Strategic Management and

Test Bank

Strategic Management and

Business Policy: Globalization,

Innovation and Sustainability Sixteenth Edition

Charles E. Bamford Thomas L. Wheelen Alan N. Hoffman

• David Hunger
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1 Copyright © 2024 Pearson Education, Inc.Strategic Management and Business Policy, 16e (Wheelen) Chapter 1 Basic Concepts of Strategic Management

1) What was strategic management originally called?

• Business policy
• Planning
• Marketing strategy
• Short-term planning
• Operational planning

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 forecast-based planning is usually

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

Answer: C

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 2 / 4

2 Copyright © 2024 Pearson Education, Inc.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 direction 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 involved in formal strategic planning, 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

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3 Copyright © 2024 Pearson Education, Inc.9) In the Bain & Company survey of executives from more than 70 countries, which of the following was the number one tool used by decision makers?

• Customer relationship management
• Strategic planning
• Marketing planning
• Financial management
• Budgeting

Answer: B

Difficulty: Challenging

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 large firm

• 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 help determine the long-term performance of a corporation.

Answer: TRUE

Difficulty: Easy

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

AACSB: Application of knowledge

13) As annual budgets become less useful at stimulating long-term success, managers attempt to propose five-year plans.

Answer: TRUE

Difficulty: Easy

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

AACSB: Application of knowledge

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