Strategic Management: Text and Cases, 9e (Dess)
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Chapter 1 Strategic Management: Creating Competitive Advantages
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1) Lands' End's failure under the leadership of Ms. Frederica Marchionni was said to be a direct
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result of the quality of her leadership. According to the text, this would be an example of the
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"romantic" perspective of leadership.
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Answer: TRUE l l
Explanation: In the romantic view of leadership, the implicit assumption is that the leader is the
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key force in determining an organization's success or lack thereof. Under Ms. Marchionni's
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leadership, the company reported a 19.5-million-dollar loss for 2016 after having reported a
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73.8-million-dollar profit for the previous year under its previous CEO.
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Difficulty: 2 Medium ll ll
Topic: Strategy and the Strategic Management Process
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Learning Objective: 01-01 The definition of strategic management and its four key attributes.
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Bloom's: Understand
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AACSB: Analytical Thinking l l ll
Accessibility: Keyboard Navigation
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2) Strategic management consists of the analyses, decisions, and actions an organization
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undertakes in order to create and sustain competitive advantages.
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Answer: TRUE l l
Explanation: According to the textbook, this is the definition of strategic management.
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Difficulty: 1 Easy
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Topic: Strategy and the Strategic Management Process
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Learning Objective: 01-01 The definition of strategic management and its four key attributes.
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Bloom's: Remember
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AACSB: Knowledge Application l l ll
Accessibility: Keyboard Navigation
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3) Management innovations such as total quality, just-in-time, benchmarking, business process
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reengineering, and outsourcing are important but not enough for building sustainable competitive
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advantage.
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Answer: TRUE l l
Explanation: Sustainable competitive advantage cannot be achieved through operational
l l ll ll ll ll ll ll ll
effectiveness alone. Popular management innovations of the last two decades like total quality,
ll ll ll ll ll ll ll ll ll ll ll ll ll
just-in-time, benchmarking, business process reengineering, and outsourcing are concerned with
ll ll ll ll ll ll ll ll ll ll
operational effectiveness.
ll ll
Difficulty: 2 Medium ll ll
Topic: Strategy and the Strategic Management Process
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Learning Objective: 01-01 The definition of strategic management and its four key attributes.
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Bloom's: Understand
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AACSB: Analytical Thinking l l ll
Accessibility: Keyboard Navigation
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4) Trade-off decisions between effectiveness and efficiency are important in the practice of
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,strategic management. ll
Answer: TRUE l l
Explanation: The fourth attribute of strategic management is that it involves the recognition of
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trade-offs between effectiveness and efficiency. Some authors have referred to this as the
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difference between doing the right thing (effectiveness) and doing things right (efficiency).
ll ll ll ll ll ll ll ll ll ll ll ll
Difficulty: 2 Medium ll ll
Topic: Strategy and the Strategic Management Process
l l ll ll ll ll ll
Learning Objective: 01-01 The definition of strategic management and its four key attributes.
ll l l ll ll ll ll ll ll ll ll ll ll
Bloom's: Understand
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AACSB: Analytical Thinking l l ll
Accessibility: Keyboard Navigation
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5) According to Henry Mintzberg, a management scholar, most firms do not realize their original
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intended strategy.
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Answer: TRUE l l
Explanation: Henry Mintzberg states that the intended strategy rarely survives in its original
l l ll ll ll ll ll ll ll ll ll ll ll
form. Unforeseen environmental developments, unanticipated resource constraints, or changes in
ll ll ll ll ll ll ll ll ll ll
managerial preferences may result in at least some parts of the intended strategy remaining
ll ll ll ll ll ll ll ll ll ll ll ll ll ll
unrealized. On the other hand, good managers will want to take advantage of a new opportunity
ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll
presented by the environment, even if it was not part of the original set of intentions.
ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll
Difficulty: 2 Medium ll ll
Topic: Strategy and the Strategic Management Process
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Learning Objective: 01-02 The strategic management process and its three interrelated and
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principal activities.
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Bloom's: Understand l l
AACSB: Analytical
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Thinking
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Accessibility: Keyboard Navigation l l ll
6) The final realized strategy of a firm is a combination of deliberate and time-tested strategies
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only.
