Fred r david – strategic management, 13th edition ch11

Adequate, timely feedback is important to effective strategy evaluation... Strategy evaluation should have a long-run focus and avoid a short-run focus... Regardless of the size of the o

Name _

TRUE/FALSE Write 'T' if the statement is true and 'F' if the statement is false

1)

Most strategists believe that an organization's wellbeing depends on evaluation of the management process

strategic-1)

_

2)

Adequate, timely feedback is important to effective strategy evaluation 2)

_

3)

Too much emphasis on evaluating strategies may be expensive and counterproductive 3)

_

4)

Strategy evaluation should have a long-run focus and avoid a short-run focus 4)

_

5)

According to Richard Rumelt, consonance and consistency are based on a firm's external assessment 5)

_

6)

According to Rumelt, consistency and feasibility are largely based on a firm's internal assessment 6)

_

7)

Consistency, distinctiveness, advantage and feasibility are Richard Rumelt's four criteria for evaluating a strategy

7)

_

8)

Strategy evaluation is becoming increasingly easier with the passage of time, given the technological advances

8)

_

9)

The decreasing time span for which planning can be done with any degree of certainty is a reason why strategy evaluation is more difficult today

9)

_

10)

Strategies may be inconsistent if policy problems and issues continue to be brought to the top for resolution

10)

11)

Competitive advantages are normally the result of superiority in one of three areas feasibility, consistency,

or consonance

11)

12)

Regardless of the size of the organization, a certain amount of management by wandering around at all levels is essential to effective strategy evaluation

12)

13)

Because large companies have more at stake, it is more important for them to conduct strategy evaluationthan it is for small companies

13)

14)

The end of the fiscal year is the best time to do a strategy evaluation 14)

15)

Changes in the organization's management, marketing, finance, R&D and CIS strengths and weaknesses should all be the focus of a revised EFE matrix in strategy evaluation

15)

16)

In strategy evaluation, a revised IFE matrix should indicate how effective a firm's strategies have been in response to key opportunities and threats

16)

17)

Strengths, weaknesses, opportunities and threats should continually be monitored for change, because it isless a question of whether these factors will change but rather when they will change and in what ways 17)

18)

When taking corrective action, you need to compare expected results to actual results 18)

19)

Criteria for evaluating strategies should be measurable and easily verifiable 19)

20)

Specific financial ratios are rarely used criteria to evaluate strategies 20)

21)

Measuring organizational performance includes comparing expected results to actual results, investigating deviations from plans, evaluating individual performance and examining progress being made toward meeting stated objectives

21)

22)

Intuitive judgments are almost always involved in deriving quantitative criteria 22)

23)

Most quantitative evaluation criteria are geared to long-term objectives rather than annual objectives 23)

24)

Measuring organizational performance requires making changes to reposition a firm competitively for the future

24)

25)

Taking corrective action does not necessarily mean that existing strategies will be abandoned, or even thatnew strategies must be formulated

25)

26)

Corrective action in strategy evaluation is necessary to keep an organization on track toward achieving stated objectives

26)

27)

In his books entitled Future Shock and The Third Wave, Alvin Toffler argued that environments are

becoming so dynamic and complex that they threaten people and organizations with future shock 27)

28)

Future shock occurs when the type and speed of changes overpower an individual or organization's ability and capacity to adapt

28)

29)

According to research, participation in strategy-evaluation activities is one of the best ways to overcome individuals' resistance to change

29)

30)

The basic form of a Balanced Scorecard is the same for all organizations and industries 30)

31)

The Balanced Scorecard approach deals with the question, "How satisfied are the firm's customers." 31)

32)

Strategy-evaluation activities must be meaningful, that is, they should specifically relate to a firm's objectives

32)

33)

Timely approximate information is generally more desirable as a basis for strategy evaluation than accurate information that does not depict the present

33)

34)

The test of an effective evaluation system is its usefulness and complexity 34)

35)

Small organizations require a more elaborate and detailed strategy-evaluation system because they are still evolving

35)

36)

There is no one ideal strategy-evaluation system for all organizations 36)

37)

Contingency plans are alternative plans that can be put into effect if certain key events do not occur as expected

37)

38)

Organizations should prepare contingency plans only for unfavorable events 38)

39)

Strategies should try to cover all bases by planning for all possible contingencies 39)

