Question 1

Executive leaders champion and guide ideas.

Accepted Answer

A) True 
 B)False

Question 2

Stockholders as a stakeholder group are interested primarily by

Accepted Answer

A)  payment of interest and repayment of principal.
B)  value and warranties.
C)  dividends and capital appreciation.
D)  taxes and compliance with regulations.E) A) and C)
F) A) and D)

Question 3

Corporate-level strategy addresses how firms compete and outperform their rivals as well as achieve and sustain competitive advantages.

Accepted Answer

A) True 
 B)False

Question 4

Auditors, banks, and analysts are external control mechanisms to ensure effective corporate governance.

Accepted Answer

A) True 
 B)False

Question 5

A good mission statement, by addressing each principal theme, must communicate why an organization is special and different.

Accepted Answer

A) True 
 B)False

Question 6

The three primary participants in corporate governance are: (1) the shareholders, (2) the management (led by the chief executive officer), and (3) the employees.

Accepted Answer

A) True 
 B)False

Question 7

Whirlpool's transformation under corporate vice president Nancy Snyder included financial investments in

Accepted Answer

A)  shareholder dividends.
B)  capital spending.
C)  community development.
D)  paying down borrowed debt.E) All of the above
F) A) and B)

Question 8

What constitutes socially responsible behavior changes over time.

Accepted Answer

A) True 
 B)False

Question 9

Strategy formulation involves decisions made by firms regarding investments, commitments, and other aspects of operations that create and sustain competitive advantage.

Accepted Answer

A) True 
 B)False

Question 10

Social responsibility is the idea that organizations are not only accountable to stockholders but also to the community-at-large.

Accepted Answer

A) True 
 B)False

Question 11

To develop and mobilize people and other assets, leaders are needed throughout the organization.

Accepted Answer

A) True 
 B)False

Question 12

New value creation is a major engine for economic growth and is the main focus of _______________ strategy.

Accepted Answer

A)  portfolio
B)  corporate-level
C)  business-level
D)  entrepreneurialE) B) and C)
F) B) and D)

Question 13

Successful organizations are effective in motivating people. Employees work best when

Accepted Answer

A)  they are asked to do their best.
B)  work requirements are vague and unclear.
C)  they are striving toward specific goals.
D)  they are guided by an abstract mission statement.E) A) and B)
F) A) and C)

Question 14

Managers should do more than focus on short-term financial performance. One concept that helps managers do this is stakeholder symbiosis. This means that

Accepted Answer

A)  stakeholders are dependent on each other for their success.
B)  stakeholders look out for their individual interests.
C)  one can only gain at the expense of someone else.
D)  all stakeholders want to maximize shareholder returns.E) A) and D)
F) A) and B)

Question 15

Former Chrysler vice chairman Robert Lutz observed that companies exist to serve the shareholder and create shareholder value. He insisted that the only person who owns the company is the person who paid good money for it. This is an example of a symbiotic approach to stakeholder management.

Accepted Answer

A) True 
 B)False

Question 16

Strategic management involves the recognition of trade-offs between effectiveness and

Accepted Answer

A)  cost.
B)  value.
C)  return on investment.
D)  efficiency.E) A) and B)
F) A) and C)

Question 17

The vision and mission statements of a company set the overall direction of the organization. Strategic objectives serve what role?

Accepted Answer

A)  operationalize the mission statement
B)  modify the mission statement
C)  are a shorter version of the mission statement
D)  are only clarified by the board of directorsE) A) and C)
F) All of the above

Question 18

Community stakeholders are concerned primarily with

Accepted Answer

A)  product warranties.
B)  corporate citizenship behavior.
C)  capital appreciation.
D)  repayment of principal.E) A) and B)
F) A) and C)

Question 19

According to Peter Senge, a leading strategic management author, creative tension results from the need to incorporate both short-term and long-term perspectives in strategic management.

Accepted Answer

A) True 
 B)False

Question 20

The Fairmont Royal York in Toronto invested $25,000 in an energy conservation program to replace leaky steam traps and fix leaks, which resulted in an annual savings of over $200,000. This is an example of a sustainability effort to

Accepted Answer

A)  increase innovation.
B)  decrease revenue.
C)  lower costs.
D)  increase customers.E) A) and B)
F) A) and C)

Exam 1: Strategic Management: Creating Competitive Advantages

Strategy formulation involves decisions made by firms regarding investments, commitments, and other aspects of operations that create and sustain competitive advantage.

Correct AnswerverifiedShow Answer

A good mission statement, by addressing each principal theme, must communicate why an organization is special and different.

Correct AnswerverifiedShow Answer

What constitutes socially responsible behavior changes over time.

Correct AnswerverifiedShow Answer

Stockholders as a stakeholder group are interested primarily by

Correct AnswerverifiedShow Answer

Successful organizations are effective in motivating people. Employees work best when

Correct AnswerverifiedShow Answer

The three primary participants in corporate governance are: (1) the shareholders, (2) the management (led by the chief executive officer), and (3) the employees.

Correct AnswerverifiedShow Answer

Auditors, banks, and analysts are external control mechanisms to ensure effective corporate governance.

Correct AnswerverifiedShow Answer

Corporate-level strategy addresses how firms compete and outperform their rivals as well as achieve and sustain competitive advantages.

Correct AnswerverifiedShow Answer

According to Peter Senge, a leading strategic management author, creative tension results from the need to incorporate both short-term and long-term perspectives in strategic management.

Correct AnswerverifiedShow Answer

New value creation is a major engine for economic growth and is the main focus of _______________ strategy.

Correct AnswerverifiedShow Answer

The Fairmont Royal York in Toronto invested $25,000 in an energy conservation program to replace leaky steam traps and fix leaks, which resulted in an annual savings of over $200,000. This is an example of a sustainability effort to

Correct AnswerverifiedShow Answer

Executive leaders champion and guide ideas.

Correct AnswerverifiedShow Answer

Managers should do more than focus on short-term financial performance. One concept that helps managers do this is stakeholder symbiosis. This means that

Correct AnswerverifiedShow Answer

Former Chrysler vice chairman Robert Lutz observed that companies exist to serve the shareholder and create shareholder value. He insisted that the only person who owns the company is the person who paid good money for it. This is an example of a symbiotic approach to stakeholder management.

Correct AnswerverifiedShow Answer

Strategic management involves the recognition of trade-offs between effectiveness and

Correct AnswerverifiedShow Answer

The vision and mission statements of a company set the overall direction of the organization. Strategic objectives serve what role?

Correct AnswerverifiedShow Answer

Community stakeholders are concerned primarily with

Correct AnswerverifiedShow Answer

To develop and mobilize people and other assets, leaders are needed throughout the organization.

Correct AnswerverifiedShow Answer

Whirlpool's transformation under corporate vice president Nancy Snyder included financial investments in

Correct AnswerverifiedShow Answer

Social responsibility is the idea that organizations are not only accountable to stockholders but also to the community-at-large.

Correct AnswerverifiedShow Answer

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