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Answer: FALSE l l
Explanation: Realized strategy is that strategy of a firm in which organizational decisions are
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determined by both analysis and unforeseen environmental developments, unanticipated resource
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constraints, and/or changes in managerial preferences.
ll ll ll ll ll ll
Difficulty: 2 Medium ll ll
Topic: Strategy and the Strategic Management Process
l l ll ll ll ll ll
Learning Objective: 01-02 The strategic management process and its three interrelated and
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principal activities.
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Bloom's: Understand l l
AACSB: Knowledge Application l l ll
Accessibility: Keyboard Navigation
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,7) Strategy analysis is the study of only the big picture external environments of the firm.
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Answer: FALSE l l
Explanation: Strategy analysis is the study of the external and internal environments of a firm,
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and their fit with organizational vision and goals.
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Difficulty: 2 Medium ll ll
Topic: Strategy and the Strategic Management Process
l l ll ll ll ll ll
Learning Objective: 01-02 The strategic management process and its three interrelated and
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principal activities.
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Bloom's: Understand l l
AACSB: Knowledge Application l l ll
Accessibility: Keyboard Navigation
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8) All successful firms compete and outperform their rivals by developing bases for competitive
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advantage, which can be achieved only through cost leadership.
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Answer: FALSE l l
Explanation: Successful firms strive to develop bases for competitive advantage, which can be
l l ll ll ll ll ll ll ll ll ll ll ll
achieved through cost leadership and/or differentiation as well as by focusing on a narrow or
ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll
industrywide market segment.
ll ll ll
Difficulty: 2 Medium ll ll
Topic: Strategy and the Strategic Management Process
l l ll ll ll ll ll
Learning Objective: 01-02 The strategic management process and its three interrelated and
ll l l ll ll ll ll ll ll ll ll ll
principal activities.
ll ll
Bloom's: Understand l l
AACSB: Analytical
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Thinking
l
Accessibility: Keyboard Navigation l l ll
9) The three primary participants in corporate governance are: (1) the shareholders, (2) the
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management (led by the chief executive officer), and (3) the employees.
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Answer: FALSE l l
Explanation: The primary participants are: (1) the shareholders, (2) the management (led by the
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chief executive officer), and (3) the board of directors.
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Difficulty: 2 Medium ll ll
Topic: Corporate Governance
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Learning Objective: 01-03 The strategic role of corporate governance and stakeholder
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management, as well as how "symbiosis" can be achieved among an organization's stakeholders.
ll ll ll ll ll ll ll ll ll ll ll ll ll
Bloom's: Understand
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AACSB: Knowledge Application l l ll
Accessibility: Keyboard Navigation
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, 10) Decisions by boards of directors are always consistent with shareholder interests.
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Answer: FALSE l l
Explanation: The board of directors (BOD) are the elected representatives of the shareholders,
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charged with ensuring that the interests and motives of management are aligned with those of the
ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll
owners (i.e., shareholders). Recent scandals have resulted in criticism and cynicism that the BOD
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fulfills this charge.
ll ll ll
Difficulty: 2 Medium ll ll
Topic: Corporate Governance
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Learning Objective: 01-03 The strategic role of corporate governance and stakeholder
ll l l ll ll ll ll ll ll ll ll
management, as well as how "symbiosis" can be achieved among an organization's stakeholders.
ll ll ll ll ll ll ll ll ll ll ll ll ll
Bloom's: Understand
ll l l
AACSB: Analytical Thinking l l ll
Accessibility: Keyboard Navigation
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11) Ensuring effective corporate governance requires an effective and engaged board of
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directors, uninvolved shareholders, and proper managerial rewards and incentives.
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Answer: FALSE l l
Explanation: We focus on three important mechanisms to ensure effective corporate
l l ll ll ll ll ll ll ll ll ll
governance: (1) an effective and engaged board of directors, (2) shareholder activism, and (3)
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proper managerial rewards and incentives.
ll ll ll ll ll
Difficulty: 2 Medium ll ll
Topic: Corporate Governance
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Learning Objective: 01-03 The strategic role of corporate governance and stakeholder
ll l l ll ll ll ll ll ll ll ll
management, as well as how "symbiosis" can be achieved among an organization's stakeholders.
ll ll ll ll ll ll ll ll ll ll ll ll ll
Bloom's: Understand
ll l l
AACSB: Analytical Thinking l l ll
Accessibility: Keyboard Navigation
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12) Social responsibility is the idea that organizations are only accountable to stockholders.