40)

Contingency plans should be as simple as possible 40)

41)

Alternative strategies not selected for implementation should be discarded, as they have a tendency to contaminate the contingency plans

41)

42)

Identifying both beneficial and unfavorable events that could possibly derail the strategy or strategies is the first step of effective contingency planning

42)

43)

Independent auditors, government auditors and IRS auditors are the three groups of people who perform audits

43)

44)

Independent auditors are basically CPAs who provide their services to organizations for a fee 44)

45)

Public accounting firms usually avoid strategy evaluation services 45)

46)

The Middle East is considered to be one of the regions most vulnerable to climate change impact because

of its water scarcity

46)

47)

Arab countries in sub-Saharan Africa are particularly vulnerable to the risk of environmental changes due

to global warming

47)

48)

Public accounting firms, especially foreign ones operating mostly in the GCC area, often have a consulting arm that provides strategy-evaluation services

48)

49)

Moving environmental affairs from the line side of the organization to the staff side is required when instituting an environmental audit

49)

50)

The strategic management process should be completely open because participation and openness enhance understanding, commitment, and communication within the firm

50)

51)

Increased education and diversity of the workforce at all levels are reasons why the top-down approach should be favored in organizations

Which of these is/are a basic activity of strategy evaluation? 52)

A)

both B and C

B)

Taking corrective actions

C)

Reviewing the underlying internal and external factors that represent the bases of current strategies

D)

all of the above

E)

Measuring organizational performance 53)

The purpose of strategy evaluation is to 53)

A)

alert management to problems or potential problems

B)

increase the budget annually

C)

evaluate employees' performance

D)

make budget changes

E)

improve R&D programs 54)

What is the cornerstone of effective strategy evaluation? 54)

A)

Quality and quantity of managers

B)

Adequate and timely feedback

C)

Evaluation preceding implementation stage

D)

Smaller ratio of top- to lower-level management

E)

Taking corrective actions 55)

All of these are Richard Rumelt's criteria to evaluate a strategy except

55)

A)

consistency

B)

consonance

C)

distinctiveness

D)

feasibility

E)

advantage 56)

What is happening to strategy evaluation with the passage of time? 56)

A)

It is becoming increasingly difficult

B)

It is becoming an unnecessary activity

C)

It is becoming less important

D)

It is becoming very convenient

E)

It is becoming much simpler 57)

All of the following are reasons strategy evaluation is more difficult today except

57)

A)

the rapid rate of obsolescence of even the best plans

B)

the decreasing difficulty of predicting the future with accuracy

C)

the increasing number of variables

D)

a dramatic increase in the environment's complexity

E)

the increase in the number of both domestic and world events affecting organizations 58)

Which of the following is not a reason for the increasing difficulty of evaluating strategies?

58)

A)

Product development cycles are longer than ever

B)

Product life cycles are longer today than ever

C)

Domestic and world economies are less stable than ever

D)

Change is occurring more frequently than ever

E)

Technological advancement is more rapid 59)

Which of the following is important because organizations face dynamic environments in which key external and internal factors often change quickly and dramatically?

59)

A)

Strategy implementation

B)

Strategy evaluation

C)

Strategy formulation

D)

Strategy simplification

E)

Strategy modification 60)

A final broad test of strategy is its 60)

A)

consistency

B)

feasibility

C)

distinctiveness

D)

consonance

E)

advantage 61)

Competitive advantage normally is the result of superiority in resources, skills and 61)

A)

position

B)

feasibility

C)

employees

D)

governance

E)

consistency 62)

What term refers to the need for strategists to examine sets of trends, as well as individual trends in evaluating strategies?

62)

A)

Synergy

B)

Feasibility

C)

Consistency

D)

Advantage

E)

Coherence 63)

In evaluating strategies, which one of Rumelt's criteria for evaluating strategies refers to the need for strategists to examine sets of trends?

