Business Strategy
Chapter Exam Questions
Course Introduction
Business Strategy is a comprehensive course that explores the principles and frameworks essential for formulating, implementing, and evaluating strategies that drive competitive advantage in various industries. Students will learn about internal and external analysis, strategic positioning, resource allocation, and the impact of global trends on business decisions. Through real-world case studies and interactive discussions, the course emphasizes critical thinking and decision-making skills, equipping students with the knowledge to develop, communicate, and execute effective strategies in dynamic business environments.
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Strategy 4th Edition by Bob de Wit
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2
Chapter 1: What is Strategy
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Q1) Strategic change,a necessary aspect of strategy,requires managers to:
A) Communicate with suppliers to ensure smooth relationships
B) Organize changes to achieve a successful strategic renewal process
C) Listen to the needs of customers
D) Control processes through monitoring and measurement initiatives
Answer: B
Q2) While seemingly a subject of interest mostly to top managers in large corporations,strategy is important to those even at the beginning of their career because:
A) Interviewers often pose questions that are strategic in nature
B) The odds are that they will be employed by a small business and have the opportunity to affect its strategy almost immediately
C) Employers nearly always send new recruits to strategic planning retreats shortly after the hiring process has concluded and they have begun work
D) Most university graduates will eventually find themselves in jobs entirely devoted to strategy and the planning process
Answer: B
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3
Chapter 2: Strategic Objectives
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Q1) It is not necessary for strategic objectives to be understood by all managers.
A)True
B)False
Answer: False
Q2) Factors that influence strategic direction include all of the following except:
A) Social trends
B) Economic influences
C) Competitors
D) All of the above
Answer: D
Q3) An organization's purpose must be translated into a set of primary objectives,called 'strategic objectives'.
A)True
B)False
Answer: True
Q4) Strategic decisions typically involve the commitment of significant resources and are not easily reversed.
A)True
B)False
Answer: True
Page 4
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Chapter 3: Governance,Ethics & Corporate Social Responsibility
in Strategy
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Q1) The CSR debate centres on the question:
A) Why does the firm exist?
B) What laws are needed to control the firm's behavior?
C) What can be done to prevent unreasonable profits?
D) All of the above.
Answer: D
Q2) Firms pursuing a reactive CSR strategy actively participate in policy discussions,build alliances with stakeholder groups,and voluntarily go beyond what the regulations require.
A)True
B)False
Answer: False
Q3) Organizational stakeholders are the firm's internal resources,capabilities,and core competencies that are used to accomplish what may at first appear to be unattainable goals in the competitive environment.
A)True
B)False
Answer: False
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Chapter 4: Culture and Strategy
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Q1) In all countries managers prefers to negotiate in teams not on a one-to-one basis.
A)True
B)False
Q2) Female managers can be found in all cultures.
A)True
B)False
Q3) An organization culture is constituted by a shared belief system that is emotionally charged as it encompasses the values and norms of its members and offers them an interpretive filter through which they make sense of what is around them.
A)True
B)False
Q4) The potential for culture change is unaffected by the strength and history of the existing culture.
A)True
B)False
Q5) What are the four most important manifestations of culture?
Q6) Identify the characteristics associated with organizations with multiple cultures.
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Page 6
Chapter 5: The Internal Environment
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Q1) Intangible resources and capabilities are assets that are more easily quantified.
A)True
B)False
Q2) If an organization possesses a valuable and unique resource,it is always a source of competitive advantage.
A)True
B)False
Q3) Value chain activities:
A) Are used to identify the industry profit pool that the firm should target
B) Show that there are multiple means that can be used to implement a business strategy
C) Focus on the links between primary activities, because these are the true source of competitive advantage for the firm
D) Can be used in not-for-profit organizations if the analysis focuses on support activities
Q4) Describe the four specific criteria that managers can use to decide which of their firm's capabilities have the potential to create a sustainable competitive advantage.
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Chapter 6: The External Environment
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Q1) Related and supporting industries are called _________ and they are an additional force that can impact the competitiveness of an industry.
A) Complementors
B) All-rounders
C) Customizers
D) Supporters
Q2) According to Michael Porter,conditions that create advantages for firms in certain countries and industries include:
A) Suppliers to a particular industry are the very best in the world
B) Strong industry competition
C) Buyers are among the most demanding in the world
D) All of the above
Q3) Describe and discuss the four activities of the external environmental analysis process.
Q4) If there are many buyers but only a few sellers,the buyers tend to have the most bargaining power.
A)True
B)False
Q5) Why is analysis of social trends important?
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Chapter 7: Business-Level Strategy
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Q1) IKEA offers young customers a selection of home furnishings featuring good design,function,and acceptable quality at low prices.IKEA is using which business level strategy?
A) Cost leadership
B) Focused cost leadership
C) Differentiation
D) Focused differentiation
Q2) Business-level strategy can be thought of as the firm's core strategy.
A)True
B)False
Q3) The biggest risk to a focus strategy is that the small market that is being targeted will simply disappear should the environment change.
A)True
B)False
Q4) What are the drivers of an effective differentiation strategy?
Q5) A competitive shakeout usually occurs at the beginning of the growth stage of the product life cycle.
A)True
B)False
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Chapter 8: Corporate-Level Strategy
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Q1) One of the factors on which a successful acquisition depends is the ability to capture synergies. Which of the following makes this a difficult task?
A) The acquirer tends to "overcommunicate" during the process
B) The synergies dissipate over the time that it takes to complete the deal
C) It is very hard to integrate the cultures of the companies involved
D) Synergies don't want to be captured; they wish to remain free
Q2) The use of e-commerce to allow firms to reduce the costs of processing transactions while improving their supply-chain management skills and tightening the control of their inventories is beginning to replace:
A) Outsourcing
B) Unrelated diversification
C) De-integration
D) Vertical integration
Q3) Performance continues to increase as diversification increases from single business to unrelated diversification.
A)True
B)False
Q4) Explain the major corporate-level strategy formulation responsibilities.
Q5) Explain the positions on the Boston Consulting Group's growth-share matrix.
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Chapter 9: International Strategy
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Q1) Legal challenges to counterfeiting generally are successful in emerging economies such as China and Russia.
A)True
B)False
Q2) A global strategy is an international strategy through which the firm offers standardized products across country markets,with competitive strategy being dictated by offices within the host markets served.
A)True
B)False
Q3) Industry regulation is increasing worldwide.
A)True
B)False
Q4) A transnational corporate-level strategy seeks to achieve:
A) Customization for the local market
B) Economies of scale and centralized strategic control
C) Global efficiency and local responsiveness
D) Standardization of products across countries
Q5) When does a global approach to an international product/market strategy make the most sense?
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Chapter 10: Competitive Rivalry & Competitive Dynamics
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Q1) "Competitive dynamics" indicates that firms and their strategic actions are independent.
A)True
B)False
Q2) Competitors are more likely to respond to competitive actions that are taken by:
A) Differentiators
B) Larger companies
C) First movers
D) Market leaders
Q3) Intensified rivalry within an industry results in decreased average profitability for the firms within it.
A)True
B)False
Q4) Large firms are likely to initiate more competitive actions along with more strategic actions during a given period.
A)True
B)False
Q5) Define competitive actions and responses and explain the two types of competitive actions and responses.
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Chapter 11: Strategic Leadership
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Q1) A heterogeneous top management team:
A) Is ineffective in most competitive settings
B) Can be prone to "group think"
C) Makes implementing a strategy easier
D) Is made up of managers with a wide variety of backgrounds, education, and experience.
Q2) Guiding an organization through the combination of dynamic challenges from the general environment,aggressive competitors,demanding customers,and other stakeholders is a process that is scientific and requires very little,if any,"art."
A)True
B)False
Q3) Good communication skills are not essential for strategic leaders as they can rely on others to implement organizational strategies.
A)True
B)False
Q4) Identify some of the core responsibilities of strategic leadership.
Q5) Difficulties regarding succession for those organizations that have been formed and run by visionary leaders have been identified,what are they?
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Chapter 12: Strategic Failure and Turnaround
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Q1) A change in strategy is needed to affect a turnaround when:
A) Profits have declined to a crisis stage.
B) Senior managers cannot agree on what to do.
C) Actions are no longer consistent with an espoused strategy.
D) Financial indicators are not looking good.
Q2) Recessions alone do not put organizations in decline,but they can:
A) Highlight existing weaknesses either created in, or hidden in, boom conditions.
B) Flag up aspects of management that enable growth.
C) Show how relationships with external stakeholders are maintained.
D) Create stronger links between marketing and finance.
Q3) Turnaround strategies are designed to:
A) Reposition the organization.
B) Bring quick results and contribute towards long term growth.
C) Enable management rotation.
D) Develop a feeling of unease among managers.
Q4) Turnaround strategies are likely to address those areas which must be developed if there is to be a sustained recovery.
A)True
B)False
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Chapter 13: Strategic Change
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Q1) Strategic renewal involves a number of strategic changes executed in a variety of areas.
A)True
B)False
Q2) The scope of change efforts relates to the depth of change in an organization.
A)True
B)False
Q3) Loosely coupled groups of autonomous firms that cooperate due to mutual interests are called:
A) Semiautonomous partnerships
B) Structural holes
C) Social networks
D) Business networks
Q4) As people become accustomed to fixed organizational routines and established habits:
A) Information is made available more quickly.
B) Customers become more satisfied
C) Their ability to learn and gradually adapt invariably recedes
D) Internal resources become more important
Q5) Identify typical sources of organizational rigidity that can inhibit change.
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Chapter 14: Strategic Implementation
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Q1) Opponents to implementation should be ignored.
A)True
B)False
Q2) What are the four problem areas associated with the successful implementation of strategies?
Q3) Managing issues during an implementation process is crucial and represents the rational and functional dimension; it involves:
A) Training
B) Phase concepts
C) Project teams
D) All of the above
Q4) Implementation is more than the linking stage between 'planning' and 'realization'; it encompasses the entire change process.
A)True
B)False
Q5) What is needed to increase the chances of successful strategy implementation?
Q6) Identify the characteristics of metrics that can be used effectively at the functional level of an organization.
Q7) What are the indirect aspects changed during implementation of strategies?
Page 16
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Chapter 15: Organizational Structure and Controls
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Q1) Common feedback control systems include all of the following except:
A) Strategic surveillance
B) Ratio analysis
C) Financial audits
D) Budgets
Q2) Structural inertia facilitates change in organizations.
A)True
B)False
Q3) Identify the primary features of the divisional structure.
Q4) The forces in a firm that work to maintain the status quo are called:
A) Strategic direction
B) Value impediments
C) Structural inertia
D) Social responsibility
Q5) A company in which decisions are centralized has empowered people in the lower rungs of the organization to make significant decisions.
A)True
B)False
Q6) What is a matrix structure and when should it be used?
Q7) Identify the key advantages and disadvantages of the functional structure.
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Chapter 16: Strategic Entrepreneurship
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Q1) There are striking differences in government regulations concerning start-ups.
A)True
B)False
Q2) Entrepreneurship is not the exclusive domain of small,young firms.
A)True
B)False
Q3) Personal traits of entrepreneurs are no different than non-entrepreneurs.
A)True
B)False
Q4) What are some of the features found in firms that have high levels of innovation and entrepreneurship?
Q5) Most scholars now agree that entrepreneurship is a result of both nature and nurture.
A)True
B)False
Q6) Innovation is at the heart of an entrepreneurial mindset and is important for success. However,what if a person does not tend to be creative? Should that person not consider forming an SME?
Q7) Identify the five paths an entrepreneurial start-up may take.
Q8) Identify four implications for action by the savvy entrepreneur?
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