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Answer: FALSE l l
Explanation: Social responsibility is the expectation that businesses or individuals will strive to
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improve the overall welfare of society. From the perspective of a business, this means that
ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll
managers must take active steps to make society better by virtue of the business being in existence.
ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll
Difficulty: 2 Medium ll ll
Topic: Corporate Social Responsibility and Sustainability
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Learning Objective: 01-04 The importance of social responsibility, including environmental
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sustainability, and how it can enhance a corporation's innovation strategy.
ll ll ll ll ll ll ll ll ll ll
Bloom's: Analyze l l
AACSB: Analytical Thinking l l ll
Accessibility: Keyboard Navigation
ll l l l
ll ll ll ll ll ll
Chapter 1 Strategic Management: Creating Competitive Advantages
ll l l ll ll ll ll
1) Lands' End's failure under the leadership of Ms. Frederica Marchionni was said to be a direct
ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll
result of the quality of her leadership. According to the text, this would be an example of the
ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll
"romantic" perspective of leadership.
ll ll ll ll
Answer: TRUE l l
Explanation: In the romantic view of leadership, the implicit assumption is that the leader is the
l l ll ll ll ll ll ll ll ll ll ll ll ll ll ll
key force in determining an organization's success or lack thereof. Under Ms. Marchionni's
ll ll ll ll ll ll ll ll ll ll ll ll ll
leadership, the company reported a 19.5-million-dollar loss for 2016 after having reported a
ll ll ll ll ll ll ll ll ll ll ll ll ll
73.8-million-dollar profit for the previous year under its previous CEO.
ll ll ll ll ll ll ll ll ll ll
Difficulty: 2 Medium ll ll
Topic: Strategy and the Strategic Management Process
l l ll ll ll ll ll
Learning Objective: 01-01 The definition of strategic management and its four key attributes.
ll l l ll ll ll ll ll ll ll ll ll ll
Bloom's: Understand
ll l l
AACSB: Analytical Thinking l l ll
Accessibility: Keyboard Navigation
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2) Strategic management consists of the analyses, decisions, and actions an organization
ll ll ll ll ll ll ll ll ll ll
undertakes in order to create and sustain competitive advantages.
ll ll ll ll ll ll ll ll ll
Answer: TRUE l l
Explanation: According to the textbook, this is the definition of strategic management.
l l ll ll ll ll ll ll ll ll ll ll
Difficulty: 1 Easy
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Topic: Strategy and the Strategic Management Process
l l ll ll ll ll ll
Learning Objective: 01-01 The definition of strategic management and its four key attributes.
ll l l ll ll ll ll ll ll ll ll ll ll
Bloom's: Remember
ll l l
AACSB: Knowledge Application l l ll
Accessibility: Keyboard Navigation
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3) Management innovations such as total quality, just-in-time, benchmarking, business process
ll ll ll ll ll ll ll ll ll
reengineering, and outsourcing are important but not enough for building sustainable competitive
ll ll ll ll ll ll ll ll ll ll ll ll
advantage.
ll
Answer: TRUE l l
Explanation: Sustainable competitive advantage cannot be achieved through operational
l l ll ll ll ll ll ll ll
effectiveness alone. Popular management innovations of the last two decades like total quality,
ll ll ll ll ll ll ll ll ll ll ll ll ll
just-in-time, benchmarking, business process reengineering, and outsourcing are concerned with
ll ll ll ll ll ll ll ll ll ll
operational effectiveness.
ll ll
Difficulty: 2 Medium ll ll
Topic: Strategy and the Strategic Management Process
l l ll ll ll ll ll
Learning Objective: 01-01 The definition of strategic management and its four key attributes.
ll l l ll ll ll ll ll ll ll ll ll ll
Bloom's: Understand
ll l l
AACSB: Analytical Thinking l l ll
Accessibility: Keyboard Navigation
ll l l l
4) Trade-off decisions between effectiveness and efficiency are important in the practice of
ll ll ll ll ll ll ll ll ll ll ll
,strategic management. ll
Answer: TRUE l l
Explanation: The fourth attribute of strategic management is that it involves the recognition of
l l ll ll ll ll ll ll ll ll ll ll ll ll
trade-offs between effectiveness and efficiency. Some authors have referred to this as the
ll ll ll ll ll ll ll ll ll ll ll ll ll
difference between doing the right thing (effectiveness) and doing things right (efficiency).
