Crafting and executing strategy in strategic management

Crafting And Executive Strategy - The Managerial Process Of Crafting And Executing Strategy- Ch2

1
Which one of the following is not an integral part of the managerial process of crafting and executing strategy?
A)
Developing a strategic vision
B)
Developing a proven business model
C)
Setting objectives and crafting a strategy to achieve them
D)
Monitoring developments, evaluating performance, and initiating corrective adjustments in the company's long-term direction, objectives, strategy, or execution
E)
Implementing and executing the chosen strategy efficiently and effectively

Feedback:

2
A strategic vision for a company
A)
involves how fast to pursue the chosen strategy and reach the targeted levels of performance.
B)
consists of thinking through what it will take to make the chosen strategy work as planned.
C)
is a road map that delineates management's view of the company's future-"where we are going and why."
D)
spells out how the company is going to get from where it is now to where it want to go and when it is expected to arrive.
E)
concerns management's view of how to transition the company's business model from where it is now to where it needs to be.

Feedback:

3 CORRECT
Which of the following is not an important consideration in deciding to commit to one directional path versus another?
A)
Are changes presently under way in the market and competitive landscape acting to enhance or weaken the company's business outlook?
B)
Where should we head in order to prove that our business model is viable and that our strategy is working?
C)
Will the company's present business generate sufficient growth and profitability in the years ahead to please shareholders?
D)
What, if any, new geographic markets and/or customer groups should the company get in position to serve?
E)
What are our ambitions for the company-what industry standing do we want the company to have?

Feedback:

4
The difference between a company's mission statement and the concept of a strategic vision is that
A)
the mission statement lays out the desire to make a profit, whereas the strategic vision addresses what strategy the company will employ in trying to make a profit.
B)
a mission statement deals with "where we are headed " whereas a strategic vision provides the critical answer to "how will we get there?"
C)
a mission deals with what a company is trying to do and a vision concerns what a company ought to do.
D)
a mission statement typically identifies what the company's products or services are (what we do) and the customers and markets it serves (why we are here), whereas the focus of a strategic vision is on "where we are going and why."
E)
a mission is about what to accomplish for shareholders whereas a strategic vision concerns what to accomplish for customers.

Feedback:

5
Which one of the following is not a characteristic of an effectively-worded strategic vision statement?
A)
Directional (says something about the company's journey and destination and the kinds of business and strategic changes that will be forthcoming)
B)
Inspirational (is worded in a motivational and stirring way that will garner enthusiastic and energetic support from company personnel and shareholders)
C)
Graphic (paints a clear picture)
D)
Easy to communicate (ideally, explainable in 10 minutes)
E)
Focused and flexible (has specifics but stops short of a once-and-for-all-time pronouncement because the strategic path may need to be changed as events unfold)

Feedback:

6
Which of the following is a common shortcoming of company vision statements?
A)
Incomplete or vague-short on specifics
B)
Too reliant on superlatives (best, most successful, recognized leader, global or worldwide leader, first choice of buyers)
C)
So broad that it really doesn't rule out pursuing most any opportunity management spots
D)
Not distinctive-could apply to most any company (or at least several others in the same industry)
E)
All of the above are common shortcomings

Feedback:

7
A company's values can relate to
A)
how it will treat employees and customers and the importance the company places of teamwork.
B)
expectations that company personnel will exhibit integrity and fairness in conducting the company's business.
C)
the emphasis the company will place on innovativeness or quality or customer service.
D)
the company's beliefs in high ethical standards, socially responsible behavior, and giving back to the community.
E)
All of the above.

Feedback:

8
When there's an order of magnitude change in a company's environment that dramatically alters its prospects and mandates radical revision of its strategic course, the company is said to have encountered
A)
a strategic inflection point.
B)
a directional crossroads.
C)
a new strategic intent opportunity.
D)
a strategic roadblock that requires a new strategic vision and business model.
E)
a quantum conflict between its strategy and its strategic vision (that usually requires changing both the vision and the strategy).

Feedback:

9 CORRECT
A company's objectives or performance targets
A)
represent a managerial commitment to achieving quantifiable or measurable outcomes and results by a certain time and are needed for each all areas of the business that managers deem important to organizational success.
B)
are typically established after a company decides on a strategic vision and strategy so that they will entail performance targets that truly signal business success.
C)
are best stated in general terms (maximize profits, reduce costs, increase sales) rather than quantifiable terms (increase after-tax profits by 10% in 2 years, grow sales revenues by 20% annually) so that managers will have the latitude to adjust target outcomes to levels that can be achieved.
D)
should place far more emphasis on financial performance targets than strategic performance targets.
E)
All of these.

Feedback:

10
Which of the following represents the best example of a strategic objective (as opposed to a financial objective)?
A)
Achieve revenue growth of 10% annually
B)
Increase market share from 17% to 22% within 3 years and achieve the lowest overall costs of any producer in the industry
C)
Boost earnings per share by 15% annually by offering customers the widest selection of products in the industry
D)
Achieve a AA bond rating within 2 years and an annual cash flow of $500 million
E)
Increase the company's return on invested capital from 13.5% to 15.0% within 2 years by paying more attention to reducing costs

Feedback:

11
Establishing and achieving strategic objectives merits very high priority on management's agenda because
A)
trading off better financial performance for building a stronger competitive position provides better benefits to shareholders in both the short-run and the long-run.
B)
a company can't have a shrewd strategic vision without having aggressive and competitively astute strategic objectives.
C)
the surest path to sustained future profitability is successfully pursuing actions that strengthen a company's competitiveness and market position.
D)
well-chosen strategic objectives are essential to a well-crafted strategy
E)
a company cannot achieve its strategic intent and strategic vision or gain a competitive advantage over rivals without having and achieving strategic objectives.

