The correct answer for each question is indicated by a .

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1 CORRECTWhich one of the following is not an integral part of the managerial process of crafting and executing strategy?

A)Developing a strategic vision, a mission statement and core values.

B)Choosing a strategic intent.

C)Setting objectives.

D)Crafting a strategy

E)Monitoring developments, evaluating performance, and initiating corrective adjustments.

2 CORRECTA strategic vision for a company

A)involves how fast to pursue the chosen strategy and reach the targeted levels of performance.

B)consists of thinking through what it will take to make the chosen strategy work as planned.

C)provides a panoramic view of "where we are going" and a convincing rationale for why this makes good business sense for the company

D)spells out how the company is going to get from where it is now to where it wants to go and when it is expected to arrive.

E)concerns management's view of how to transition the company's business model from where it is now to where it needs to be.

3 CORRECTWhich of the following statements about a company's values is false?

A)Company values are the beliefs, traits, and behavioral norms that management has determined should guide the pursuit of its vision and mission

B)In companies with long-standing values that are deeply entrenched in the corporate culture, senior managers are careful to craft a vision, mission, and strategy that match established values, and they reiterate how the value-based behavioral norms contribute to the company's business success. If the company changes to a different vision or strategy, executives take care to explain how and why the core values continue to be relevant.

C)A company's core values can relate to such things as fair treatment, integrity, ethical behavior, innovativeness, teamwork, top-notch quality, superior customer service, social responsibility, and community citizenship.

D)At values-driven companies, executives "walk the talk" and company personnel are held accountable for embodying the stated values in their behavior.

E)At all but a few companies, the stated values are mostly window-dressing and serve mainly to embellish the company's public image.

4 CORRECTMost boards of directors have a compensation committee, composed entirely of ________________________, to develop a salary and incentive compensation plan that rewards senior executives for boosting the company's _______________ performance and growing the economic value of the enterprise on behalf of shareholders.

A)outside directors; long-term

B)shareholders; stock

C)inside directors; short-term

D)outside directors; quantitative

E)Independent experts; overall

5 CORRECTWhich of the following represents the best example of a well-stated strategic objective (as opposed to a well-stated financial objective)?

A)Achieve revenue growth of 10% annually

B)Increase market share from 17% to 22% and achieve the lowest overall costs of any producer in the industry, both within three years

C)Invest more money in R&D to enable the company to offer customers the widest selection of products in the industry

D)Achieve a AA bond rating within 2 years and an annual cash flow of $500 million

E)Pay more attention to reducing costs by half of the current level over the next few years

6 CORRECTWhich of the following statements about objectives is false?

A)A company's managers are well-advised to give the achievement of financial objectives a much higher priority than the achievement of strategic objectives.

B)The managerial purpose of setting objectives is to convert the vision and mission into specific performance targets.

C)A "balanced scorecard" for measuring company performance views financial performance measures as lagging indicators that reflect the results of past decisions and organizational activities and views strategic performance measures as leading indicators of a company's future financial performance

D)Objectives serve as yardsticks for tracking a company's performance and progress, and (3) they motivate employees to expend greater effort and perform at a high level.

E)The best ways to promote outstanding company performance is for managers to deliberately set performance targets high enough to stretch an organization to perform at its full potential and deliver the best possible results

7 CORRECTA balanced scorecard for measuring company performance

A)entails balancing the pursuit of good bottom-line profit against the pursuit of non-profit objectives (although achieving profitability targets is nearly always given greater emphasis).

B)involves putting equal emphasis on the achievement of financial objectives, strategic objectives, and social responsibility objectives.

C)entails setting both financial and strategic objectives and putting balanced emphasis on their achievement.

D)helps prevent the pursuit of strategic objectives from dominating the pursuit of financial objectives.

E)is necessary in order to prevent the drive for achieving financial objectives from weakening the attention paid to social responsibility, community citizenship, and other worthy goals.

8 CORRECTThe task of crafting a strategy is

A)the function and responsibility of a few high-level executives.

B)more of a collaborative group effort that involves all managers and sometimes key employees striving to arrive at a consensus on what the overall best strategy should be.

C)the function and responsibility of a company's strategic planning staff.

D)is a collaborative team effort in which every manager has a role for the area he or she heads; it is rarely something that only high-level managers do.

E)first and foremost the function and responsibility of a company's board of directors.

9 CORRECTThe strategy-making hierarchy in a single business company consists of

A)business strategy, divisional strategies, and departmental strategies.

B)business strategy, functional-area strategies, and operating strategies.

C)business strategy and operating strategy.

D)managerial strategy, business strategy, and divisional strategies.

E)corporate strategy, divisional strategies, and departmental strategies (whereas in a diversified company it consists of corporate strategy, divisional strategy and operating strategy).

10 CORRECTWhich one of the following is not among the chief duties/responsibilities of a company's board of directors insofar as the strategy-making, strategy-executing process is concerned?

A)Direct senior executives as to what the company's long-term direction, objectives, business model, and strategy should be and, further, closely supervise senior executives in their efforts to implement and execute the strategy

B)Oversee the company's financial accounting and financial reporting practices.

C)Evaluating the caliber of the CEO's strategy-making/strategy-executing skills and of other senior executives, since the board must elect a successor when the incumbent CEO steps down, either going with an insider or deciding that an outsider is needed

D)Critically appraise the company's direction, strategy, and business approaches

E)Institute a compensation plan for top executives that rewards them for actions and results that serve shareholder interests.

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