TRUE/FALSE

1 : If no two organizations are the same, then logically all organizational strategies are unique.
A : true
B : false

Correct Answer : A

2 : A company can have one corporate strategy but many business strategies.
A : true
B : false

Correct Answer : A

3 : When a company can no longer pay its creditors, the company may file for bankruptcy.
A : true
B : false

Correct Answer : A

4 : A vision statement would answer the questions “Who are we?” and “Why are we here?”
A : true
B : false

Correct Answer : B

5 : To be successful, a company must adopt only one corporate strategy.

A : true
B : false

Correct Answer : B

6 : The decision to merge with another company is an example of a growth strategy.

A : true
B : false

Correct Answer : A

7 : If an organization decides that the company is an ideal size and decides to maintain it, then
the organization is adopting a growth strategy.
A : true
B : false

Correct Answer : A

8 : Strategic intent is an intangible corporate goal.

A : true
B : false

Correct Answer : B

9 : Porter’s model of business strategy has been criticized for having categories that overlap.

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A : true
B : false

Correct Answer : A

10 : There are three competitive positions used in most strategy textbooks: cost, differentiation,
and flexibility.
A : true
B : false

Correct Answer : B

11 : The question, “Should we be in business?” is an example of a business strategy.

A : true
B : false

Correct Answer : B

12 : The strategic planning process is dynamic and evolves as environmental conditions

change.
A : true
B : false

Correct Answer : A

13 : Examples of corporate strategy include decisions to compete internationally or to merge

with other companies.
A : true
B : false

Correct Answer : A

14 : A discarded strategy is one that was found to be inappropriate because of changing

circumstances.
A : true
B : false

Correct Answer : A

15 : In general, a restructuring strategy is one that deals with companies that are operating at a
surplus and are typically described as “money-making.”
A : true
B : false

Correct Answer : B

16 : Values guide the behaviour of individuals within an organization.

A : true
B : false

Correct Answer : A

17 : Hard objectives deal with social issues such as the ethics and values of an organization.
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A : true
B : false

Correct Answer : B

18 : A “harvest” strategy can also be conceptualized as a “retrenchment” strategy because the

goal is to restructure and not grow.
A : true
B : false

Correct Answer : A

19 : Emergent strategy is the plan that changes incrementally due to environmental changes.
A : true
B : false

Correct Answer : A

20 : An acquisition is seen as two organizations joining to gain economies of scale, whereas a

merger occurs when one company acquires another.
A : true
B : false

Correct Answer : B

21 : Dynamic capabilities are the abilities of an organization to adapt and renew its
competencies in accordance with a changing business environment.
A : true
B : false

Correct Answer : A

22 : Competitive advantage of an organization includes the characteristics that enable it to earn

higher rates of interest on its investments than its competitors.
A : true
B : false

Correct Answer : B

23 : Opportunities and threats are environmental conditions external to the firm that have limited
benefit and are harmful to the organization.
A : true
B : false

Correct Answer : B

24 : “Core competencies” refers to the integrated knowledge sets within an organization that
distinguish it from its competitors and deliver value to customers.
A : true
B : false

Correct Answer : A

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25 : SWOT analysis refers to the systematic and regular monitoring of environmental factors
influencing the organization.
A : true
B : false

Correct Answer : A

26 : Establishing the mission, vision, and values is the first step in strategic planning.
A : true
B : false

Correct Answer : A

27 : Examples of tangible assets are human capital, reputation, goodwill, trust, and copyright.
A : true
B : false

Correct Answer : A

28 : Business strategies are concerned with the long-term view of the organization.
A : true
B : false

Correct Answer : B

29 : A strategy is a planned process whereby organizations can map out a set of objectives and
methods of meeting those objectives.
A : true
B : false

Correct Answer : A

30 : Corporate strategies focus on one line of business: building a strong competitive position.
A : true
B : false

Correct Answer : B

SHORT RESPONSE
31 : What is a corporate strategy? Identify the three major corporate or organization-wide
strategies outlined by the authors in your textbook and discussed in class and provide examples
of each.

Correct Answer : Corporate Strategies are focused on overall strategy for the company and its
businesses or interests. These strategies are usually focused on long-term growth and survival
goals.There are three corporate strategy options:? Restructuring (turnaround, divestiture,
liquidation, bankruptcy)? Growth (incremental growth, international growth, mergers and
acquisitions)? Stability (maintain the status quo)

32 : Compare and contrast corporate and business strategy. What is the difference between the

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two?

