Chapter 2 Quiz + Answers Essay

1. When companies adopt the strategy-making and strategy execution process it requires they start by developing a strategic vision, mission and values 2. The strategic management process is shaped by external factors such as the industry’s economic and competitive conditions and internal factors such as the company’s collection of resources and capabilities 3. When a company is confronted with significant industry change that mandates radical revision of its strategic course, the company is said to have encountered a strategic inflection point 4. A company’s strategic plan consists of a vision of where it is headed, a set of performance targets, and a strategy to achieve them 5. Top management’s views about where the company is headed and what its future product-customer-market-technology will be constitutes the strategic vision for the company 6. Well-conceived visions are distinctive specific to a particular organization free of generic, feel-good statements not innocuous one-sentence statements All of these 7. Effectively communicating the strategic vision down the line to lower-level managers and employees has the value of  not only explaining â€Å"where we are going and why† but, more importantly, also inspiring and energizing company personnel to unite to get the company moving in the intended direction 8. A company’s mission statement typically addresses which of the following questions Who we are, what we do, and why we are here 9. A company’s values relate to such things as  fair treatment, integrity, ethical behavior, innovativeness, teamwork, top-notch quality, superior customer service, social responsibility, and community citizenship 10. The managerial purpose of setting objectives includes  converting the strategic vision into specific performance targets  using the objectives as yardsticks for tracking the company’s progress and performance  challenging the organization to perform at its full potential and deliver the best possible results  establishing deadlines for achieving performance results 11. A company needs financial objectives  because without adequate profitability and financial strength, the company’s ultimate survival is jeopardized 12. Strategic objectives  relate to strengthening a company’s overall market standing and competitive vitality 13. A balanced scorecard for measuring company performance entails striking a balance between financial objectives and strategic objectives 14. A balanced scorecard that includes both strategic and financial performance targets is a conceptually strong approach for judging a company’s overall performance because financial performance measures are lagging indicators that reflect the results of past decisions and organizational activities whereas strategic performance measures are leading indicators of a company’s future financial performance 15. A company needs performance targets or objectives for its operations as a whole and also for each of its separate businesses, product lines, functional departments, and individual work units 16. Business strategy concerns ensuring consistency in strategic approach among the businesses of a diversified company 17. In a single-business company, the strategy-making hierarchy consists of business strategy, functional strategies, and operating strategies 18. Functional strategies concern the actions, approaches, and practices related to particular functions or processes within a business 19. Operating strategies concern the relatively narrow strategic initiatives and approaches for managing key operating units within a business and for performing strategically significant operating tasks 20. Management is obligated to monitor new external developments, evaluate the company’s progress, and make corrective adjustments in order to decide whether to continue or change the company’s strategic vision, objectives, strategy and/or strategy execution methods