Corporate Strategy Study Guide Questions
Course Introduction
Corporate Strategy explores the frameworks and analytical tools that organizations use to create and sustain competitive advantage at the enterprise level. The course examines how companies diversify their operations, manage portfolios of businesses, pursue growth through mergers and acquisitions, and respond to global market opportunities and threats. Students will learn how strategic decisions align with organizational goals, resources, and external environments, and will develop skills to analyze complex business problems, formulate coherent strategies, and assess the long-term implications of corporate actions through case studies and real-world examples.
Recommended Textbook
Strategic Management Text and Cases 6th Edition by Gregory Dess Available Study Resources on
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Chapter 1: Strategic Management Creating Competitive Advantages
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101 Verified Questions
101 Flashcards
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Sample Questions
Q1) A CEO made a lot of mistakes in assessing the market and the competitive conditions and improperly redesigning the organization into numerous business units. Such errors led to significantperformance declines. According to the text, this example illustrates the ________ perspective of leadership.
A) external control
B) romantic
C) internal mechanism
D) operational
Answer: B
Q2) In strategic management, both the short-term and long-term perspectives need to be considered because
A) shareholder value is only measured by short-term returns.
B) shareholders only care about long-term returns.
C) long-term vision precludes the analysis of present operating needs.
D) the creative tension between the two forces managers to develop more successful strategy.
Answer: D
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Chapter 2: Analyzing the External Environment of the Firm
Creating Competitive Advantages
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Sample Questions
Q1) ________ tracks the evolution of environmental trends, sequences of events, or streams of activities.
A) Environmental scanning
B) Environmental monitoring
C) Environmental surveying
D) Competitive intelligence
Answer: B
Q2) Companies that are able to spot key trends in the environment know their business and most importantly know their
A) suppliers.
B) employees.
C) customers.
D) competitors.
Answer: C
Q3) An automobile manufacturer acquires a rental car company. This is an example of A) backward integration.
B) forward integration.
C) economies of scale.
D) product differentiation.
Answer: B
Page 4
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Chapter 3: Assessing the Internal Environment of the Firm
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Sample Questions
Q1) A crash R&D program by one firm cannot replicate a successful technology developed by another firm, when research findings cumulate. This is an example of A) social complexity.
B) physical uniqueness.
C) path dependency.
D) causal ambiguity.
Answer: C
Q2) The root of the 3M innovation process is complex, hard to understand, and difficult to imitate.This is a competitive advantage based on A) path dependency.
B) social complexity.
C) casual ambiguity.
D) availability.
Answer: C
Q3) In value-chain analysis, value is measured by the market value of the total stock outstanding of the company.
A)True
B)False
Answer: False
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Chapter 4: Recognizing a Firm's Intellectual Assets Moving
beyond a Firm's Tangible Resources
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Sample Questions
Q1) If employees are committed to the core ________ and ________ of the organization, they are less likely to leave for the competition.
A) mission; outputs
B) values; structure
C) values; hierarchy
D) mission; values
Q2) Today, the loyalty of a knowledge worker to his or her employing firm has ________ compared to his or her loyalty to his or her profession and colleagues.
A) increased
B) remained the same
C) decreased
D) no correlation when
Q3) Software algorithms are a form of ________ that, once developed and paid for, can be reused many times at a very low cost.
A) tacit asset
B) intangible asset
C) knowledge asset
D) social asset
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Chapter 5: Business-Level Strategy Creating and Sustaining Competitive Advantages
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Sample Questions
Q1) Most turnarounds require a firm to carefully analyze its relevant environments. The ________ analysis leads to identification of market segments or customer groups that may still findtheproduct attractive.
A) external
B) internal
C) global
D) environmental
Q2) An overall low-cost position enables a firm to achieve ________ returns despite strong competition.
A) below average
B) average
C) no
D) above average
Q3) Which of the following is not a potential pitfall of a differentiation strategy?
A) Uniqueness that is not valuable.
B) The price premium is too high.
C) All rivals share a common input or raw material.
D) Perceptions of differentiation may vary between buyers and sellers.
Q4) What is a focus strategy? Provide an example where this has been implemented successfully.
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Chapter 6: Corporate-Level Strategy Creating Value through Diversification
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Sample Questions
Q1) ________ is an antitakeover tactic in which existing shareholders have the option to buy additional shares of stock at a discount to the current market price.
A) Greenmail
B) A golden parachute
C) A poison pill
D) Scorched earth
Q2) Benefits derived from horizontal and hierarchical relationships are mutually exclusive.
A)True
B)False
Q3) Vertical integration is more likely to be attractive when the end consumer market is A) volatile.
B) stable.
C) contracting.
D) fragmented.