63)

A)

Advantage

B)

Consistency

C)

Coherence

D)

Empowerment

E)

Feasibility 64)

If success for one organizational department means failure for another department, then strategies may

be

64)

A)

inconsistent

B)

advantageous

C)

inconsonant

D)

failures

E)

synergistic 65)

When empowered employees are held accountable for and pressured to achieve specific goals and are given wide latitude in their actions to achieve them, there can be

65)

A)

increased productivity

B)

a decreased number of complaints

C)

dysfunctional behavior

D)

a decreased turnover

E)

an increased number of litigations 66)

Strategy-evaluation activities should be performed 66)

A)

on a periodic basis

B)

at the onset of a problem

C)

on a continuous basis

D)

every two years

E)

upon completion of major projects 67)

Corrective actions are not needed when

67)

A)

the industry is slowing down

B)

competitive factors are on the rise

C)

the firm is not progressing satisfactorily toward achieving stated objectives

D)

external and internal factors have not significantly changed

E)

changes have occurred in the firm's internal strategic position 68)

When you discover major changes have occurred in the firm's internal strategic position while conducting strategy evaluation, you should

68)

A)

immediately discontinue all aspects of the present strategic course

B)

copy the actions of major competitors

C)

add additional funds to the present strategic plan

D)

continue on the present strategic course

E)

take corrective actions 69)

Changes in the organization's management, marketing, finance/accounting, R&D and CIS strengths and weaknesses should be the focus of a revised

69)

A)

EFE matrix

B)

vision

C)

IFE matrix

D)

mission

E)

EPM matrix 70)

A revised should indicate how effective a firm's strategies have been in response to key opportunities and threats

70)

A)

IFE matrix

B)

mission

C)

vision

D)

EFE matrix

E)

CPM matrix 71)

Which of the following is not included in measuring organizational performance? 71)

A)

Comparing results to competitors' expectations

B)

Investigating deviations from plans

C)

Comparing expected results to actual results

D)

Examining progress being made toward meeting stated objectives

E)

Evaluating individual performance 72)

Ineffectiveness and/or inefficiencies indicate the need for 72)

A)

reductions in pay

B)

more synergy

C)

layoffs

D)

some form of corrective action

E)

consultants 73)

What is the basis for quantitative financial evaluation? 73)

A)

Financial ratios

B)

Present value analysis

C)

The EPS/EBIT Analysis

D)

Capital Asset Pricing Model

E)

Reduction in costs 74)

Which of these is not a key financial ratio? 74)

A)

Market share

B)

Asset growth

C)

Earnings per share

D)

Return on equity

E)

Production quality 75)

Strategy evaluation is based on 75)

A)

qualitative criteria

B)

qualitative and quantitative criteria

C)

intuition

D)

empirical data

E)

objective data 76)

Financial ratios are used to compare a firm's performance over different time periods, compare the firm's performance to industry averages, and compare a firm's performance with

76)

A)

the performance of competitors

B)

overall business standards

C)

the performance of international firms

D)

the performance of suppliers

E)

non-financial ratios 77)

Most quantitative criteria are geared to objectives rather than objectives 77)

A)

annual; long-term

B)

top-management; employee

C)

environmental; community

D)

short-term; annual

E)

profit; social 78)

What corrective actions should a firm take during strategy evaluation? 78)

A)

Revising the business mission

B)

Revising objectives

C)

Issuing stock

D)

Selling a division

E)

all of the above 79)

What occurs when the nature, types and speed of changes overpower an individual's or organization's ability and capacity to adapt?

79)

A)

Corrective actions

B)

Measuring performance

C)

Corporate agility

D)

Future shock

E)

Corporate downfall 80)

Corrective actions should 80)

A)

strengthen an organization's competitive position in its industry

B)

involve abandoning existing strategies

C)

reduce the staff size

D)

streamline asset holdings

E)

all of the above 81)

What is the best way to overcome individuals' resistance to change in strategy evaluation? 81)

A)

Participation

B)

Command-and-control

C)

Laissez-faire

D)

Emotional reactions

E)

Rational argument 82)

An organization's ability to adapt successfully to changing circumstances refers to its 82)

A)

dynamism

B)

corporate agility

C)

future shock

D)

revision power

E)

liquidity 83)

Corrective action should do all of the following except

83)

A)

capitalize upon internal strengths

B)

avoid external opportunities

C)

avoid external threats

D)

strengthen an organization's competitive position

E)

improve internal weaknesses 84)

Which of the following is not a component of the Balanced Scorecard?

84)

A)

Internal business processes

B)

Customer knowledge

C)

Financial performance

D)

Learning and growth

E)

Social responsibility 85)

What aims to balance long term with short term concerns, financial with non-financial concerns, and internal with external concerns?

85)

A)