David_TIF_Ch01 - 255 CHAPTER 1 The Nature of Strategic...

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CHAPTER 1 The Nature of Strategic Management True/False Introduction 1. The underpinnings of strategic management hinge on managers gaining an understanding of competitors, markets, prices, suppliers, distributors, governments, creditors, shareholders and customers worldwide. Ans: T Page: 4 2. Although the Internet has increased in popularity, it has actually led to increases in company expenses. Ans: F Page 4 3. Consumer e-commerce is five times greater than business-to-business e-commerce. Ans: F Page 4 What Is Strategic Management? 4. Optimizing for tomorrow the trends of today is the purpose of strategic management. Ans: F Page: 5 5. Even though useful, strategic planning has been cast aside by corporate America since the early 1990s. Ans: F Page: 5 6. Resource allocation is included in strategy-formulation activities. Ans: T Page: 5 7. The terms strategic management and strategy implementation are synonymous. Ans: F Page: 5 255
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8. A vision statement is, in essence, a company’s game plan. Ans: F Page: 5 9. Strategy implementation is often considered to be the most difficult stage in the strategic-management process because it requires personal discipline, commitment and sacrifice. Ans: T Page: 6 10. The final stage in strategic management is strategy implementation. Ans: F Page 6 11. Strategy formulation, implementation and evaluation activities occur at three hierarchical levels in a large diversified organization: corporate, divisional and functional. Ans: T Page: 6 12. One of the fundamental strategy evaluation activities is reviewing external and internal factors that are the bases for current strategies. Ans: T Page: 6 13. An objective, logical, systematic approach for making major decisions in an organization is a way to describe the strategic-management process. Ans: T Page: 7 14. Strategic management is an attempt to organize qualitative and quantitative information in a way that allows effective decisions to be made under conditions of uncertainty. Ans: T Page: 7 15. Analytical and intuitive thinking should complement each other. Ans: T Page: 7 16. According to Albert Einstein, “Knowledge is far more important than intuition.” Ans: F Page 7 256
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17. Management by intuition can be defined as operating from the “I’ve-already-made- up-my-mind-don’t-bother- me-with-the-facts mode.” Ans: F Page 7 18. By monitoring external events, companies should be able to identify when change is required. Ans: F Page: 8 Key Terms in Strategic Management 19. Anything the firm does especially well compared to rival firms could be considered a competitive advantage. Ans: T Page 8 20. Once a firm acquires a competitive advantage, they are usually able to sustain the competitive advantage for an extended period of time. Ans: F
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David_TIF_Ch01 - 255 CHAPTER 1 The Nature of Strategic...

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