Correct Answer : Business strategy focuses on one line of business as opposed to the overall
corporation. Business strategy involves building a strong competitive position as opposed to
determining if this is the business to be in. Business strategy is an action plan for managing one
line of business. Corporate strategy asks, “Should we be in business? What business should
we be in?” Business strategy asks, “How should we compete? Should we compete by offering
products at prices lower than those of the competition or by offering the best service?”

33 : List the steps (from initial planning to end stages) in strategic planning.

Correct Answer : ? Establish the mission, vision, and values? Develop objectives? Analyze the
external environment? Identify the competitive advantage? Determine the competitive position?
Implement the strategy? Evaluate the performance

34 : What are some of the benefits of strategy formulation to organizations? Identify and briefly
describe five benefits.

Correct Answer : ? Clarity – to help focus and guide decision-making about resource
allocations? Coordination – everyone working together towards the same goals? Efficiency –
daily decision-making guided toward the question “does it fit our strategy?”? Incentives –
employees understanding the behaviours and performance that will be rewarded? Change – if
major change is under consideration, then understanding current strategy is essential? Career
development – clear outline of organization’s strategy can help you decide if you want to work
for the company, if there is a skills fit, and what training and development you will need in order
to facilitate the achievement of strategy? Understanding of the strategic planning process is the
essential first step to creating an HR strategy that makes sense for the organization

35 : Compare and contrast the HRM practices of a company using a low-cost provider strategy
with one using a differentiation strategy.

Correct Answer : Low-cost providers provide a product or service at a price lower than that of its
competitors while appealing to a broad range of customers. A major emphasis with this type of
strategy is to reduce cost; therefore, contingent workers are recruited and paid minimal hourly
wages. There is a high turnover of staff and minimal on-the-job training. There are minimal
opportunities for career growth and advancement. Businesses using a differentiation strategy
seek to differentiate their products in ways that will appeal to a broad range of buyers. More
staff training may be required in businesses employing this type of strategy. There is more
emphasis on product knowledge and customer service. There may be more opportunities for
advancement in this type of business.

36 : Cupcasions is a small bakery that crafts and sells gourmet cupcakes and cakes. Besides
scanning and monitoring its external environment, the managers also consider what competitive
advantage the organization possesses—that is, what characteristics enable them to generate
more value for customers at a lower cost, thereby earning higher rates of profit than its
competitors. List the three categories of resources and describe one example of a resource that
Cupcasions would have that would allow them to perform more effectively or efficiently than its
competitors.

Correct Answer : Tangible assets: These are future economic resources that have substance
and form from which an organization will benefit. Examples are land, inventory, building,
location, cash, and technology.Intangible assets: These are future economic resources that
have been generated from past organizational events. These assets lack substance and form.
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Examples are human capital, reputation, goodwill, trust, and copyright.Capabilities: These are a
complex combination of people and processes that represent the firm’s capacity to exploit
resources to achieve the firm’s objectives. Examples are managerial capabilities, innovative
capabilities, marketing capabilities, and organizational cultures.

37 : According to the resource-based view, an organization’s sustained competitive advantage

must meet four criteria. List these four criteria.

Correct Answer : ? They are valuable to the firm’s strategy (they help generate value/reduce
cost).? They are rare (competitors don’t have them).? They are inimitable (they cannot easily
be copied by competitors).? They can be organized by the firm (the firm can exploit the
resources)

38 : With the information from external environment and internal competence

analysis,managers can summarize the conclusions using a SWOT analysis. What is a SWOT
analysis?

Correct Answer : A SWOT analysis is a tool for analyzing a company’s resource capabilities
and deficiencies, its market opportunities, and the external threats to its future. SWOT is an
acronym for Strengths, Weaknesses, Opportunities, and Threats. A strength is something that a
company does well or an attribute that makes it more competitive. A weakness is something
that an organization does poorly, or a condition, such as location, that puts it at a disadvantage
relative to competitors. Opportunities and threats are environmental conditions external to the
firm that may be beneficial or harmful.

39 : Describe one step in the strategic planning process. Identify an organization you are
familiar with (such as from your work experience or from the course textbook). Provide an
example of how your chosen organization performs the one strategic planning step.

Correct Answer : ? Establish the mission, vision, and values? Develop objectives? Analyze the
external environment? Identify the competitive advantage? Determine the competitive position?
Implement the strategy? Evaluate the performanceOne Step: Analyze the external environment.
To achieve the company’s objectives, managers must be aware of threats and opportunities in
the external environment. By scanning and monitoring technology, laws and regulations, the
economy, sociocultural factors, and changing demographics, managers can make reactive and
proactive changes to the strategic plan.

