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