MN15 Reviewer

1) Most strategists believe that an organization's well-being depends on evaluation of the
strategic-management process.
Answer: TRUE
Diff: 1
Objective: 9.02 Explain why strategy evaluation is complex, sensitive, and yet essential for
organizational success.
Learning Outcome: Describe how organizational performance is measured
2) Adequate and timely feedback is important to effective strategy evaluation.

Answer: TRUE
Diff: 1
AACSB: Written and oral communication
3) Too much emphasis on evaluating strategies may be expensive and counterproductive.

Answer: TRUE
Diff: 2
4) Strategy evaluation should have a long-run focus and avoid a short-run focus.
Answer: FALSE
Diff: 2
5) According to Richard Rumelt, consonance and consistency are mostly based on a firm's
external assessment.
Answer: FALSE
Diff: 2
6) According to Rumelt, consistency and feasibility are largely based on a firm's internal
assessment.
Answer: TRUE
Diff: 2
7) Consistency, distinctiveness, advantage, and feasibility are Richard Rumelt's four criteria for
evaluating a strategy.
Answer: FALSE
Diff: 2
8) Strategy evaluation is becoming increasingly easier with the passage of time, given
technological advances.
Answer: FALSE
Diff: 3
9) The decreasing time span for which planning can be done with any degree of certainty is a
reason strategy evaluation is more difficult today.
Answer: TRUE
Diff: 2
10) Strategies may be inconsistent if policy problems and issues continue to be brought to the top
for resolution.
Answer: TRUE
Diff: 1
1) Many people consider it unethical for a firm to be socially irresponsible.

Answer: TRUE
Diff: 1
AACSB: Ethical understanding and reasoning
Objective: 10.03 Explain why good ethics is good business in strategic management.
Learning Outcome: Discuss the roles of ethics and social responsibility in strategic management
2) Social responsibility refers to actions an organization takes that are legally required to protect
or enhance the well-being of living things.
Answer: FALSE
Diff: 2
3) Sustainability refers to the extent that an organization's operations and actions protect, mend,
and preserve rather than harm or destroy the natural environment.
Answer: TRUE
Diff: 1
Objective: 10.07 Discuss specific ways that firms can be good stewards of the natural
environment.
4) Good ethics is not a prerequisite for good strategic management.

Answer: FALSE
Diff: 2
5) According to a study by the Institute of Business Ethics, companies that do not display ethical
conduct consistently outperform companies that show a clear commitment to ethical conduct.
Answer: FALSE
Diff: 2
Objective: 10.07 Discuss specific ways that firms can be good stewards of the natural
environment.
6) Bad ethics can derail all but the best strategic plans.
Answer: FALSE
Diff: 3
7) Business ethics can be defined as principles of conduct within organizations that guide
decision making and behavior.
Answer: TRUE
Diff: 1
8) A rising tide of consciousness about the importance of business ethics is sweeping the United
States and the rest of the world.
Answer: TRUE
Diff: 1
9) CEOs and business owners should delegate the responsibility for ensuring that high ethical
principles are espoused and practiced in an organization.
Answer: FALSE
Diff: 2
Objective: 10.04 Explain how firms can best ensure that their code of business ethics guides
decision making instead of being ignored.
10) Some of the largest payouts for class-action legal fraud suits ever were against Enron ($7.16
billion) and WorldCom ($6.16 billion).
Answer: TRUE
Diff: 1
1) Effective strategy formulation can usually guarantee successful strategy implementation.
Answer: FALSE
Diff: 2
Objective: 7.03 Explain why strategy implementation is more difficult than strategy formulation.
Learning Outcome: Discuss best practices for strategy implementation
2) Strategy formulation is the managing of forces during the action, whereas strategy
implementation is the positioning of forces before the action.
Answer: FALSE
Diff: 1
3) Strategy formulation requires coordination among a few individuals, but strategy

implementation requires coordination among many.
Answer: TRUE
Diff: 2
4) It is always easier to say you are going to do something (strategy formulation) than to actually
do it (strategy implementation).
Answer: TRUE
Diff: 1
5) Unlike strategy formulation, strategy implementation varies considerably among different

types and sizes of organizations.
Answer: TRUE
Diff: 2
6) A bottom-up flow of communication is essential for developing bottom-up support.
Answer: FALSE
Diff: 2
AACSB: Reflective thinking
7) Annual objectives are key components in the strategic-management process because they
dictate how resources will be allocated.
Answer: TRUE
Diff: 2
Objective: 7.04 Discuss the importance of annual objectives and policies in achieving
organizational commitment for strategies to be implemented.
8) Horizontal consistency is more important than vertical consistency in developing annual

objectives.
Answer: FALSE
Diff: 2
9) Undesirable conduct such as distorting the records can be a result of overemphasis on

achieving objectives.
Answer: TRUE
Diff: 1
10) Policies refer to specific guidelines, methods, procedures, rules, forms, and administrative
practices established to support and encourage work toward stated goals.
Answer: TRUE
Diff: 1
11) Strategies clarify what can and cannot be done in pursuit of an organization's objectives.
Answer: FALSE
Diff: 2
12) A recent study reports that nearly 90 percent of employers today offer some kind of wellness
incentives or prizes to employees who "get healthier."
Answer: TRUE
Diff: 2
Objective: 7.02 Explain why corporate wellness has become so important in strategic planning.
13) Four types of resources that can be used to achieve desired objectives are financial, physical,
human, and technological.
Answer: TRUE
Diff: 1
14) Avoidance, defusion, and confrontation are the classifications for the various types of
conflict that can arise in organizations.
Answer: FALSE
Diff: 2
AACSB: Interpersonal relations and teamwork
15) Well-run organizations are able to completely avoid conflict.

Answer: FALSE
Diff: 3
55) Too much emphasis on evaluating strategies
A) may be expensive and counterproductive.
B) is not possible - the more emphasis the better.
C) is good for morale, as employees like being closely evaluated.
D) is always advised if the firm can afford it.
E) is worse than too little or no evaluation.
Answer: A
Diff: 2
56) What is the cornerstone of effective strategy evaluation?

A) Adequate and timely feedback
B) Quality and quantity of managers
C) Smaller ratio of top- to lower-level management
D) Evaluation preceding implementation stage
E) Punitive corrective actions
Answer: A
Diff: 3
57) All of these are Richard Rumelt's criteria to evaluate a strategy EXCEPT
A) advantage.
B) consistency.
C) feasibility.
D) distinctiveness.
E) consonance.
Answer: D
Diff: 2
58) With the passage of time strategy evaluation is becoming
A) increasingly difficult.
B) much simpler.
C) very convenient.
D) an unnecessary activity.
E) less important.
Answer: A
Diff: 2
59) All of the following are reasons strategy evaluation is more difficult today EXCEPT
A) a dramatic increase in the environment's complexity.
B) the increasing number of variables.
C) the increase in the number of both domestic and world events affecting organizations.
D) the increasing time span for which planning can be done with any degree of certainty.
E) the rapid rate of obsolescence of even the best plans.
Answer: D
Diff: 1
60) Which of the following is NOT a reason for the increasing difficulty of evaluating strategies?
A) Product life cycles are longer.
B) Domestic and world economies are less stable.
C) Product development cycles are shorter.
D) Technological advancement is more rapid.
E) Change is occurring more frequently.
Answer: A
Diff: 2
61) Success today

A) guarantees success tomorrow.
B) is no guarantee of success tomorrow.
C) should lull a firm into complacency.
D) is all that really matters.
E) none of the above.
Answer: B
Diff: 2
62) According to Rumelt, the final broad test of strategy is its
A) advantage.
B) feasibility.
C) consonance.
D) consistency.
E) distinctiveness.
Answer: B
Diff: 2
63) Competitive advantage normally is the result of superiority in resources, skills, or

A) employees.
B) position.
C) consistency.
D) feasibility.
E) governance.
Answer: B
Diff: 1
Learning Outcome: Discuss strategies that companies use to acquire and maintain competitive
advantages
64) What term refers to the need for strategists to examine sets of trends, as well as individual
trends, in evaluating strategies?
A) Consistency
B) Consonance
C) Synergy
D) Feasibility
E) Advantage
Answer: B
Diff: 2
65) Rumelt's criteria of consonance refers to the need for strategists to examine
A) inconsistent goals.
B) sets of trends.
C) impractical objectives.
D) competitive advantages.
E) the costs associated with particular strategies.
Answer: B
Diff: 2
66) If success for one organizational department means failure for another department, then
strategies may be
A) synergistic.
B) advantageous.
C) trendy.
D) feasible.
E) inconsistent.
Answer: E
Diff: 1
67) Modern organizational realities demand that employees demonstrate greater

A) flexibility.
B) innovation.
C) creativity.
D) initiative.
E) all of the above
Answer: E
Diff: 2
68) Strategy-evaluation activities should ideally be performed
A) just on a periodic basis.
B) only at the onset of a problem.
C) on a continuous basis.
D) solely upon completion of major projects.
E) annually only.
Answer: C
Diff: 1
69) Corrective actions are almost always ________ except when external and internal factors
have not significantly changed and the firm is progressing satisfactorily toward achieving stated
objectives.
A) unnecessary
B) needed
C) undesirable
D) prohibitively expensive
E) futile
Answer: B
Diff: 2
Objective: 9.01 Describe a practical framework for evaluating strategies.
70) If you discover during the course of strategy evaluation that major changes have occurred in
the firm's internal strategic position, you should
A) continue on the present strategic course.
B) wait until the next quarter to see if things revert.
C) take corrective actions.
D) follow the original strategic plan.
E) none of the above
Answer: C
Diff: 3
AACSB: Analytical Thinking
54) Which of these is a basic activity of strategy evaluation?

