Course Introduction
Strategic Decision Making
Final Exam Questions
Strategic Decision Making explores the frameworks, tools, and concepts that managers use to make high-impact decisions for organizations in complex and uncertain environments. The course examines decision-making processes, analytical techniques, and behavioral factors that influence strategic choices, including risk assessment, game theory, group dynamics, and ethical considerations. Students learn to apply systematic approaches to evaluate alternatives, anticipate outcomes, and align decisions with organizational goals, preparing them to address real-world challenges in leadership, policy, and competitive strategy settings.
Recommended Textbook
Strategic Management Theory and Cases An Integrated Approach 12th Edition by Charles W. L.
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12 Chapters
895 Verified Questions
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Page 2
Chapter 1: Strategic Leadership: Managing the Strategy-Making Process for Competitive Advantage
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81 Verified Questions
81 Flashcards
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Sample Questions
Q1) Which of these principal factors helps increase shareholder value?
A) profitability.
B) risk factors.
C) low brand awareness.
D) government regulations.
E) high production costs.
Answer: A
Q2) Jeffrey Pfeffer believes that a manager's power comes from his or her:
A) ability to prioritize the well-being of the company over personal well-being.
B) ability to be emphatic and understanding of the feelings and emotions of subordinates.
C) control over important organizational resources.
D) ability to cut overhead costs.
E) personal rapport with the senior management.
Answer: C
Q3) Research finds that leaders who exhibit a high degree of emotional intelligence tend to be significantly less effective than those who do not.
A)True
B)False
Answer: False
Page 3
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Chapter 2: External Analysis: The Identification of Opportunities and Threats
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Sample Questions
Q1) Americans are currently living longer now than in the past because of advances in medicine. As a result, the sale of products that meet the needs of older individuals, such as devices that assist in walking and movement, have increased. In the context of an industry's macroenvironment, age is considered a:
A) technological force.
B) demographic force.
C) social force.
D) political force.
E) legal force.
Answer: B
Q2) When buyers are in a weak bargaining position, companies in the industry must lower their prices to increase profits.
A)True
B)False
Answer: False
Q3) Intense rivalry lowers prices and raises costs.
A)True
B)False
Answer: True
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Chapter 3: Internal Analysis: Resources and Competitive Advantage
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Sample Questions
Q1) When a company has differentiated products, they have less pricing options.
A)True
B)False
Answer: False
Q2) When Rollie's car wash began to lose business to rivals, Rollie read publications for car wash owners to learn the best practices in the industry. Then she implemented the best practices. Rollie is using ____ to improve her car wash.
A) specialized assets
B) benchmarking
C) strategic commitments
D) inertia
E) the Icarus paradox
Answer: B
Q3) The importance of reliability in building competitive advantage has increased dramatically over the past several decades.
A)True
B)False
Answer: True
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Chapter 4: Building Competitive Advantage Through Functional-Level Strategies
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Sample Questions
Q1) Discuss why superior efficiency is important and the many ways that different parts of the organization can help achieve it.
Q2) Managers should not become complacent about efficiency-based cost advantages because:
A) both learning effects and economics of scale go on forever.
B) the experience curve is likely to bottom out at some point.
C) cost advantages gained from experience effects are not affected by the development of new technologies.
D) unit costs keep reducing as output increases.
E) the experience curve steadily rises after a certain threshold is reached indicating an increase in unit costs.
Q3) Unlike traditional manufacturing, flexible manufacturing:
A) decreases efficiency.
B) lowers unit costs.
C) limits an organization's ability to customize products.
D) allows the production of only standardized products.
E) limits an organization's ability to offer greater product variety.
Q4) Identify the two dimensions of quality and describe how companies can achieve them.
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Chapter 5: Business-Level Strategy
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Sample Questions
Q1) All focus strategies entail serving a specific market segment using a differentiation approach.
A)True
B)False
Q2) A company pursuing a focus strategy:
A) attempts to serve all market segments.
B) concentrates on building market share in one market segment.
C) typically has more resources at its disposal than a differentiator does.
D) has a greater impact on costs and revenues.
E) produce different offerings for different segments.
Q3) List the features that need to be included in functional strategies to improve differentiation.
Q4) The generic business-level strategies are cost leadership, differentiation, and mass marketing.
A)True B)False
Q5) In commodity markets, competitive advantage goes to the company that has the lowest costs.
A)True
B)False
Page 7
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Chapter 6: Business-Level Strategy and the Industry Environment
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Sample Questions
Q1) Alpha corporation owns and controls several retail outlets and is pursuing a strategy called franchising.
A)True
B)False
Q2) Which of the following factors in an industry is most likely to cause excess capacity?
A) Technologically outdated production units
B) High customer demand
C) A company's investments in newer production technology
D) Lack of competition from new entrants
E) Limited number of outlets in certain locations
Q3) Product proliferation refers to the strategy of filling the niches by catering to the needs of customers in all market segments.
A)True
B)False
Q4) One characteristic of embryonic industries is unconventional and specialized distribution channels.
A)True
B)False
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Chapter 7: Strategy and Technology
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Sample Questions
Q1) When a first mover does not have complementary assets, barriers to imitation are high, and there are several capable competitors, the first mover should:
A) license the innovation to others.
B) enter into a joint venture to protect the product.
C) lower the barriers for imitation.
D) sell the technology outright to another firm.
E) wait until competitors develop an alternative product.
Q2) Network effects arise in an industry where:
A) the size of the network of complementary products is a primary determinant of demand for an industry's product.
B) a large network of companies in an industry use the same business model and strategies.
C) a company is able to adhere to the same technical standards across its network of outlets.
D) companies network together and lobby for establishing certain technical standards.
E) companies that are not in favor of a technical standard network together.
Q3) What are technical standards, why are they important, and how are they established?
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Chapter 8: Strategy in the Global Environment
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Sample Questions
Q1) Cost reduction pressures can be particularly intense in industries producing:
A) commodity-type products.
B) highly differential products.
C) highly customized services.
D) goods that have no close substitutes.
E) goods that need minimal advertising.
Q2) Global economies of scale can be realized by:
A) restricting the expansion of overseas sales.
B) limiting the utilization of production facilities.
C) curbing bargaining power with suppliers.
D) decreasing cost savings through learning effects.
E) spreading the fixed costs associated with developing.
Q3) Which of the following is not an attribute of a national or country-specific environment that has an impact on global competitiveness of companies located in that nation?
A) Factor endowments
B) Local demand conditions
C) Related and supporting industries
D) Strategy, structure, and rivalry of firms within the nation
E) Advertising expenses
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Chapter 9: Corporate-Level Strategy: Horizontal Integration,
Vertical Integration, and Strategic Outsourcing
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Sample Questions
Q1) In which of the following is a firm most likely to lose direct control over value creation activities?
A) Merger
B) Acquisition
C) Vertical integration
D) Strategic alliance
E) Outsourcing
Q2) Vertical integration can raise costs if, over time, a company's leaders continue to purchase inputs from company-owned suppliers even when independent suppliers can supply the same inputs at lower cost.
A)True
B)False
Q3) Which of the following is a benefit that firms should expect to gain from the use of horizontal integration?
A) Reduced risk of coming into conflict with the FTC
B) Better realization of economies of scale
C) Greater control over the entire supply chain
D) Reduced risk of holdup
E) Reduced need for investment in core activities
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Chapter 10: Corporate-Level Strategy: Related and Unrelated
Diversification
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Sample Questions
Q1) Sara Lee Corp., a clothing firm, purchased Platex Apparel Inc. This purchase helped to make Sara Lee Corp. one of the largest makers of women's apparel in the United States. Sara Lee Corp. utilized an acquisition strategy.
A)True
B)False
Q2) Which of the following entry strategies should be used when speed is an important consideration?
A) Internal new venture
B) Acquisition
C) Joint venture
D) Unrelated diversification
E) Related diversification
Q3) If a company's core skills are highly specialized and have few applications outside the core business, then a company should pursue a related diversification strategy.
A)True
B)False
Q4) What are the two general types of diversification and when would one be preferred over the other?
Page 12
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Chapter 11: Corporate Performance, Governance, and Business Ethics
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Sample Questions
Q1) Emphasizing current profitability at the expense of future profitability and profit growth makes an enterprise more attractive to shareholders.
A)True
B)False
Q2) There is a certain amount of performance ambiguity inherent in the relationship between a principal and agent.
A)True
B)False
Q3) Jacob is a senior manager at Aries LLC. He has been earning significant bonuses in addition to his salary. He often misrepresents the financial information about the operations he handles, and he acquires more financial resources than he actually needs to run operations. Which of the following concepts is illustrated in this scenario?
A) Glass-ceiling effect
B) Self-dealing
C) Agency strategy
D) Takeover constraints
E) Stock options
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Page 13
Chapter 12: Implementing Strategy Through Organization
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Sample Questions
Q1) Control systems at higher levels of management should provide the basis for lower-level managers to design their control systems.
A)True
B)False
Q2) The specific collection of values, norms, beliefs, and attitudes shared by people and groups in a company is commonly referred to as:
A) organizational fit.
B) organizational culture.
C) organizational development.
D) organizational positioning.
E) organizational design.
Q3) A drawback of the functional structure is:
A) that each worker must report to more than one superior.
B) the difficulty in communicating and coordinating across functions.
C) too much decentralization of decision-making authority.
D) its lack of flexibility in decision-making.
E) the need to downsize before implementing this structure.
Q4) Identify and discuss the three building blocks of organizational structure.
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