A large, multidivisional business has three levels in its hierarchy of strategy:
A. Corporate -- Business -- Functional.
B. Environmental -- Corporate -- Functional.
C. Environmental -- Enterprise -- Corporate.
D. Business -- Divisional -- Functional.
E. Industry -- Corporate -- Divisional.
A. Corporate -- Business -- Functional.
IBM under CEO Louis Gerstner and his strategic decision to invest in services in1993, is an example of which mode of strategic decision-making?
A. adaptive
B. entrepreneurial
C. logical incrementalism
D. planning
E. None of these
D. planning
The phenomenon that describes corporations as evolving through relatively long periods of stability punctuated by relatively short bursts of fundamental change is known as:
A. revolution.
B. equilibrium.
C. punctuated equilibrium.
D. logical incrementalism.
E. discontinuity.
C. punctuated equilibrium.
Punctuated equilibrium describes organizations as evolving through relatively long periods of stability punctuated by relatively short bursts of fundamental change.
True
False
True
Ina survey of 50 corporations, which of the following was rated as a benefits of strategic management?
A. clearer sense of vision for the firm
B. higher levels of employee motivation
C. higher levels of job satisfaction
D. improved productivity
E. lower employee turnover
A. clearer sense of vision for the firm
The time horizon involved with regard to basic financial planning is usually:
A. one year.
B. one quarter.
C. more than five years.
D. less than one month.
E. more than three years.
A. one year
Which of the following is NOT a characteristic of strategic decisions as mentioned in the text?
A. directive
B. consequential
C. rare
D. continuous E. require commitment of substantial resources
D. continuous
Population ecology is a theory that proposes organizations can and do adapt to change by imitating other successful organizations.
A. True
B. False
B. False
The currency used to integrate the monetary systems of the European Union (EU) is called the
A. peso.
B. dollar. C. euro.
D. franc.
E. pound.
C. euro.
The corporate mission is best described by which one of the following?
A. A description of the activities carried out by the organization. B. The purpose or reason for the corporation's existence.
C. A description of top management's responsibilities.
D. A statement of corporate objectives.
E. A statement of what the organization would like to become.
B. The purpose or reason for the corporation's existence.
A goal differs from an objective because it
A. is open-ended.
B. is quantified.
C. specifies measurable results.
D. is clearly specified.
E. provides a time horizon.
A. is open-ended.
Which of the following is NOT one the four triggering events listed in the text that are the stimulus for a strategic change?
A. intervention by the organization's bank B. annual strategic planning conference
C. threat of a takeover
D. new CEO
E. awareness by management of decreased profitability
B. annual strategic planning conference
Research done by Henry Mintzberg suggests that strategy formulation
A. is typically an irregular and a discontinuous process.
A business strategy may include competitive or cooperative strategies
A true
B false
B false
A hierarchy of strategy emphasizes the need for the three levels of strategy to complement and support one another
A. True
B. False
A. True
A program is:
A. a detailed cost statement in terms of dollars.
B. A system of sequential steps.
C. A statement of the activities needed to accomplish a single-use plan.
D. The process by which strategies and policies are put into action.
E. None of these
C. A statement of the activities needed to accomplish a single-use plan.
Which one of the following is included in the firm's societal environment?
A. competitors B. economic forces
C. resources
D. governments
E. special interest groups
B. economic forces
Research indicates that a broad mission statement may be best in a turbulent environment.
A. True
B. False
B. False
All of the following reflect categories of organizational risk as a result ofclimate change EXCEPT
A. regulatory risk.
B. supply chain risk.
C. sustainability risk.
D. reputational risk.
E. litigation risk.
C. sustainability risk.
As more industries become global, strategic management is becoming less important in positioning a company for long-term competitive advantage.
A true
B False
B False
The type of strategy which describes a company's overall direction in terms of its general attitude toward growth and the management of its various businesses and product lines is.
A. functional.
B. operational.
C. business.
D. product.
E. corporate.
E. corporate.
A budget is a statement of a corporation's programs in dollar terms. Which is NOT true of the budgetary function?
A. It is used in planning and control. B. It serves as a detailed plan of strategy in action.
C. Only one budget is necessary to capture all programs.
D. It details the impact on the firm's future financial situation.
E. It is used as a means of measuring success based on a certain criteria.
C. Only one budget is necessary to capture all programs.
Which one of the following is included in the firm's task environment?
A. technological factors
B. sociocultural factors
C. economic factors
D. stockholders
E. political-legal forces
D. stockholders
Which theory proposes that once an organization is successfully established in a particular environmental niche, it is unable to adapt to changing conditions?
C. population ecology
Which of the following statements is not true of a strategic inflection point?
A. The term was coined by Andy Grove, past CEO of Intel Corporation B. This represents what happens to a business when a major change takes place due to the introduction of new technology
C. This represents what happens to a business when a major change takes place due to a change in customers' values or a change in what customers prefer
D. This represents what happens to a business when a major change takes place due to a different regulatory environment
E. A new CEO is an example of a strategic inflection point.
E. A new CEO is an example of a strategic inflection point.
More than ________ of outside directors surveyed that they had been named as part of a lawsuit against the corporation
C. 40%
The average large, publicly-held U.S. corporation has around.
A. 7 directors.
B. 10 directors.
C. 19 directors.
D. 25 directors.
E. 30 directors.
B. 10 directors.
In implementing the Sarbanes-Oxley Act, the SEC required in 2003 that a company disclose
A. the number of insiders on their PR committee. B. if it has adopted a code of ethics that applied to the CEO and the CFO.
