[Test Bank] Strategic Management,, Text and Cases 9th Edition by Dess, McNamara, Eisner

Strategic Management: Text and Cases, 9e (Dess) Chapter 1 Strategic Management: Creating Competitive Advantages 1) Lands' End's failure under the leadership of Ms. Frederica Marchionni was said to be a direct result of the quality of her leadership. According to the text, this would be an example of the "romantic" perspective of leadership. Answer: TRUE Explanation: 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 Ms. Marchionni's leadership, the company reported a 19.5-million-dollar loss for 2016 after having reported a 73.8-million-dollar profit for the previous year under its previous CEO. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-01 The definition of strategic management and its four key attributes. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 2) Strategic management consists of the analyses, decisions, and actions an organization undertakes in order to create and sustain competitive advantages. Answer: TRUE Explanation: According to the textbook, this is the definition of strategic management. Difficulty: 1 Easy Topic: Strategy and the Strategic Management Process Learning Objective: 01-01 The definition of strategic management and its four key attributes. Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 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. Answer: TRUE Explanation: Sustainable competitive advantage cannot be achieved through operational effectiveness alone. Popular management innovations of the last two decades like total quality, just-in-time, benchmarking, business process reengineering, and outsourcing are concerned with operational effectiveness. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-01 The definition of strategic management and its four key attributes. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 4) Trade-off decisions between effectiveness and efficiency are important in the practice of Page 2 of 649 strategic management. Answer: TRUE Explanation: 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). Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-01 The definition of strategic management and its four key attributes. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 5) According to Henry Mintzberg, a management scholar, most firms do not realize their original intended strategy. Answer: TRUE Explanation: Henry Mintzberg states that the intended strategy rarely survives in its original form. Unforeseen environmental developments, unanticipated resource constraints, or changes in managerial preferences may result in at least some parts of the intended strategy remaining unrealized. On the other hand, good managers will want to take advantage of a new opportunity presented by the environment, even if it was not part of the original set of intentions. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-02 The strategic management process and its three interrelated and principal activities. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 6) The final realized strategy of a firm is a combination of deliberate and time-tested strategies only. Answer: FALSE Explanation: Realized strategy is that strategy of a firm in which organizational decisions are determined by both analysis and unforeseen environmental developments, unanticipated resource constraints, and/or changes in managerial preferences. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-02 The strategic management process and its three interrelated and principal activities. Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation Page 3 of 649 7) Strategy analysis is the study of only the big picture external environments of the firm. Answer: FALSE Explanation: Strategy analysis is the study of the external and internal environments of a firm, and their fit with organizational vision and goals. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-02 The strategic management process and its three interrelated and principal activities. Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation 8) All successful firms compete and outperform their rivals by developing bases for competitive advantage, which can be achieved only through cost leadership. Answer: FALSE Explanation: Successful firms strive to develop bases for competitive advantage, which can be achieved through cost leadership and/or differentiation as well as by focusing on a narrow or industrywide market segment. Difficulty: 2 Medium Topic: Strategy and the Strategic Management Process Learning Objective: 01-02 The strategic management process and its three interrelated and principal activities. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 9) The three primary participants in corporate governance are: (1) the shareholders, (2) the management (led by the chief executive officer), and (3) the employees. Answer: FALSE Explanation: The primary participants are: (1) the shareholders, (2) the management (led by the chief executive officer), and (3) the board of directors. Difficulty: 2 Medium Topic: Corporate Governance Learning Objective: 01-03 The strategic role of corporate governance and stakeholder management, as well as how "symbiosis" can be achieved among an organization's stakeholders. Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation Page 4 of 649 10) Decisions by boards of directors are always consistent with shareholder interests. Answer: FALSE Explanation: The board of directors (BOD) are the elected representatives of the shareholders, charged with ensuring that the interests and motives of management are aligned with those of the owners (i.e., shareholders). Recent scandals have resulted in criticism and cynicism that the BOD fulfills this charge. Difficulty: 2 Medium Topic: Corporate Governance Learning Objective: 01-03 The strategic role of corporate governance and stakeholder management, as well as how "symbiosis" can be achieved among an organization's stakeholders. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation