Strategic Management: Text and Cases, 9e (Dess) i.d i.d i.d i.d i.d i.d
Chapter 1 Strategic Management: Creating Competitive Advantages
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1) Lands'End's failureunder the leadership of Ms. FredericaMarchionni was said to be a direct result
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of the quality of her leadership. According to the text, this would be an example of the "romantic"
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perspective of leadership.
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Answer: TRUE i . d
Explanation: Inthe romantic view of leadership, the implicit assumption is that the leader isthe key i . d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d
force in determining an organization's success or lack thereof. Under Ms. Marchionni's leadership,
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the company reported a 19.5-million-dollar loss for 2016 after having reported a 73.8-million-dollar
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profit for the previous year under its previous CEO.
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Difficulty: 2 Medium i.d i.d
Topic: Strategy and the Strategic Management Process
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LearningObjective: 01-01The definitionof strategic management and its four key attributes. Bloom's:
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iUnderstand
. d
AACSB: Analytical Thinking i . d i.d
Accessibility: KeyboardNavigation
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2) Strategic management consists of theanalyses, decisions, andactions an organization i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d
undertakes in order to create and sustain competitive advantages.
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Answer: TRUE i . d
Explanation: Accordingto thetextbook, this isthe definitionof strategic management. Difficulty: 1 i . d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d
Easy
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Topic: Strategy and the Strategic Management Process
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LearningObjective: 01-01The definitionof strategic management and its four key attributes. Bloom's:
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iRemember
. d
AACSB: Knowledge Application i . d i.d
Accessibility: KeyboardNavigation
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3) Management innovations such as total quality, just-in-time, benchmarking, business process i.d i.d i.d i.d i.d i.d i.d i.d i.d
reengineering, and outsourcing areimportant butnot enough for buildingsustainable competitive
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advantage.
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Answer: TRUE i . d
Explanation: Sustainable competitive advantage cannot be achieved through operational i . d i.d i.d i.d i.d i.d i.d i.d
effectiveness alone. Popular management innovations of the last two decades like total quality, just-
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in-time,benchmarking, businessprocessreengineering,andoutsourcing areconcernedwith
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operational effectiveness.
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Difficulty: 2 Medium i.d i.d
Topic: Strategy and the Strategic Management Process
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LearningObjective: 01-01The definitionof strategic management and its four key attributes. Bloom's:
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i Understand
. d
AACSB: Analytical Thinking i . d i.d
Accessibility: KeyboardNavigation
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4) Trade-offdecisions betweeneffectiveness and efficiency are importantin the practiceof i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d
,strategicmanagement. i.d
Answer: TRUE i . d
Explanation: The fourth attributeof strategic management isthat it involves the recognition of i . d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d
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).
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Difficulty: 2 Medium i.d i.d
Topic: Strategy and the Strategic Management Process
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LearningObjective: 01-01The definitionof strategic management and its four key attributes. Bloom's:
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i Understand
. d
AACSB: Analytical Thinking i . d i.d
Accessibility: KeyboardNavigation
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5) According to Henry Mintzberg, a management scholar, most firmsdo not realize their original i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d
intended strategy.
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Answer: TRUE i . d
Explanation: Henry Mintzberg states that the intended strategy rarely survives in its original form. i . d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d
Unforeseenenvironmentaldevelopments, unanticipatedresource constraints,orchangesin
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managerial preferences may result in at least some parts of the intended strategy remaining
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unrealized. On the other hand, good managers will want to take advantage of a new opportunity
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presented by the environment, even if it was not part of the original set of intentions.
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Difficulty: 2 Medium i.d i.d
Topic: Strategy and the Strategic Management Process
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LearningObjective: 01-02The strategicmanagementprocess and its three interrelated and principal
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activities.
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Bloom's: Understand i . d
AACSB: AnalyticalThinking
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Accessibility: KeyboardNavigation i . d i.d
6) The final realized strategy of a firm isa combination of deliberate and time-tested strategies only.
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Answer: FALSE i . d
Explanation: Realized strategy is that strategy of a firm in which organizational decisions are i . d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d
determinedbybothanalysis andunforeseen environmental developments, unanticipatedresource
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constraints, and/or changes in managerial preferences.
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Difficulty: 2 Medium i.d i.d
Topic: Strategy and the Strategic Management Process
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LearningObjective: 01-02The strategicmanagementprocess and its three interrelated and principal
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activities.
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Bloom's: Understand i . d
AACSB: Knowledge Application i . d i.d
Accessibility: KeyboardNavigation
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,7) Strategy analysis isthe study of only the big picture external environments of the firm. i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d
Answer: FALSE i . d
Explanation: Strategy analysis is the study of the external and internal environments of a firm, and i . d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d
their fit with organizational vision and goals.
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Difficulty: 2 Medium i.d i.d
Topic: Strategy and the Strategic Management Process
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LearningObjective: 01-02The strategicmanagementprocess and its three interrelated and principal
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activities.
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Bloom's: Understand i . d
AACSB: Knowledge Application i . d i.d
Accessibility: KeyboardNavigation
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8) All successful firmscompete and outperformtheirrivals bydevelopingbases for competitive
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advantage, which can be achieved only through cost leadership.
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Answer: FALSE i . d
Explanation: Successful firms strive to develop bases for competitive advantage, which can be i . d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d
achieved through cost leadership and/or differentiation as well as by focusing on a narrow or
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industrywide market segment.
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Difficulty: 2 Medium i.d i.d
Topic: Strategy and the Strategic Management Process
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LearningObjective: 01-02The strategicmanagementprocess and its three interrelated and principal
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activities.
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Bloom's: Understand i . d
AACSB: AnalyticalThinking
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Accessibility: KeyboardNavigation i . d i.d
9) The threeprimaryparticipants in corporategovernanceare:(1) theshareholders, (2) the
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management (led by the chief executive officer), and (3) the employees.
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Answer: FALSE i . d
Explanation: The primary participants are: (1) the shareholders, (2) themanagement (led by the chief i . d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d
executive officer), and (3) the board of directors.
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Difficulty: 2 Medium i.d i.d
Topic: CorporateGovernance
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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 beachieved among an organization's stakeholders.
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Bloom's: Understand
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AACSB: Knowledge Application i . d i.d
Accessibility: KeyboardNavigation
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, 10) Decisionsby boardsof directors are always consistent with shareholder interests. i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d
Answer: FALSE i . d
Explanation: The board of directors (BOD) are the elected representatives of the shareholders, i . d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d
charged with ensuring that the interests and motives of management are aligned with those of the owners
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(i.e., shareholders). Recent scandals have resulted in criticism and cynicism that the BOD fulfills this
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charge.
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Difficulty: 2 Medium i.d i.d
Topic: CorporateGovernance i . d i.d
Learning Objective: 01-03 The strategic role of corporate governance and stakeholder
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management,as well as how "symbiosis" can beachieved among an organization's stakeholders.
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Bloom's: Understand
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AACSB: Analytical Thinking i . d i.d
Accessibility: KeyboardNavigation
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11) Ensuring effectivecorporategovernancerequires an effective and engagedboard of i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d
directors, uninvolved shareholders, and proper managerial rewards and incentives.
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Answer: FALSE i . d
Explanation: We focus on three important mechanisms to ensure effective corporate governance: i . d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d
(1) an effective and engaged board of directors, (2) shareholder activism, and (3) proper managerial
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rewards and incentives.
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Difficulty: 2 Medium i.d i.d
Topic: CorporateGovernance i . d i.d
Learning Objective: 01-03 The strategic role of corporate governance and stakeholder
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management,as well as how "symbiosis" can beachieved among an organization's stakeholders.
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Bloom's: Understand
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AACSB: Analytical Thinking i . d i.d
Accessibility: KeyboardNavigation
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12) Socialresponsibilityis the idea thatorganizations are only accountable to stockholders.
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Answer: FALSE i . d
Explanation: Social responsibility is the expectation that businesses or individuals will striveto i . d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d
improve the overall welfare of society. From the perspective of a business, this means that managers
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must take active steps to make society better by virtue of the business being in existence.
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Difficulty: 2 Medium i.d i.d
Topic: CorporateSocialResponsibility and Sustainability
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LearningObjective: 01-04The importance ofsocialresponsibility, includingenvironmental
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sustainability, and how it can enhance a corporation's innovation strategy.
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Bloom's: Analyze i . d
AACSB: Analytical Thinking i . d i.d
Accessibility: KeyboardNavigation
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Chapter 1 Strategic Management: Creating Competitive Advantages
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1) Lands'End's failureunder the leadership of Ms. FredericaMarchionni was said to be a direct result
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of the quality of her leadership. According to the text, this would be an example of the "romantic"
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perspective of leadership.
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Answer: TRUE i . d
Explanation: Inthe romantic view of leadership, the implicit assumption is that the leader isthe key i . d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d
force in determining an organization's success or lack thereof. Under Ms. Marchionni's leadership,
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the company reported a 19.5-million-dollar loss for 2016 after having reported a 73.8-million-dollar
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profit for the previous year under its previous CEO.
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Difficulty: 2 Medium i.d i.d
Topic: Strategy and the Strategic Management Process
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LearningObjective: 01-01The definitionof strategic management and its four key attributes. Bloom's:
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iUnderstand
. d
AACSB: Analytical Thinking i . d i.d
Accessibility: KeyboardNavigation
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2) Strategic management consists of theanalyses, decisions, andactions an organization i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d
undertakes in order to create and sustain competitive advantages.
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Answer: TRUE i . d
Explanation: Accordingto thetextbook, this isthe definitionof strategic management. Difficulty: 1 i . d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d
Easy
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Topic: Strategy and the Strategic Management Process
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LearningObjective: 01-01The definitionof strategic management and its four key attributes. Bloom's:
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iRemember
. d
AACSB: Knowledge Application i . d i.d
Accessibility: KeyboardNavigation
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3) Management innovations such as total quality, just-in-time, benchmarking, business process i.d i.d i.d i.d i.d i.d i.d i.d i.d
reengineering, and outsourcing areimportant butnot enough for buildingsustainable competitive
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advantage.
i.d
Answer: TRUE i . d
Explanation: Sustainable competitive advantage cannot be achieved through operational i . d i.d i.d i.d i.d i.d i.d i.d
effectiveness alone. Popular management innovations of the last two decades like total quality, just-
i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d
in-time,benchmarking, businessprocessreengineering,andoutsourcing areconcernedwith
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operational effectiveness.
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Difficulty: 2 Medium i.d i.d
Topic: Strategy and the Strategic Management Process
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LearningObjective: 01-01The definitionof strategic management and its four key attributes. Bloom's:
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i Understand
. d
AACSB: Analytical Thinking i . d i.d
Accessibility: KeyboardNavigation
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4) Trade-offdecisions betweeneffectiveness and efficiency are importantin the practiceof i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d
,strategicmanagement. i.d
Answer: TRUE i . d
Explanation: The fourth attributeof strategic management isthat it involves the recognition of i . d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d
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).
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Difficulty: 2 Medium i.d i.d
Topic: Strategy and the Strategic Management Process
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LearningObjective: 01-01The definitionof strategic management and its four key attributes. Bloom's:
i.d i . d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d
i Understand
. d
AACSB: Analytical Thinking i . d i.d
Accessibility: KeyboardNavigation
i.d i . d i.d
5) According to Henry Mintzberg, a management scholar, most firmsdo not realize their original i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d
intended strategy.
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Answer: TRUE i . d
Explanation: Henry Mintzberg states that the intended strategy rarely survives in its original form. i . d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d
Unforeseenenvironmentaldevelopments, unanticipatedresource constraints,orchangesin
i.d i.d i.d i.d i.d i.d i.d i.d i.d
managerial preferences may result in at least some parts of the intended strategy remaining
i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d
unrealized. On the other hand, good managers will want to take advantage of a new opportunity
i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d
presented by the environment, even if it was not part of the original set of intentions.
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Difficulty: 2 Medium i.d i.d
Topic: Strategy and the Strategic Management Process
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LearningObjective: 01-02The strategicmanagementprocess and its three interrelated and principal
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activities.
i.d
Bloom's: Understand i . d
AACSB: AnalyticalThinking
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Accessibility: KeyboardNavigation i . d i.d
6) The final realized strategy of a firm isa combination of deliberate and time-tested strategies only.
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Answer: FALSE i . d
Explanation: Realized strategy is that strategy of a firm in which organizational decisions are i . d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d
determinedbybothanalysis andunforeseen environmental developments, unanticipatedresource
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constraints, and/or changes in managerial preferences.
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Difficulty: 2 Medium i.d i.d
Topic: Strategy and the Strategic Management Process
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LearningObjective: 01-02The strategicmanagementprocess and its three interrelated and principal
i.d i . d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d
activities.
i.d
Bloom's: Understand i . d
AACSB: Knowledge Application i . d i.d
Accessibility: KeyboardNavigation
i.d i . d i.d
,7) Strategy analysis isthe study of only the big picture external environments of the firm. i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d
Answer: FALSE i . d
Explanation: Strategy analysis is the study of the external and internal environments of a firm, and i . d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d
their fit with organizational vision and goals.
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Difficulty: 2 Medium i.d i.d
Topic: Strategy and the Strategic Management Process
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LearningObjective: 01-02The strategicmanagementprocess and its three interrelated and principal
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activities.
i.d
Bloom's: Understand i . d
AACSB: Knowledge Application i . d i.d
Accessibility: KeyboardNavigation
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8) All successful firmscompete and outperformtheirrivals bydevelopingbases for competitive
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advantage, which can be achieved only through cost leadership.
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Answer: FALSE i . d
Explanation: Successful firms strive to develop bases for competitive advantage, which can be i . d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d
achieved through cost leadership and/or differentiation as well as by focusing on a narrow or
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industrywide market segment.
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Difficulty: 2 Medium i.d i.d
Topic: Strategy and the Strategic Management Process
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LearningObjective: 01-02The strategicmanagementprocess and its three interrelated and principal
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activities.
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Bloom's: Understand i . d
AACSB: AnalyticalThinking
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Accessibility: KeyboardNavigation i . d i.d
9) The threeprimaryparticipants in corporategovernanceare:(1) theshareholders, (2) the
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management (led by the chief executive officer), and (3) the employees.
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Answer: FALSE i . d
Explanation: The primary participants are: (1) the shareholders, (2) themanagement (led by the chief i . d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d
executive officer), and (3) the board of directors.
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Difficulty: 2 Medium i.d i.d
Topic: CorporateGovernance
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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 beachieved among an organization's stakeholders.
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Bloom's: Understand
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AACSB: Knowledge Application i . d i.d
Accessibility: KeyboardNavigation
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, 10) Decisionsby boardsof directors are always consistent with shareholder interests. i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d
Answer: FALSE i . d
Explanation: The board of directors (BOD) are the elected representatives of the shareholders, i . d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d
charged with ensuring that the interests and motives of management are aligned with those of the owners
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(i.e., shareholders). Recent scandals have resulted in criticism and cynicism that the BOD fulfills this
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charge.
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Difficulty: 2 Medium i.d i.d
Topic: CorporateGovernance i . d i.d
Learning Objective: 01-03 The strategic role of corporate governance and stakeholder
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management,as well as how "symbiosis" can beachieved among an organization's stakeholders.
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Bloom's: Understand
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AACSB: Analytical Thinking i . d i.d
Accessibility: KeyboardNavigation
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11) Ensuring effectivecorporategovernancerequires an effective and engagedboard of i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d
directors, uninvolved shareholders, and proper managerial rewards and incentives.
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Answer: FALSE i . d
Explanation: We focus on three important mechanisms to ensure effective corporate governance: i . d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d
(1) an effective and engaged board of directors, (2) shareholder activism, and (3) proper managerial
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rewards and incentives.
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Difficulty: 2 Medium i.d i.d
Topic: CorporateGovernance i . d i.d
Learning Objective: 01-03 The strategic role of corporate governance and stakeholder
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management,as well as how "symbiosis" can beachieved among an organization's stakeholders.
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Bloom's: Understand
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AACSB: Analytical Thinking i . d i.d
Accessibility: KeyboardNavigation
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12) Socialresponsibilityis the idea thatorganizations are only accountable to stockholders.
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Answer: FALSE i . d
Explanation: Social responsibility is the expectation that businesses or individuals will striveto i . d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d i.d
improve the overall welfare of society. From the perspective of a business, this means that managers
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must take active steps to make society better by virtue of the business being in existence.
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Difficulty: 2 Medium i.d i.d
Topic: CorporateSocialResponsibility and Sustainability
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LearningObjective: 01-04The importance ofsocialresponsibility, includingenvironmental
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sustainability, and how it can enhance a corporation's innovation strategy.
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Bloom's: Analyze i . d
AACSB: Analytical Thinking i . d i.d
Accessibility: KeyboardNavigation
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