40 : Concepts of strategy are numerous. Describe two.

Correct Answer : Strategy: A declaration of intentStrategic intent: A tangible corporate goal; a

point of view about the competitive positions a company hopes to build over a decadeStrategic
planning: The systematic determination of goals and the plans to achieve themStrategy
formulation: The entire process of conceptualizing the mission of an organization, identifying the
strategy, and developing long-range performance goalsStrategy implementation: Those
activities that employees and managers of an organization undertake to enact the strategic plan
and achieve the performance goalsObjectives: The end, the goalsPlans: The product of
strategy, the means to the endStrategic plan: A written statement that outlines the future goals
of an organization, including long-term performance goalsPolicies: Broad guidelines to action
that establish the parameters or rules

41 : Are employees always an organization’s most valuable resource? Why or why not? What
criteria is required for organizations to achieve competitive advantage through their human
resources?
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Correct Answer : In order to determine whether an organization’s resources will contribute to
competitive advantage, four criteria must be satisfied. The resources must be:a. valuableb.
difficult to imitatec. rared. hard to substitute

42 : Refer to Scenario: Tentree Apparel. Tentree Apparel is an example of an organization that

is making strategic decisions in its attempts to become profitable. Describe two concepts of
strategy that Tentree Apparel is using.

Correct Answer : A few concepts include:Strategy: A declaration of intentStrategic intent: A

tangible corporate goal; a point of view about the competitive positions a company hopes to
build over a decadeStrategic planning: The systematic determination of goals and the plans to
achieve themStrategy formulation: The entire process of conceptualizing the mission of an
organization, identifying the strategy, and developing long-range performance goalsStrategy
implementation: Those activities that employees and managers of an organization undertake to
enact the strategic plan and achieve the performance goalsObjectives: The end, the
goalsPlans: The product of strategy, the means to the endStrategic plan: A written statement
that outlines the future goals of an organization, including long-term performance goalsPolicies:
Broad guidelines to action, which establish the parameters or rules

MULTIPLE CHOICE
43 : In order to achieve success implementing change, what two concepts do HR managers
need to match together?
A : motivation and hiring practices
B : position modules and salary theories
C : principles and salary theories
D : HRM practices and organizational goals

Correct Answer : D

44 : What type of strategy is an agreed-upon plan that is arrived at through formal planning
processes?
A : discarded
B : emergent
C : realized
D : intended

Correct Answer : D

45 : Managers in a department store have decided that the shoe department is not a profitable
part of the store and that it would be better suited to being an independent organization that
rented space from the store. What type of strategy is demonstrated if the shoe department is
separated from the department store into a separate entity?
A : merger
B : divestiture
C : bankruptcy
D : growth

Correct Answer : B

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46 : What type of corporate objective is represented by the ratio “return on investment?”
A : soft
B : short-term
C : long-term
D : hard

Correct Answer : D

47 : What are the two primary types of inputs that influence an organization’s competitive
advantage?
A : profitability and human capital
B : reputation and superior performance
C : culture and distinct advantage
D : capabilities and tangible assets

Correct Answer : D

48 : What type of competency is represented by resources and capabilities that serve as a

firm’s competitive advantage?
A : core
B : central
C : cultural
D : collective

Correct Answer : A

49 : Which of the following represents either a growth or a stability strategy?

A : merger
B : turnaround
C : bankruptcy
D : liquidation

Correct Answer : A

50 : If employees understand the behaviours and performance levels that will be rewarded on
the job, what type of benefit is produced that will help managers formulate a strategy?
A : clarity
B : incentives
C : change
D : efficiency

Correct Answer : B

51 : What is a tangible corporate goal that represents a point of view about the competitive
positions a company hopes to build over a decade?
A : strategic plan
B : strategic intent
C : strategic implementation
D : strategic formulation

Correct Answer : B

52 : If a formulated plan is called an intended strategy, what strategy depicts the implemented
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plan?
A : intentional
B : ideal
C : realized
D : predicted

Correct Answer : C

53 : If an organization fails to engage in strategic planning, it will be burdened by many

challenges. Which of the following is NOT one of these challenges?
A : failure to involve senior managers and executives so that there is no buy-in
B : failure to use the plan as the guide to make decisions and evaluate performance
C : failure to align incentives and other HR policies to the achievement of strategy
D : failure to incorporate information generated from 360-degree reviews

Correct Answer : D

54 : Which strategy is synonymous with logical incrementalism?

A : intended
B : emergent
C : discarded
D : realized

Correct Answer : B

55 : What strategic concept demonstrates those activities that employees and managers of an
organization undertake to enact the strategic plan and achieve the performance goals?
A : strategy implementation
B : strategy formulation
C : strategic planning
D : strategic intent

Correct Answer : A

56 : Which of the following represents a restructuring strategy?

A : merger
B : liquidation
C : incremental
D : joint venture

Correct Answer : B

57 : McDonald’s incorporated many unique strategies to turn the restaurant around. Which of
the following is part of a different restaurant’s corporate strategy?
A : focusing on healthy food choices
B : allowing free refills for all beverages
C : introducing new foods that reflected regional food interests
D : opening stores in non-traditional locations

Correct Answer : C

58 : If a firm is applying a growth strategy, it will typically be focused on certain HR practices.

Which of the following activities represent strategies that are NOT a growth strategy?
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A : reduced training
B : aggressive recruitment
C : rapidly rising wages
D : increased job creation

Correct Answer : A

59 : How is the successful implementation of strategy judged?

A : by whether it satisfies top management’s expectations
B : by whether it realizes organizational goals and objectives
C : by whether it engages employees to do their best
D : by whether it meets financial targets and ratios

Correct Answer : D

60 : Salad-O is a fast food outlet located in a shopping mall that tries to compete with Greens-
Away by offering gourmet salad dressings. Which of Porter’s competitive strategies is Salad-O
applying?
A : low-cost provider
B : broad differentiation
C : market niche with lower cost
D : market niche with differentiation

Correct Answer : B

61 : “Our company is committed to honesty and improving society.” What type of statement
does this quote describe?
A : attitude
B : policy
C : strategic
D : value

Correct Answer : D

62 : Some organizations drift aimlessly during times of economic turmoil. What might be a
concrete reason for an organization to be so unfocused?
A : The organization did not produce a vision statement to unite its employees.
B : The organization did not complete its long-term plan for the next three to five years.
C : The organization did not conduct a succession plan for its older managers.
D : The organization did not build a culture that supported work–life balance.

Correct Answer : A

63 : What is the process called that formulates organizational goals, objectives, action plans,
and the mission statement?
A : formulation
B : analysis
C : strategy
D : planning

Correct Answer : C

64 : According to your textbook, what are the three types of corporate strategies?
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A : liquidation, bankruptcy, and growth
B : mergers, acquisitions, and joint ventures
C : growth, restructuring, and stability
D : turnaround, bankruptcy, and divestiture

Correct Answer : C

65 : In order for senior managers to determine who the company’s customers are, where they
are located, and what product or service characteristics the customers value, the managers
must develop a statement of the fundamental benefits of the products or services being offered
in the marketplace. What is this statement known as?
A : value proposition
B : vision statement
C : value statement
D : vision proposition

Correct Answer : A

66 : Southwest Airlines has used multiple strategies since its inception in 1974. Why has its
current focus on organizational culture been such an effective strategy for the airline?
A : Southwest’s culture is variable and substitutable like the strategies it applies.
B : Southwest’s culture is inspirational so that its employees achieve greater work–life balance.
C : Southwest’s culture is unique, and strategic mimicry by other airlines is not possible.
D : Southwest’s culture is responsible for its low-cost, low-price, no-frills flights strategy.

Correct Answer : C

67 : Which concept refers to a list that produces the sequential steps required to get the job
done?
A : principles
B : procedures
C : program
D : policies

Correct Answer : B

68 : Which of the following is typical of an organization that follows Porter’s best-cost provider
strategy?
A : a hamburger served by a waiter on a plate with potato salad
B : a hamburger and fries in a paper bag served by the drive-through operator
C : a hamburger and baked potato placed on a tray and served by the takeout counter clerk
D : a hamburger and baby greens salad in a plastic bubble package bought at the grocery store

Correct Answer : A

69 : An organization is influenced by a variety of elements from the external environment. On

the other hand, which of the following appears to be derived from the internal environment of
the organization?
A : technology
B : sociocultural factors
C : HR diversity management policy
D : changing demographics

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Correct Answer : C

70 : Rand Solar Technologies Ltd. is planning its future. In the process, the senior leadership
team is preparing the organization’s objectives, competitive scopes, and action plans to
achieve its goals. What is the leadership team doing?
A : conducting a SWOT analysis
B : identifying the organization’s competitive advantage
C : formulating the organization’s strategy
D : applying principles of strategic management

Correct Answer : C

71 : What type of strategy changes incrementally due to environmental changes?

