Test Bank for Foundations of Strategy, 2e

Test Bank for Foundations of Strategy, 2e Robert Grant, Judith Jordan (All Chapters)

Chapter_01

• Strategy today is essentially a detailed plan which every member of the organization must follow

to ensure success.

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• T

*b. F

• Strategy is a unifying theme that gives coherence and direction to the actions and decisions of an

individual or an organization.

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*a. T

• F

• For most firms, although good luck may play a part, success is more likely to be a result of a

soundly grounded and well executed strategy.

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*a. T

• F

• Sound strategy and effective implementation largely determine the probability and extent of the

success of a firm.

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*a. T

• F

• A sound strategy relies on four factors: measurable short-term targets; sound understanding of

the competitive environment; objective appraisal of resources; and top down implementation of strategic decisions.

@Pages and References: Pages 6-7

• T

*b. F

• Usually, business success has been proved to rely in the end on superior resources.

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• T

*b. F

• From the military arena, tactics are about actions and techniques for winning battles, whereas

strategy is about winning the war.

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*a. T

• F

• Strategic decisions are likely to have important implications for the organisation as a whole and

involve major resource commitment.

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*a. T

• F

• The evolution of business strategy has been driven more by academic thinking than the practical

needs of business.

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• T

*b. F

• Strategy in the 1950's and 1960's was dominated by corporate planning based on economic

forecasting..

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*a. T

• F

• In the 1970's and 1980's, strategy evolved to be viewed more in terms of positioning the

company in markets and in relation to competitors in order to maximise the potential for profit..

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*a. T

• F

• Strategy has been forced to evolve to cope with an increasingly fast-paced and volatile

environment, making inflexible long-term plans redundant.

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*a. T

• F

• Strategy has evolved from "strategy as a detailed plan" to become "strategy as direction" in the

early 21st century.

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*a. T

• F

• Corporate strategy is also called business strategy, or competitive strategy.

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• T

*b. F

• Strategy is predominantly about countering short-term competition.

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• T

*b. F

• Much can be learned about a firm's actual strategy by looking at where it invests most money,

and what products, services and technologies it is working on.

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*a. T

• F

• Some observers have noticed that there's only a weak link between a firm's intended or stated

strategy, and its actual or realised strategy. 2 / 4

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*a. T

• F

• Stakeholder analysis is a useful tool for analysing how profit is distributed amongst

shareholders..

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• T

*b. F

• Company law throughout the developed, industrialised world obliges firms to primarily focus on

profit for shareholders.

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• T

*b. F

• Paradoxically, the most consistently profitable companies are those whose primary goals are not

stated in terms of profits.

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*a. T

• F

21. Strategy is fundamentally about:

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• Being better than rivals

*b. Success in achieving long-term goals

• Satisfying all stakeholders
• Being an excellent “corporate citizen”

22. Success is fundamentally linked to:

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• A soundly formulated strategy and luck
• An effectively formulated strategy and a strong awareness of the rivals’ strengths
• A clear understanding of the environment and strong political skills

*d. A soundly formulated and effectively implemented strategy

• From the two illustrations describing key attributes of strategy at the beginning of the chapter,

four factors stand out:

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• Goals, environment, appraisal of resources, and social and cultural implications
• Goals, internal and external analysis of the environment, effective implementation, and

awareness of rivals’ strengths *c. Consistent goals, understanding the environment, objective appraisal of resources, and effective implementation

• Goals, environment, irreversibility of decision, and effective implementation

24. Strategic goals should be:

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• Simple
• Consistent
• Long term 3 / 4

*d. All of the above

25. Appraising a firm’s resources consists of:

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• Protecting the firm from its weaknesses and trying to reduce or eliminate them
• Leveraging the firm’s strengths to increase market share and profit

*c. Being very realistic yet creative about what can be achieved with what you've got

• Completing 360-degree analytical evaluations of top managers’ strengths and weaknesses

26. The success of an organization in general, depends on the following:

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• Being consistently focused on an achievable goal
• Having a strong and in-depth knowledge of the competitive environment
• Realistic appraisal of its own strengths and weaknesses

*d. All of the above plus the ability to implement strategy with commitment, consistency and determination

• Modern strategy applied to the business world shares with military strategy:

@Pages and References: Page 8

• Only linguistic roots
• Some authors such as Sun Tzu and his “Art of War”
• The existence of resources, conflict, and battle between players

*d. Decisions of significance to overall success, and major resource commitment

• In the military field, we generally make the following distinction between strategy and tactics:

@Pages and References: Pages 8

• Tactics are the overall plan whereas strategy focuses on specific actions

*b. Tactics are a scheme of specific everyday actions, practices and techniques whereas strategy relates to the top-level plan

• Tactics encompass specific political actions within the firm whereas strategy is the overall plan for

deploying resources to establish a favourable position

• Tactics are the overall plan whereas strategy is concerned with the manoeuvres to win battles

29. Strategy and tactics:

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• Are interchangeable terms

*b. Relate to achievement of overall long-term objectives, and multiple short-term objectives, respectively

• Can be seen as what top managers do and what lower level employees do, respectively
• None of the above

• Corporate strategy and business strategy

@Pages and References: Pages 9-12

• Are interchangeable terms
• Relate to achievement of overall long-term objectives, and multiple short-term objectives,

respectively

• Can be seen as what top managers do and what lower level employees do, respectively
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