ll ll ll ll ll ll ll ll ll ll ll ll
Difficulty: 2 Medium ll ll
Topic: Strategy and the Strategic Management Process
l l ll ll ll ll ll
Learning Objective: 01-01 The definition of strategic management and its four key attributes.
ll l l ll ll ll ll ll ll ll ll ll ll
Bloom's: Understand
ll l l
AACSB: Analytical Thinking l l ll
Accessibility: Keyboard Navigation
ll l l l
5) According to Henry Mintzberg, a management scholar, most firms do not realize their original
ll ll ll ll ll ll ll ll ll ll ll ll ll
intended strategy.
ll ll
Answer: TRUE l l
Explanation: Henry Mintzberg states that the intended strategy rarely survives in its original
l l ll ll ll ll ll ll ll ll ll ll ll
form. Unforeseen environmental developments, unanticipated resource constraints, or changes in
ll ll ll ll ll ll ll ll ll ll
managerial preferences may result in at least some parts of the intended strategy remaining
ll ll ll ll ll ll ll ll ll ll ll ll ll ll
unrealized. On the other hand, good managers will want to take advantage of a new opportunity
ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll
presented by the environment, even if it was not part of the original set of intentions.
ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll
Difficulty: 2 Medium ll ll
Topic: Strategy and the Strategic Management Process
l l ll ll ll ll ll
Learning Objective: 01-02 The strategic management process and its three interrelated and
ll l l ll ll ll ll ll ll ll ll ll
principal activities.
ll ll
Bloom's: Understand l l
AACSB: Analytical
ll l l
Thinking
l
Accessibility: Keyboard Navigation l l ll
6) The final realized strategy of a firm is a combination of deliberate and time-tested strategies
ll ll ll ll ll ll ll ll ll ll ll ll ll ll
only.
ll
Answer: FALSE l l
Explanation: Realized strategy is that strategy of a firm in which organizational decisions are
l l ll ll ll ll ll ll ll ll ll ll ll ll
determined by both analysis and unforeseen environmental developments, unanticipated resource
ll ll ll ll ll ll ll ll ll ll
constraints, and/or changes in managerial preferences.
ll ll ll ll ll ll
Difficulty: 2 Medium ll ll
Topic: Strategy and the Strategic Management Process
l l ll ll ll ll ll
Learning Objective: 01-02 The strategic management process and its three interrelated and
ll l l ll ll ll ll ll ll ll ll ll
principal activities.
ll ll
Bloom's: Understand l l
AACSB: Knowledge Application l l ll
Accessibility: Keyboard Navigation
ll l l l
,7) Strategy analysis is the study of only the big picture external environments of the firm.
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Answer: FALSE l l
Explanation: Strategy analysis is the study of the external and internal environments of a firm,
l l ll ll ll ll ll ll ll ll ll ll ll ll ll
and their fit with organizational vision and goals.
ll ll ll ll ll ll ll ll
Difficulty: 2 Medium ll ll
Topic: Strategy and the Strategic Management Process
l l ll ll ll ll ll
Learning Objective: 01-02 The strategic management process and its three interrelated and
ll l l ll ll ll ll ll ll ll ll ll
principal activities.
ll ll
Bloom's: Understand l l
AACSB: Knowledge Application l l ll
Accessibility: Keyboard Navigation
ll l l l
8) All successful firms compete and outperform their rivals by developing bases for competitive
ll ll ll ll ll ll ll ll ll ll ll ll
advantage, which can be achieved only through cost leadership.
ll ll ll ll ll ll ll ll ll
Answer: FALSE l l
Explanation: Successful firms strive to develop bases for competitive advantage, which can be
l l ll ll ll ll ll ll ll ll ll ll ll
achieved through cost leadership and/or differentiation as well as by focusing on a narrow or
ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll
industrywide market segment.
ll ll ll
Difficulty: 2 Medium ll ll
Topic: Strategy and the Strategic Management Process
l l ll ll ll ll ll
Learning Objective: 01-02 The strategic management process and its three interrelated and
ll l l ll ll ll ll ll ll ll ll ll
principal activities.