A) Reviewing the underlying bases of current strategies
B) Comparing expected results with actual results
C) Taking corrective actions
D) Choices B and C only
E) All of the above
Answer: E
Diff: 1
55) Too much emphasis on evaluating strategies
A) may be expensive and counterproductive.
B) is not possible - the more emphasis the better.
C) is good for morale, as employees like being closely evaluated.
D) is always advised if the firm can afford it.
E) is worse than too little or no evaluation.
Answer: A
Diff: 2
56) What is the cornerstone of effective strategy evaluation?

A) Adequate and timely feedback
B) Quality and quantity of managers
C) Smaller ratio of top- to lower-level management
D) Evaluation preceding implementation stage
E) Punitive corrective actions
Answer: A
Diff: 3
57) All of these are Richard Rumelt's criteria to evaluate a strategy EXCEPT
A) advantage.
B) consistency.
C) feasibility.
D) distinctiveness.
E) consonance.
Answer: D
Diff: 2
58) With the passage of time strategy evaluation is becoming
A) increasingly difficult.
B) much simpler.
C) very convenient.
D) an unnecessary activity.
E) less important.
Answer: A
Diff: 2
59) All of the following are reasons strategy evaluation is more difficult today EXCEPT
A) a dramatic increase in the environment's complexity.
B) the increasing number of variables.
C) the increase in the number of both domestic and world events affecting organizations.
D) the increasing time span for which planning can be done with any degree of certainty.
E) the rapid rate of obsolescence of even the best plans.
Answer: D
Diff: 1
60) Which of the following is NOT a reason for the increasing difficulty of evaluating strategies?
A) Product life cycles are longer.
B) Domestic and world economies are less stable.
C) Product development cycles are shorter.
D) Technological advancement is more rapid.
E) Change is occurring more frequently.
Answer: A
Diff: 2
61) Success today

A) guarantees success tomorrow.
B) is no guarantee of success tomorrow.
C) should lull a firm into complacency.
D) is all that really matters.
E) none of the above.
Answer: B
Diff: 2
62) According to Rumelt, the final broad test of strategy is its
A) advantage.
B) feasibility.
C) consonance.
D) consistency.
E) distinctiveness.
Answer: B
Diff: 2
63) Competitive advantage normally is the result of superiority in resources, skills, or

A) employees.
B) position.
C) consistency.
D) feasibility.
E) governance.
Answer: B
Diff: 1
Learning Outcome: Discuss strategies that companies use to acquire and maintain competitive
advantages
64) What term refers to the need for strategists to examine sets of trends, as well as individual
trends, in evaluating strategies?
A) Consistency
B) Consonance
C) Synergy
D) Feasibility
E) Advantage
Answer: B
Diff: 2
65) Rumelt's criteria of consonance refers to the need for strategists to examine
A) inconsistent goals.
B) sets of trends.
C) impractical objectives.
D) competitive advantages.
E) the costs associated with particular strategies.
Answer: B
Diff: 2
66) If success for one organizational department means failure for another department, then
strategies may be
A) synergistic.
B) advantageous.
C) trendy.
D) feasible.
E) inconsistent.
Answer: E
Diff: 1
67) Modern organizational realities demand that employees demonstrate greater

A) flexibility.
B) innovation.
C) creativity.
D) initiative.
E) all of the above
Answer: E
Diff: 2

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1) Most strategists believe that an organization's well-being depends on evaluation of the

2) Adequate and timely feedback is important to effective strategy evaluation.

3) Too much emphasis on evaluating strategies may be expensive and counterproductive.

1) Many people consider it unethical for a firm to be socially irresponsible.

4) Good ethics is not a prerequisite for good strategic management.

3) Strategy formulation requires coordination among a few individuals, but strategy

5) Unlike strategy formulation, strategy implementation varies considerably among different

8) Horizontal consistency is more important than vertical consistency in developing annual

9) Undesirable conduct such as distorting the records can be a result of overemphasis on

15) Well-run organizations are able to completely avoid conflict.

56) What is the cornerstone of effective strategy evaluation?

61) Success today

63) Competitive advantage normally is the result of superiority in resources, skills, or

67) Modern organizational realities demand that employees demonstrate greater

54) Which of these is a basic activity of strategy evaluation?

56) What is the cornerstone of effective strategy evaluation?

61) Success today

63) Competitive advantage normally is the result of superiority in resources, skills, or

67) Modern organizational realities demand that employees demonstrate greater

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