TEST BANK FOR
STRATEGIC
MANAGEMENT: TEXT
TH
AND CASES 12
EDITION BY DESS,
McNAMARA, EISNER,
AND SAUERWALD
McGRAW-HILL
,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
5. According to the 12th edition, how has Artificial Intelligence (AI) transformed strategic
management?
A) AI has made human strategic planning obsolete
B) AI provides new tools for data-driven analysis, predictive modeling, and real-
time strategic decision-making
C) AI only affects operational decisions, not strategic ones
D) AI eliminates the need for environmental scanning
Answer: B
Rationale: The 12th edition emphasizes AI as a transformative tool in strategic
management, enabling more sophisticated environmental scanning, competitive
STRATEGIC
MANAGEMENT: TEXT
TH
AND CASES 12
EDITION BY DESS,
McNAMARA, EISNER,
AND SAUERWALD
McGRAW-HILL
,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
5. According to the 12th edition, how has Artificial Intelligence (AI) transformed strategic
management?
A) AI has made human strategic planning obsolete
B) AI provides new tools for data-driven analysis, predictive modeling, and real-
time strategic decision-making
C) AI only affects operational decisions, not strategic ones
D) AI eliminates the need for environmental scanning
Answer: B
Rationale: The 12th edition emphasizes AI as a transformative tool in strategic
management, enabling more sophisticated environmental scanning, competitive