Q4) Explain the purpose of antitakeover tactics and provide a specific example of an actual antitakeover tactic.
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Chapter 7: International Strategy Creating Value in Global Markets
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Sample Questions
Q1) A firm can establish a wholly owned subsidiary by
A) acquiring an existing company in the home country.
B) keeping all of the activity offshore.
C) licensing intellectual property.
D) entering into a franchising agreement.
Q2) Firms following a global strategy strive to offer ________ products and services as well as locate manufacturing, research and development, and marketing activities in a limited numberoflocations.
A) widely differentiated
B) more expensive local
C) internationally differentiated
D) standardized
Q3) According to the textbook, globalization involves international exchange. Included in this exchange is trade in goods and services as well as the exchange of ________, ________, and ________ across countries.
A) habits; values; ideas
B) traditions; legal systems; history
C) money; ideas; information
D) statistics; personnel; purchasing power
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Chapter 8: Entrepreneurial Strategy and Competitive Dynamics
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Sample Questions
Q1) Which of the following refers to a situation where a company has a high concentration of its business in a particular industry market?
A) competitor resources
B) resource similarity
C) market dependence
D) actor reputation
Q2) Competitors in a mature market typically find that a new entrant is threatening because
A) nearly all market need is already being met.
B) the new entrant might increase prices.
C) the new entrant offers the same product.
D) the new entrant is a pioneer.
Q3) What are competitive dynamics and how does this explain why strategies evolve in response to actions of close competitors?
Q4) Entrepreneurial new entry is often perceived as a competitive threat to incumbent firms because most market needs are being met, either directly or indirectly, by existing firms.
A)True
B)False
Chapter 9: Strategic Control and Corporate Governance
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Sample Questions
Q1) The traditional approach to strategic control relies on feedback from performance measurement to formulate strategy.
A)True
B)False
Q2) One of the most critical roles of the board of directors is to create incentives that align the interests of the CEO and top executives with the interests of shareholders.
A)True
B)False
Q3) In principal-principal conflicts (conflicts between controlling shareholders and minority shareholders), the ownership (of equity) is
A) widely dispersed.
B) controlled almost completely by management.
C) concentrated.
D) often held by employee stock ownership programs.
Q4) Informational controls involve the balance and alignment of the culture, rewards, and boundaries of a firm.
A)True
B)False
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Chapter 10: Creating Effective Organizational Designs
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Q1) The appropriateness of the type of organizational structure depends upon the ________ and ________ of growth.
A) nature; magnitude
B) definition; accessibility
C) accessibility; nature
D) nature; definition
Q2) A simple structure is characterized by
A) high specialization and low centralization.
B) low specialization and high centralization.
C) low formality and low creativity.
D) high formality and low centralization.
Q3) Managers trained in rigid hierarchies do not find it difficult to transition to participative style required for effective teamwork.
A)True
B)False
Q4) The most appropriate type of organizational structure to select is dependent upon the product or service the company provides.
A)True
B)False
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Chapter 11: Strategic Leadership Creating a Learning
Organization and an Ethical Organization
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Sample Questions
Q1) According to the former CEO of Hanover Insurance, learning organizations require that everyone feels and supports a compelling purpose. What is the most difficult aspect of creating this learning organization?
A) Communicating an image of the future that draws people in and speaks to them
B) Putting systems in place for training
C) Find the resources for the necessary educational training
D) Getting the shareholders to agree with the CEO
Q2) Leaders must draw on a range of personal skills as well as organizational mechanisms to move their organizations forward in the face of barriers to change.
A)True
B)False
Q3) People with strong self-awareness are overly critical and unrealistically optimistic and are well suited to run organizations because they will make good judgment calls. A)True
B)False
Q4) What are the five key elements of a learning organization and why are they important?
Q5) What is the difference between individual ethics and organizational ethics?
Page 13
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Chapter 12: Managing Innovation and Fostering Corporate
Entrepreneurship
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Sample Questions
Q1) Which of the following is not a dilemma faced by corporations trying to manage the innovation process?
A) launching incremental versus preemptive innovations
B) emphasizing marketing versus management innovations
C) choosing between experience and initiative
D) choosing between internal rather and external staffing
Q2) Creative intelligence involves the ability to see patterns in data, integrating data, and making insights. Which of the following are the four patterns of action managers should to developmore creative and higher potential innovations?
A) observing, experimenting, cataloging, and networking
B) questioning, observing, integrating, and networking
C) questioning, observing, experimenting, and networking
D) observing, experimenting, cataloging, and integrating
Q3) One of the important questions the corporation must address in assessing the effectiveness of its venturing initiatives is that of the sustainability of its basis of competitive advantage.
A)True
B)False
Q4) Explain why the seeds versus weeds dilemma is important.
Page 14
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