Contemporary Strategy Analysis 10e
TEST BANK: CHAPTER 1
The Concept of Strategy
True or False Questions
1. Strategy is a unifying theme that gives coherence and direction to the actions and decisions of an
organization.
[See p.4]
a. T*
b. F
2. The successful careers of both Queen Elizabeth II and Lady Gaga may be attributed to their
commitment to systematic strategic planning
[See p.5]
a. T
b. F*
3. A key component of an effective strategy is clear, consistent, long-term goals.
[See pp.5-6]
*a. T
b. F
4. If a firm can devise a brilliant strategy, it will be successful irrespective of how effectively it is
implemented.
[See p.5]
a. T
*b. F
5. A major problem of using SWOT analyses in distinguishing strengths from weaknesses and
opportunities from threats.
[See p.10]
*a. T
b. F
6. “Strategic fit” refers to the consistency between a firm’s strategy and, on one hand, its external
environment and, on the other, its internal resources and capabilities.
[See p.10]
*a. T
b. F
7. Contingency theory postulates that a firm’s strategy must to flexible in order to meet any possible
contingency.
[See pp.10-11]
a. T
*b. F
8. Strategy denotes an overall plan whereas a tactic is a scheme for a specific action.
[See p.11]
*a. T
b. F
9. The principles of military strategy are rarely applicable to business situations.
[See pp.11-12]
© 2019 John Wiley & Sons, Inc. 1
, a. T
*b. F
10. Strategic decisions are important, involve a significant commitment of resources, and should be easily
reversible.
[See p.11]
a. T
*b. F
11. Game theory is a useful for studying competitive behavior in politics, military campaigns and
international relations, but it cannot be used to analyze business strategies.
[See p.12]
a. T
*b. F
12. The main factor causing the transition from corporate planning to strategic management was the
increasing inability of companies to forecast economic conditions four or five years into the future.
[See p.12]
*a. T
b. F
13. Strategy is a detailed plan that programs the actions of an organization or an individual.
[See pp.14-15]
a. T
*b. F
14. Strategic choices involve two basic questions: where and how to compete?
[See p.18]
*a. T
b. F
15. In the large, complex firm, two main levels of strategy can be distinguished: corporate strategy and
business (or competitive) strategy.
[See pp.18-19]
*a. T
b. F
16. When describing the strategy of a firm, it is best to ignore the current positioning of the firm in order to
concentrate upon the direction in which the firm will develop in the future.
[See pp.19-20]
a. T
*b. F
17. The reason that a firm’s realized strategy diverges from its intended strategy is because strategy
making is, to a great extent, an emergent process.
[See pp.20-21]
*a. T
b. F
18. According to Henry Mintzberg, firm strategy should be formulated by top management through rational
deliberation utilizing all available data.
[See p.21]
a. T
*b. F
19. The dynamic, future-oriented dimension of a firm’s strategy is described by its
mission and vision statements and its performance targets.
© 2019 John Wiley & Sons, Inc. 2
TEST BANK: CHAPTER 1
The Concept of Strategy
True or False Questions
1. Strategy is a unifying theme that gives coherence and direction to the actions and decisions of an
organization.
[See p.4]
a. T*
b. F
2. The successful careers of both Queen Elizabeth II and Lady Gaga may be attributed to their
commitment to systematic strategic planning
[See p.5]
a. T
b. F*
3. A key component of an effective strategy is clear, consistent, long-term goals.
[See pp.5-6]
*a. T
b. F
4. If a firm can devise a brilliant strategy, it will be successful irrespective of how effectively it is
implemented.
[See p.5]
a. T
*b. F
5. A major problem of using SWOT analyses in distinguishing strengths from weaknesses and
opportunities from threats.
[See p.10]
*a. T
b. F
6. “Strategic fit” refers to the consistency between a firm’s strategy and, on one hand, its external
environment and, on the other, its internal resources and capabilities.
[See p.10]
*a. T
b. F
7. Contingency theory postulates that a firm’s strategy must to flexible in order to meet any possible
contingency.
[See pp.10-11]
a. T
*b. F
8. Strategy denotes an overall plan whereas a tactic is a scheme for a specific action.
[See p.11]
*a. T
b. F
9. The principles of military strategy are rarely applicable to business situations.
[See pp.11-12]
© 2019 John Wiley & Sons, Inc. 1
, a. T
*b. F
10. Strategic decisions are important, involve a significant commitment of resources, and should be easily
reversible.
[See p.11]
a. T
*b. F
11. Game theory is a useful for studying competitive behavior in politics, military campaigns and
international relations, but it cannot be used to analyze business strategies.
[See p.12]
a. T
*b. F
12. The main factor causing the transition from corporate planning to strategic management was the
increasing inability of companies to forecast economic conditions four or five years into the future.
[See p.12]
*a. T
b. F
13. Strategy is a detailed plan that programs the actions of an organization or an individual.
[See pp.14-15]
a. T
*b. F
14. Strategic choices involve two basic questions: where and how to compete?
[See p.18]
*a. T
b. F
15. In the large, complex firm, two main levels of strategy can be distinguished: corporate strategy and
business (or competitive) strategy.
[See pp.18-19]
*a. T
b. F
16. When describing the strategy of a firm, it is best to ignore the current positioning of the firm in order to
concentrate upon the direction in which the firm will develop in the future.
[See pp.19-20]
a. T
*b. F
17. The reason that a firm’s realized strategy diverges from its intended strategy is because strategy
making is, to a great extent, an emergent process.
[See pp.20-21]
*a. T
b. F
18. According to Henry Mintzberg, firm strategy should be formulated by top management through rational
deliberation utilizing all available data.
[See p.21]
a. T
*b. F
19. The dynamic, future-oriented dimension of a firm’s strategy is described by its
mission and vision statements and its performance targets.
© 2019 John Wiley & Sons, Inc. 2
