Business Strategies 1-3

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Groups or individuals who can significantly affect an organization’s activities are called
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stakeholders
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Strategic management is a process where organizations analyze and learn from the
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internal and external environment
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Compared to the strategic management process strategic thinking is
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flexible
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Which strategic management perspective relies on an economic view of the firm?
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traditional
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The perspective that the most successful organization will be the one that best adapts to existing forces is called
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environmental determinism
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The perspective that firms can influence their environments is called
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enactment
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Which approach to strategic management consists of analyzing the internal and external environments of a company to arrive at organizational strengths, weaknesses, opportunities and threats?
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The traditional approach
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The resource-based approach to strategic management theorizes that firms can gain competitive advantage by possessing
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superior resources
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An emergent strategy is
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one that is not planned or intended
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The resources of a firm include all of the following except
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industry
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Most of the resources that firms can acquire are directly linked to a company’s
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stakeholders financial strength
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What is typically the first step in the strategic management process?
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situation analysis
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The approach to strategic management that envisions the firm at the center of a network of constituencies is know as the
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stakeholder approach
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Management theory in the United States historically has focused on
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internal stakeholders
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What defines the purposes for which a company exists and operates?
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strategic direction
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Which of the following expresses what the organization wants to be in the future?
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The vision statement
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How many different levels of strategy formulation are there?
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Three
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Defining a company’s domain for activity by selecting business areas in which the company will compete is called
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corporate-level strategy formulation
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Determining how business should compete in the areas they have selected is called
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business-level strategy formulation
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Developing the details of how resource areas should be used to implement competitive strategies and achieve competitive advantage is
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functional-level strategy formulation
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Managing stakeholder relationships and organizational resources in a manner that moves business toward the successful execution of its strategies, consistent with its strategic direction is
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strategy implemention
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The four processes associated with strategic management include all of the following except
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strategy insight
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The analytical process aimed at carrying out strategies that have already been identified is
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strategic planning
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Industry revolutionaries are
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firms that invent new business concepts
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The intuitive, creative process that synthesizes stimuli from the environment to create “an integrated perspective of the enterprise” is known as
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strategic thinking
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Strategic intent is similar to the concept of
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strategic vision
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Elements of strategic thinking include all of the following except
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resource based view
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One’s view of how the world works is often referred to as
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a mental model
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A mental model should include
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an understanding of both the internal and external organization
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Thinking in time refers to
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recognizing that the past, present, and future are all relevant to making good strategic decisions
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The means to encourage strategic thinking include all the following except
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demoting or firing those employees who do not demonstrate strategic thinking
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The travel and tourism industry is composed of
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traditional hospitality businesses and a broad range of businesses
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Forces that are outside the traditional boundaries of the firm are called
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the external environment
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The external environment can divided into these two smaller categories
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the broad environment and the operating environment
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The context in which the firm exists is called the
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the operating environment
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Sociocultural environments have meaning because
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well-educated people find them meaningful
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Influences and trends associated with domestic or global economies are called the
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economic environment
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Organizations should consider forecasts of economic growth in determining when to
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make critical resource allocation decisions
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A major source of economic uncertainty for global organizations is
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foreign exchange rates
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The _________ is among the most significant determinant of organizational success, both at home and abroad.
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political environment
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When an innovation has an impact on more than on industry it is preferred to as a
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basic innovation
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Major innovations that influence more than one business or industry are referred to as
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radical innovations
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Which environment consists of stakeholders with whom organizations interact on a regular basis
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the operating environment
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Economic power that allows a firm or group of firms to influence the nature of business arrangements is commonly referred to as
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bargaining power
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All of the following characteristics make “customers” in the five forces model strong except when
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the products they are buying are differentiated
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A firm that is involved in more than one stage of the industry supply chain is considered to be
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vertically integrated
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Suppliers in the five forces model are powerful when the following characteristics are present except when they
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sell products and services that can be substituted with other products and services
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Costs associated with leaving a business or industries are commonly referred to as
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exit barriers
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Which of the following industry characteristics leads to greater rivalry?
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A slow growth industry
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An industry in which one firm is the only significant provider of a good or service is called a
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monopoly
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An industry characterized by the existence of a few very large firms is called an
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oligopoly
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Forces that keep new competitors out and provide a level of protection for existing competitors are called
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entry barriers
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Cost savings that occur when it is more efficient to produce a product in a large facility at a higher volume are
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economies of scale
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Costs associated with starting a business are
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capital requirements
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Attributes associated with a product or service that cause customers to prefer it rather than competing products or services are
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product/service differentiation
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Entry barriers are caused by all of the following except
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low switching costs
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Resources that are possessed by industry participants but are difficult or impossible to completely duplicate are
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inimitable resources
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Substitute products form a
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ceiling on prices
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The interest that a group takes in assuring that an organization behaves in a manner that is socially responsible is referred to as a
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social stake
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Having a legal right to make decisions for some part of the company is referred to as a
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formal power
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Techniques that firms use to win market share and increase revenues and profits are
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competitive tactics
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The best example which illustrates the competitive force of substitute products is
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Coca-cola for Pepsi
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A group of firms oriented towards problem solving and technology development is referred to as a
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consortia
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What is the primary advantage of interlocking directorates
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The potential to draw resources from other firms to achieve stability
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The bargaining power of suppliers is great when
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one or more suppliers pose a credible threat of moving into the business of the buyer
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The mission, vision and values statement of the Mandarin Oriental Hotel Group is an excellent example of the major components of
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strategic direction
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The central components of strategic direction are
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vision, definition and values
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Strategic direction is established and communicated through tools including all of those below except
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formal strategic plans
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The power of various stakeholders is impacted by all of the following except
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profitability power
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The term for forces at work to maintain the status quo is
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structural intertia
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One of the most common means to communicate strategic direction is in the
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written mission statement
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As organizations are founded
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they often have mission statements that are simple and not written down
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The first step in creating a clear sense of mission is to
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define the business
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Typically, the first step in creating a clear sense of mission is to
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understand the nature of the business
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Marriott’s International mission statement
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is broadly defined
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An organization with a vision has
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a sense of what it wants to be in the future
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The component parts of social responsibility include all of the following except
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personal survival responsibility
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Firms that pursue social responsibility are
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no significant difference in performance from firms with less social responsibility
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Enterprise strategy refers to
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the combining of ethical and strategic thinking in firms
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The Universalist theory of ethics
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focuses of the intent of the decision
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The utilitarian theory of ethics
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focuses of the outcome of the decision
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The economic theory of ethics
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views the purpose of business organizations is to maximize profits
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Examining ethics around the world
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there can be significant differences among workers in different parts of the world
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As organizations grow larger and internationalize
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tend to adopt values that are friendlier to a wider set of international constituents
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A code of ethics is concerned with
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communicating values to employees and other stakeholders
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Which of the following sentences is true?
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“Ethical” is pertaining to what is right or wrong
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Ethical consonance
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what we believe matches our behavior
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A proactive manager is
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listening empathetically to employees in order to take care of their needs.
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A proactive manager is
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listening empathetically to employees in order to take care of their needs.

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