which of its resources and capabilities are likely to be
sources of competitive advantage.
A) Competitive analysis
B) Internal analysis
C) Strategic choice
D) External analysis
Answer: B
Diff: 2 Page Ref: 7
Learning Obj.: 1.1: Define Strategy and Describe the Strategic Management Process.
AACSB: Analytical Thinking
3
Copyright © 2019 Pearson Education, Inc.
, 13) Actions firms take to gain competitive advantages in a single market or industry are known
as
A) business level strategies.
B) corporate level strategies.
C) diversification strategies.
D) strategy implementation.
Answer: A
Diff: 2 Page Ref: 7
Learning Obj.: 1.1: Define Strategy and Describe the Strategic Management Process.
AACSB: Analytical Thinking
14) Actions firms take to gain competitive advantages by operating in multiple markets or
industries simultaneously are known as
A) corporate level strategies.
B) diversification strategies.
C) business level strategies.
D) strategic alliance strategies.
Answer: A
Diff: 2 Page Ref: 7
Learning Obj.: 1.1: Define Strategy and Describe the Strategic Management Process.
AACSB: Analytical Thinking
15) ________ occurs when a firm adopts organizational policies and practices that are consistent
with its strategy.
A) Strategy formulation
B) Strategic choice
C) Strategy implementation
D) Strategic control
Answer: C
Diff: 1 Page Ref: 8
Learning Obj.: 1.1: Define Strategy and Describe the Strategic Management Process.
AACSB: Analytical Thinking
16) Green Frog is an environmentally friendly firm in the cosmetics industry that has decided to
undertake a strategic planning project. It wants to ensure that it performs the process correctly
and so intends to start the process with the first step of the strategic planning process, which is
A) defining its mission.
B) setting objectives.
C) measuring performance.
D) defining its business level strategy.
Answer: A
Diff: 1 Page Ref: 5
Learning Obj.: 1.1: Define Strategy and Describe the Strategic Management Process.
AACSB: Application of Knowledge
4
Copyright © 2019 Pearson Education, Inc.