ll ll
Bloom's: Understand l l
AACSB: Analytical
ll l l
Thinking
l
Accessibility: Keyboard Navigation l l ll
9) The three primary participants in corporate governance are: (1) the shareholders, (2) the
ll ll ll ll ll ll ll ll ll ll ll ll
management (led by the chief executive officer), and (3) the employees.
ll ll ll ll ll ll ll ll ll ll ll
Answer: FALSE l l
Explanation: The primary participants are: (1) the shareholders, (2) the management (led by the
l l ll ll ll ll ll ll ll ll ll ll ll ll
chief executive officer), and (3) the board of directors.
ll ll ll ll ll ll ll ll ll
Difficulty: 2 Medium ll ll
Topic: Corporate Governance
l l ll
Learning Objective: 01-03 The strategic role of corporate governance and stakeholder
ll l l ll ll ll ll ll ll ll ll
management, as well as how "symbiosis" can be achieved among an organization's stakeholders.
ll ll ll ll ll ll ll ll ll ll ll ll ll
Bloom's: Understand
ll l l
AACSB: Knowledge Application l l ll
Accessibility: Keyboard Navigation
ll l l l
, 10) Decisions by boards of directors are always consistent with shareholder interests.
ll ll ll ll ll ll ll ll ll ll
Answer: FALSE l l
Explanation: The board of directors (BOD) are the elected representatives of the shareholders,
l l ll ll ll ll ll ll ll ll ll ll ll
charged with ensuring that the interests and motives of management are aligned with those of the
ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll
owners (i.e., shareholders). Recent scandals have resulted in criticism and cynicism that the BOD
ll ll ll ll ll ll ll ll ll ll ll ll ll ll
fulfills this charge.
ll ll ll
Difficulty: 2 Medium ll ll
Topic: Corporate Governance
l l ll
Learning Objective: 01-03 The strategic role of corporate governance and stakeholder
ll l l ll ll ll ll ll ll ll ll
management, as well as how "symbiosis" can be achieved among an organization's stakeholders.
ll ll ll ll ll ll ll ll ll ll ll ll ll
Bloom's: Understand
ll l l
AACSB: Analytical Thinking l l ll
Accessibility: Keyboard Navigation
ll l l l
11) Ensuring effective corporate governance requires an effective and engaged board of
ll ll ll ll ll ll ll ll ll ll
directors, uninvolved shareholders, and proper managerial rewards and incentives.
ll ll ll ll ll ll ll ll ll
Answer: FALSE l l
Explanation: We focus on three important mechanisms to ensure effective corporate
l l ll ll ll ll ll ll ll ll ll
governance: (1) an effective and engaged board of directors, (2) shareholder activism, and (3)
ll ll ll ll ll ll ll ll ll ll ll ll ll ll
proper managerial rewards and incentives.
ll ll ll ll ll
Difficulty: 2 Medium ll ll
Topic: Corporate Governance
l l ll
Learning Objective: 01-03 The strategic role of corporate governance and stakeholder
ll l l ll ll ll ll ll ll ll ll
management, as well as how "symbiosis" can be achieved among an organization's stakeholders.
ll ll ll ll ll ll ll ll ll ll ll ll ll
Bloom's: Understand
ll l l
AACSB: Analytical Thinking l l ll
Accessibility: Keyboard Navigation
ll l l l
12) Social responsibility is the idea that organizations are only accountable to stockholders.
ll ll ll ll ll ll ll ll ll ll ll
Answer: FALSE l l
Explanation: Social responsibility is the expectation that businesses or individuals will strive to
l l ll ll ll ll ll ll ll ll ll ll ll
improve the overall welfare of society. From the perspective of a business, this means that
ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll
managers must take active steps to make society better by virtue of the business being in existence.
ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll
Difficulty: 2 Medium ll ll
Topic: Corporate Social Responsibility and Sustainability
l l ll ll ll ll
Learning Objective: 01-04 The importance of social responsibility, including environmental
ll l l ll ll ll ll ll ll ll
sustainability, and how it can enhance a corporation's innovation strategy.
ll ll ll ll ll ll ll ll ll ll
Bloom's: Analyze l l
AACSB: Analytical Thinking l l ll
Accessibility: Keyboard Navigation
ll l l l