C. the CEO's pay.
D. the CFO's pay.
E. All of these
B. if it has adopted a code of ethics that applied to the CEO and the CFO.
According to ________ theory, _______ directors tend to identify with the corporation.
A. agency, inside
B. corporate governance; inside
C. stewardship; inside
D. corporate governance; affiliated
E. stewardship; outside
C. stewardship; inside
The role of the board of directors in the strategic management of the corporation is likely to be less active in the future.
A True
B False
B False
Which of the following is NOT a task of the board of directors in strategic management?
A. to monitor B. to implement
C. to influence
D. to initiate and determine
E. to evaluate
B. to implement
A highly involved board does all of the following EXCEPT:
A. tends to be very active.
B. provides advice when necessary.
C. keeps management alert.
D. takes their tasks of initiating and determining strategy very seriously.
E. manage the every day operations of the organization.
E. manage the every day operations of the organization.
________theory argues that senior executives over time tend to view the corporation as an extension of themselves.
A. Population ecology
B. Motivation
C. Stewardship
D. Agency
E. Goal setting
C. Stewardship
A direct interlocking directorate occurs when two corporations have directors who also serve on the board of a third firm, such as a bank.
A True
B False
B False
Research reveals that the likelihood of a firm engaging in illegal behavior or being sued declines
A. with a larger board
B. with the addition of insiders on the board.
C. with the addition of outsiders on
the board.
D. with a smaller board.
E. with a well-compensated board.
C. with the addition of outsiders on the board.
A staggered board
A. increases the chances of a hostile takeover.
B. has only a portion of the board stand for election each year.
C. makes it easier for shareholders to curb a CEO's power.
D. is seen in less than 50% of U.S. boards.
E. All of these
B. has only a portion of the board stand for election each year.
The U.S. Clayton Act and Banking Act of 1933
A. promote interlocking directorates by U.S. companies to foster better communications and working relationships.
B. prohibit acts or contracts tending to create a monopoly.
C. prevent unfair practices in interstate commerce.
D. promote racial parity on the board of directors.
E. prohibit interlocking directorates by U.S. companies competing in the same industry.
E. prohibit interlocking directorates by U.S. companies competing in the same industry.
The confidence levels of executive leaders may blind them to information that is contrary to a decided course of action; this may help to understand why over confident CEO's are more likely to conduct mergers and acquisitions.
A true
B False
A true
Which of the following is a trend in corporate governance?
A. Boards are getting less involved in shaping corporate strategy.
B. Shareholders are demanding that directors and top managers own less stock in the company. C. Boards are establishing mandatory retirement ages for board members.
D. Boards are getting larger.
E. Boards are looking for fewer members with international experience.
C. Boards are establishing mandatory retirement ages for board members.
Under what circumstances does an INDIRECT interlocking directorate exist?
A. When both management and the board establish corporate strategic management.
B. When a corporation's employees are included on its board.
C. When one or more individuals on one board also serve on a board of a second firm. D. When all board members are also employed by the corporation.
E. When two corporations have directors who serve on the board of a third firm.
E. When two corporations have directors who serve on the board of a third firm.
Board members who are most likely to face a conflict of interest are known as
A. family directors.
B. affiliated directors.
C. interlocked directors.
D. retired directors.
E. management directors.
E. management directors.
Board members who are not employed by the corporation, but handle the legal or insurance needs of the firm and are thus not a true "outsider" are what kind of directors?
C. affiliated directors
The percentage of CEOs of British corporations who also serve as chairman of the board is
A. 5%.
B. 20%. C. 46%.
D. 68%.
E. over 90%.
A. 5%.
According to the text, most publicly owned large corporations today tend to have boards with what degree of involvement in the strategic management process?
A. passive to minimal
B. minimal to nominal
C. rubber stamp type
D. nominal to active
E. active to catalyst
D. nominal to active
Which of the following is NOT a key characteristic of transformational executive leaders?
A. The CEO presents a role for others to identify with and to follow.
B. The CEO communicates high performance standards for all employees.
C. The CEO demonstrates confidence in the employees' abilities to meet the expressed high standards.
D. The CEO energizes the board to formulate strategy.
E. The CEO articulates a strategic vision for the corporation.
D. The CEO energizes the board to formulate strategy.
Who was considered one of the first green business executives?
A. Bob Nardelli
B. Anita Roddick
C. Brian Roberts
D. Walt Disney
E. Louis Gerstner
B. Anita Roddick
The requirements of a board of directors vary significantly by country and by state; however, there is a developing consensus as to what the major responsibilities should be. Which of the following is NOT one of the responsibilities?
A. Reviewing and approving the use of resources.
B. Setting corporate strategy, overall direction, mission or vision.
C. Controlling, monitoring, or supervising top management.
D. Becoming directly involved in managerial decisions.
E. Hiring and firing the CEO and top management.
D. Becoming directly involved in managerial decisions.
The role of the board of directors in the strategic management of the corporation is likely to
A. be more active in the future.
B. be less active in the future.
C. be nonexistent as planning departments take over.
D. remain the same.
E. shift more toward managing daily operations.
A. be more active in the future.
The majority of outside directors are active or retired CEO's and COO's of other corporations.
A. True
B. False
A. True
All of the following criteria reflect survey findings of the characteristics of a good director EXCEPT
A. willing to challenge management when necessary.
B. expertise on global business issues.
C. understands the firm's key technologies and processes.
D. available outside meetings to advise management.
E. willing to always agree with executive decisions.
E. willing to always agree with executive decisions.
