D an examination of the organizations internal environment.

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Chapter 1 Basic Concepts in Strategic Management

1) The emphasis of strategic management is on

• long-term performance.
• first line managers.
• the short-run performance of the corporation.
• an examination of the organization's internal environment.
• an investigation of competitor actions.

Answer: A

Difficulty: Easy

Learning Obj.: 1.1: Discuss the benefits of strategic management

AACSB: Application of knowledge

2) Research suggests that strategic management evolves through four sequential phases in corporations. The first phase is

• externally oriented planning.
• basic financial planning.
• internally oriented planning.
• forecast-based planning.
• strategic management.

Answer: B

Difficulty: Easy

Learning Obj.: 1.1: Discuss the benefits of strategic management

AACSB: Application of knowledge

3) The time horizon involved with regard to basic financial planning is usually

• one year.
• one quarter.
• three to five years.
• less than one month.
• five to ten years.

Answer: A

Difficulty: Easy

Learning Obj.: 1.1: Discuss the benefits of strategic management

AACSB: Application of knowledge

4) A difference between basic financial planning and forecast-based planning is

• the time horizon is shorter in forecast-based planning.
• forecast-based planning incorporates environmental data and extrapolates current trends.
• basic financial planning utilizes consultants with sophisticated techniques.
• basic financial planning utilizes scenarios and contingency strategies.
• basic financial planning relies heavily on input from lower levels in the organization.

Answer: B

Difficulty: Moderate

Learning Obj.: 1.1: Discuss the benefits of strategic management

AACSB: Analytical thinking

(Concepts in Strategic Management and Business Policy Globalization, Innovation and Sustainability, 15e Wheelen, Hunger) (Test Bank all Chapters) 1 / 4

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5) Top- down planning that emphasizes formal strategy formulation and leaves the implementation issues to lower management levels is known as

• forecast-based planning.
• externally oriented planning.
• strategic management.
• basic financial planning.
• none of the above

Answer: B

Difficulty: Moderate

Learning Obj.: 1.1: Discuss the benefits of strategic management

AACSB: Application of knowledge

6) In the final phase of strategic management, strategic information is available to

• people throughout the organization.
• the top management responsible for decision-making.
• middle management.
• operational personnel.
• only those responsible for implementing the strategy.

Answer: A

Difficulty: Moderate

Learning Obj.: 1.1: Discuss the benefits of strategic management

AACSB: Application of knowledge

7) In a survey of 50 corporations, which of the following was rated as one of the three top benefits of strategic management?

• clearer sense of strategic vision for the firm
• higher levels of employee motivation
• higher levels of job satisfaction
• improved productivity
• lower employee turnover

Answer: A

Difficulty: Moderate

Learning Obj.: 1.1: Discuss the benefits of strategic management

AACSB: Application of knowledge

8) When an organization is evaluating its strategic position, which is not one of the strategic questions that an organization generally may ask itself?

• Where is the organization now?
• Are we on target to hit our financial objectives next year?
• If no changes are made, where will the organization be in one year?
• If the evaluation is negative, what specific actions should management take?
• If no changes are made, where will the organization be in 10 years?

Answer: B

Difficulty: Moderate

Learning Obj.: 1.1: Discuss the benefits of strategic management

AACSB: Analytical thinking 2 / 4

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9) Research of the planning practices of companies in the oil industry concludes that the real value of modern strategic planning is more in the ________ that is part of a future-oriented planning process than in any resulting written strategic plan.

• planning
• strategic thinking and organizational learning
• resulting written strategic plan
• formality of the process
• improved communication within the organization

Answer: B

Difficulty: Difficult

Learning Obj.: 1.1: Discuss the benefits of strategic management

AACSB: Application of knowledge

10) Strategic planning within a small organization

• may be informal and irregular.
• must be elaborate to allow for future growth.
• should always be formalized and explicitly stated.
• should be done by the president only.
• is unnecessary and a waste of time.

Answer: A

Difficulty: Moderate

Learning Obj.: 1.1: Discuss the benefits of strategic management

AACSB: Application of knowledge

11) Strategic planning in a multidivisional corporation

• should be informal to allow complete understanding by the many participants.
• should be instigated only from the main corporate office.
• should be accomplished quickly to decrease the likelihood of it becoming outdated.
• should encourage a clear delineation between top management and lower-level managers.
• should be a formalized and sophisticated system.

Answer: E

Difficulty: Moderate

Learning Obj.: 1.1: Discuss the benefits of strategic management

AACSB: Application of knowledge

12) Strategic management is the set of managerial decisions that determines the short-term performance of a corporation.

Answer: FALSE

Difficulty: Easy

Learning Obj.: 1.1: Discuss the benefits of strategic management

AACSB: Application of knowledge

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13) In the externally oriented planning phase, plans are developed by heavily involving the input of managers from lower levels.

Answer: FALSE

Difficulty: Moderate

Learning Obj.: 1.1: Discuss the benefits of strategic management

AACSB: Application of knowledge

14) General Electric led the transition from strategic planning to strategic management during the 1980s.

Answer: TRUE

Difficulty: Easy

Learning Obj.: 1.1: Discuss the benefits of strategic management

AACSB: Application of knowledge

15) One of the benefits of strategic management is a clearer sense of strategic vision for the firm.

Answer: TRUE

Difficulty: Moderate

Learning Obj.: 1.1: Discuss the benefits of strategic management

AACSB: Analytical thinking

16) To be effective, strategic management must be a formal process.

Answer: FALSE

Difficulty: Difficult

Learning Obj.: 1.1: Discuss the benefits of strategic management

AACSB: Analytical thinking

17) What are the benefits of strategic management?Answer: The three most highly rated benefits of strategic management are:

• Clearer sense of strategic vision for the organization
• Sharper focus on what is strategically important
• Improved understanding of a rapidly changing environment

Difficulty: Moderate

Learning Obj.: 1.1: Discuss the benefits of strategic management

AACSB: Application of knowledge

18) The integrated internationalization of markets and corporations is called

• normalization.
• economic integration.
• globalization.
• nationalization.
• regionalization.

Answer: C

Difficulty: Easy

Learning Obj.: 1.2: Explain how globalization, innovation, and environmental sustainability influence strategic management

AACSB: Application of knowledge

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