Feedback:

12 CORRECT
Which of the following statements about objectives is false?
A)
A company's managers are well-advised to give the achievement of financial objectives a much higher priority than the achievement of strategic objectives.
B)
Companywide objectives need to be broken down into performance targets for each separate business, product line, functional department, and individual work unit because company performance can't reach full potential without each area of the organization doing its part and contributing directly to the desired companywide outcomes and results.
C)
A "balanced scorecard" for measuring company performance views financial performance measures as lagging indicators that reflect the results of past decisions and organizational activities and views strategic performance measures as leading indicators of a company's future financial performance.
D)
Objectives should be set at high enough levels to stretch an organization to reach its full potential.
E)
A company's objectives function as yardsticks for tracking an organization's performance and progress and should be quantifiable or measurable and contain a deadline for achievement.

Feedback:

13
A balanced scorecard for measuring company performance
A)
entails balancing the pursuit of good bottom-line profit against the pursuit of non-profit objectives (although achieving profitability targets is nearly always given greater emphasis).
B)
involves putting equal emphasis on the achievement of financial objectives, strategic objectives, and social responsibility objectives.
C)
entails setting both financial and strategic objectives and putting balanced emphasis on their achievement.
D)
helps prevent the pursuit of strategic objectives from dominating the pursuit of financial objectives.
E)
is necessary in order to prevent the drive for achieving financial objectives from weakening the attention paid to social responsibility, community citizenship, and other worthy goals.

Feedback:

14 CORRECT
A company exhibits strategic intent when
A)
it pursues its strategic vision.
B)
it relentlessly pursues an ambitious strategic objective and concentrates its full resources and competitive actions on achieving that objective.
C)
it adopts a strategic plan and tries to execute it.
D)
it sets objectives and pursues their achievement.
E)
All of the above.

Feedback:

15
The task of crafting a strategy is
A)
the function and responsibility of a few high-level executives.
B)
more of a collaborative group effort that involves all managers and sometimes key employees striving to arrive at a consensus on what the overall best strategy should be.
C)
the function and responsibility of a company's strategic planning staff.
D)
a job for a company's whole management team-senior executives plus the managers of business units, operating divisions, functional departments, manufacturing plants, and sales districts (as per the strategy-making pyramid shown in Figure 2.2).
E)
first and foremost the function and responsibility of a company's board of directors.

Feedback:

16
A company's overall strategy
A)
is really a collection strategic initiatives and actions devised by managers and key employees up and down the whole organization.
B)
consists of its strategic vision, mission statement, financial and strategic objectives, and strategic initiatives undertaken from the top to the bottom of its strategy-making pyramid (see Figure 2.2).
C)
consists of corporate strategy, business-level strategies, functional strategies, and operating strategies when the company has diversified and operates a group of businesses.
D)
consists of its diversification strategy, line of business strategies, and operating strategies.
E)
Both A and C are correct.

Feedback:

17 CORRECT
Business strategy, as distinct from corporate strategy, is chiefly concerned with
A)
establishing business positions in different industries.
B)
forging a series of actions and approaches that hold promise for producing successful performance in one specific line of business.
C)
boosting the combined performance of the set of businesses a company may have diversified into.
D)
striving to capture cross-business synergies and turn them into competitive advantage.
E)
adapting a company's business model to changing market conditions.

Feedback:

18
Functional strategies
A)
describe the mission and strategic intent of each key functional piece of the business.
B)
concern what to do about resolving the specific strategic issues and operating problems a business confronts in each key part of its business-R&D, production, sales and marketing, finance, information technology, human resources, and so on.
C)
are normally crafted by the executive in charge of the overall business and approved by the company's board of directors.
D)
add relevant detail to the overall business strategy by setting forth the actions, approaches, and practices to be employed in managing a particular functional activity or business process or key department within a business.
E)
are concerned with what competitive capabilities to build in support of the overall company strategy and what to do to unify the firm's skills, competencies, and resource strengths across all the various key pieces of a company's business.

Feedback:

19
Operating strategies concern
A)
what a company's various operating departments plan to do to help execute the company's overall strategy.
B)
the strategic intent of each operating unit.
C)
the game plans for managing key operating units within a business (plants, sales districts, distribution centers) and for performing strategically significant operating tasks (maintenance, shipping, inventory control, purchasing, advertising) so as to support functional strategies and the overall business strategy.
D)
the specific actions a company's various operating departments plan to take to unify efforts to achieve a sustainable competitive.
E)
All of these.

Feedback:

20
A company's strategic plan consists of
A)
its objectives and its strategy for achieving them.
B)
management's vision of where the company is headed, the established financial and strategic objectives, and management's strategy to achieve the objectives and move the company along the chosen strategic path.
C)
a company's strategic vision, strategic objectives, strategic intent, and strategy.
D)
an organization's strategy and management's specific, detailed plans for implementing it.
E)
the specific actions management intends to take in detouring strategic inflection points and achieving a sustainable competitive advantage.

21
The role of a company's board of directors in the strategy-making, strategy-executing process is to
A)
direct senior executives as to what the company's long-term direction, objectives, business model, and strategy should be and, further, closely supervise senior executives in their efforts to implement and execute the strategy.
B)
exercise strong oversight over the company's strategic direction and the major elements of its strategy.
C)
evaluate the caliber of senior executives' strategy-making and strategy-implementing skills.
D)
work closely with the CEO, senior executives, and the strategic planning staff to develop a strategic plan for the company; rubber stamp the proposals and recommendations of the CEO as to how to execute the business model and achieve the strategic intent; and ensuring that the strategy-making/strategy-executing process is carried out in a manner that benefits shareholders.
E)