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Exam 1: Strategic Management: Creating Competitiveadvantages

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Question 31

Multiple Choice

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Fortune Brands states they will cut corporate overhead costs by $30 million a year.This is an example of a:

A) nonfinancial strategic objective
B) financial strategic objective
C) vision statement
D) mission statement

E) A) and C)
F) B) and C)

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Question 32

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WellPoint Health Network states: WellPoint will redefine our industry: through a new generation of consumer-friendly products that put individuals back in control of their future.This is an example of a:

A) strategic objective
B) vision statement
C) vague statement of direction
D) line manager's individual goal

E) A) and D)
F) B) and C)

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Question 33

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While working to prioritize and fulfill their responsibilities,members of the board of directors of an organization should:

Strategic management consists of the analyses,decisions,and actions an organization undertakes in order to create and sustain competitive advantages.

Organizational goals and objectives should be vague in order to allow for changes in strategy.

The text discusses several characteristics of effective strategic objectives.List several of these and discuss why the strategic objectives of a firm should meet these criteria.

Members of boards of directors are:

We want to be the top-ranked supplier to our customers.(PPG) This is an example of a:

Stockholders,employees,and the community-at-large are among the stakeholders of a firm.

Discuss the key elements of corporate governance.

Management innovations such as total quality,just-in-time,benchmarking,business process reengineering,and outsourcing are important,but not enough for building sustainable competitive advantage.

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

A firm has a variety of stakeholders.Identify several possible stakeholders a firm may have and discuss how the firm may achieve stakeholder symbiosis.

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.

In large organizations,conflicts can arise between functional areas.In order to resolve these conflicts,strategic objectives:

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

Objectives in organizations should be clear,stated,and known by employees throughout the organization.

Effective leadership can play a large role in fostering corporate entrepreneurship.Corporate entrepreneurship can have a very positive impact on the bottom line of a firm.

The strategic management process should be addressed only by top-level executives.Mid-level and low-level employees are best equipped to implement the strategies of the organization.

Strategy formulation and implementation is a challenging ongoing process.To be effective,it should not involve: