,Chapter 01: Strategic Management: Creating Competitive
Advantages
TRUE/FALSE QUESTIONS
Question 1
Apple's success under its former CEO, Steve Jobs, was largely attributed to the quality of
its leader. According to the text, this would be an example of the "romantic" perspective
of leadership.
A) True
B) False
Answer: A) True
Difficulty: 2 Medium | Learning Objective: 01-01 | Topic: Strategy and the Strategic
Management Process | Bloom's: Understand | AACSB: Analytical Thinking
Rationale: 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 Steve
Jobs' leadership, Apple emerged as one of the most valuable firms in the world.
Similarly, credit has been bestowed on leaders such as Bill Gates (Microsoft), Andrew
Grove (Intel), and Jeff Bezos (Amazon) for the tremendous accomplishments when they
led their firms.
Memory Aid: "Romantic view = Leader is the hero who makes the difference."
,Question 2
Strategic management consists of the analyses, decisions, and actions an organization
undertakes in order to create and sustain competitive advantages.
A) True
B) False
Answer: A) True
Difficulty: 1 Easy | Learning Objective: 01-01 | Topic: Strategy and the Strategic
Management Process | Bloom's: Remember | AACSB: Knowledge Application
Rationale: According to the textbook, this is the definition of strategic management.
Strategic management involves the ongoing processes of analysis (examining internal
and external environments), decisions (formulating strategies about how to compete),
and actions (implementing strategies to achieve organizational goals).
Memory Aid: "Strategic management = Analysis + Decisions + Actions."
Question 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.
A) True
B) False
Answer: A) True
, Difficulty: 2 Medium | Learning Objective: 01-01 | Topic: Strategy and the Strategic
Management Process | Bloom's: Understand | AACSB: Analytical Thinking
Rationale: Sustainable competitive advantage cannot be achieved through operational
effectiveness alone. The popular management innovations of the last two decades are
all about operational effectiveness. Each of these is important, but none leads to
sustainable competitive advantage because everyone is doing them. Strategy is all
about being different.
Clinical Pearl: Strategy requires making choices about how to compete uniquely, not
just doing the same things as competitors more efficiently.
Question 4
Trade-off decisions between effectiveness and efficiency are important in the practice of
strategic management.
A) True
B) False
Answer: A) True
Difficulty: 2 Medium | Learning Objective: 01-01 | Topic: Strategy and the Strategic
Management Process | Bloom's: Understand | AACSB: Analytical Thinking
Rationale: 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).
Memory Aid: "Effectiveness = Doing the right things; Efficiency = Doing things right."
Advantages
TRUE/FALSE QUESTIONS
Question 1
Apple's success under its former CEO, Steve Jobs, was largely attributed to the quality of
its leader. According to the text, this would be an example of the "romantic" perspective
of leadership.
A) True
B) False
Answer: A) True
Difficulty: 2 Medium | Learning Objective: 01-01 | Topic: Strategy and the Strategic
Management Process | Bloom's: Understand | AACSB: Analytical Thinking
Rationale: 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 Steve
Jobs' leadership, Apple emerged as one of the most valuable firms in the world.
Similarly, credit has been bestowed on leaders such as Bill Gates (Microsoft), Andrew
Grove (Intel), and Jeff Bezos (Amazon) for the tremendous accomplishments when they
led their firms.
Memory Aid: "Romantic view = Leader is the hero who makes the difference."
,Question 2
Strategic management consists of the analyses, decisions, and actions an organization
undertakes in order to create and sustain competitive advantages.
A) True
B) False
Answer: A) True
Difficulty: 1 Easy | Learning Objective: 01-01 | Topic: Strategy and the Strategic
Management Process | Bloom's: Remember | AACSB: Knowledge Application
Rationale: According to the textbook, this is the definition of strategic management.
Strategic management involves the ongoing processes of analysis (examining internal
and external environments), decisions (formulating strategies about how to compete),
and actions (implementing strategies to achieve organizational goals).
Memory Aid: "Strategic management = Analysis + Decisions + Actions."
Question 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.
A) True
B) False
Answer: A) True
, Difficulty: 2 Medium | Learning Objective: 01-01 | Topic: Strategy and the Strategic
Management Process | Bloom's: Understand | AACSB: Analytical Thinking
Rationale: Sustainable competitive advantage cannot be achieved through operational
effectiveness alone. The popular management innovations of the last two decades are
all about operational effectiveness. Each of these is important, but none leads to
sustainable competitive advantage because everyone is doing them. Strategy is all
about being different.
Clinical Pearl: Strategy requires making choices about how to compete uniquely, not
just doing the same things as competitors more efficiently.
Question 4
Trade-off decisions between effectiveness and efficiency are important in the practice of
strategic management.
A) True
B) False
Answer: A) True
Difficulty: 2 Medium | Learning Objective: 01-01 | Topic: Strategy and the Strategic
Management Process | Bloom's: Understand | AACSB: Analytical Thinking
Rationale: 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).
Memory Aid: "Effectiveness = Doing the right things; Efficiency = Doing things right."