A : intended
B : discarded
C : realized
D : emergent

Correct Answer : D

72 : The President and CEO of Walmart outlined the company’s overall strategy and all its
business interests. The focus of the strategy was on long-term growth and survival. What type
of strategy is Walmart adopting?
A : corporate
B : business
C : international
D : expansion

Correct Answer : A

73 : The senior leadership team at Walmart outlined the company’s corporate strategy, which
included plans for increasing its products and services. What type of strategy is Walmart
adopting?
A : restructuring
B : divestiture
C : business
D : growth

Correct Answer : D

74 : The owner of Whites Barbecues outlined the company’s strategy. The focus of the strategy
was concerned with how to build the company’s competitive position. What type of strategy is
Whites Barbecues adopting?
A : corporate
B : business
C : international
D : expansion

Correct Answer : B

75 : On the Quality Greens Farm Market website are the words “to make healthy, locally grown
farm food products accessible to lower-income residents.” What is this an example of?
A : mission
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B : vision
C : values
D : objectives

Correct Answer : C

76 : What type of objective would include being ethical and environmentally responsible?
A : long-term
B : short-term
C : soft
D : hard

Correct Answer : C

77 : Which of the following best describes the core values of a company?

A : the organization’s long-term plan
B : the basic direction of the organization
C : the basic beliefs that govern workers’ behaviour in an organization
D : the reason an organization exists

Correct Answer : C

78 : Cupcasions is a small bakery that crafts and sells gourmet cupcakes and special-occasion
cakes. To achieve its business objectives, the managers scan their external environment for
threats and opportunities so they can make proactive changes to their strategic plan. What
external factors would they scan for?
A : tangible assets
B : business processes
C : changing demographics
D : market leadership

Correct Answer : C

79 : What is the entire process of conceptualizing the mission of an organization, identifying the
strategy, and developing long-range performance goals?
A : strategic plan
B : strategic intent
C : strategic implementation
D : strategic formulation

Correct Answer : D

80 : Pacific Kayaks Ltd. provides ocean kayaks with distinctive qualities valued by customers.
The company attracts customers because it sets itself apart from the competition. It is
successful because it has access to leading scientific research on polyethylene, a very abrasion-
resistant material used in the construction of its kayaks. The company also has a strong sales
and marketing team and a corporate reputation for quality and innovation. What competitive
strategy is Pacific Kayaks Ltd. using?
A : low-cost provider
B : differentiation
C : market niche with lower cost
D : focus strategy

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Correct Answer : B

81 : RightWay Fencing Ltd. monitors the technological and economic trends in its external
environment as well as its internal assets and resource capabilities. What is it most likely
performing?
A : a competitive environment scan
B : an environment scan
C : a strategic plan
D : a SWOT analysis

Correct Answer : D

82 : SunCore Consulting monitors demographic and labour market trends. It is most likely
performing which of the following?
A : a human resource scan
B : an environment scan
C : a strategic analysis
D : a labour market analysis

Correct Answer : B

83 : The senior leadership team at Price Warehouse have decided on the competitive position
Price Warehouse wants to achieve. Price Warehouse is well positioned to compete for the
largest number of customers through the lowest prices. What type of strategy is Price
Warehouse adopting?
A : broad differentiation strategy
B : low-cost provider strategy
C : focused strategy based on lower cost
D : focused strategy based on differentiation

Correct Answer : B

84 : McNiven Construction Ltd. is influenced by a variety of elements from the internal

environment. On the other hand, which of the following appears to be derived from the external
environment of the company?
A : safety regulations
B : employment policies
C : safety practices
D : competencies of employees

Correct Answer : A

85 : What is it called when an organization develops objectives, plans, and courses of action
concerning how it will operate to gain competitive advantage?
A : goal setting
B : competitive scope
C : strategy
D : organizational planning

Correct Answer : C

86 : Due of the unpredictability of future events, many strategic planners formulate their plans
so they can respond to changes in the environment. How would you describe this strategic
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planning process?
A : a cyclical process
B : a reactive process
C : a dynamic process
D : a perceived process

Correct Answer : C

87 : What type of strategies focus on the overall strategy of the organization and all of its
businesses?
A : corporate strategies
B : intended strategies
C : management strategies
D : business strategies

Correct Answer : A

88 : What type of strategy focuses on the action plans and competitive scopes for a single line
of business?
A : leadership strategy
B : business strategy
C : emergent strategy
D : corporate strategy

Correct Answer : B

89 : As McDonald’s sales and profits declined, the company decided to focus on a core item:
coffee. What restructuring strategy was being adopted?
A : divestiture
B : liquidation
C : stability
D : turnaround

Correct Answer : D

90 : What type of strategies are concerned with the question, What business should we be in?
A : intended strategies
B : management strategies
C : corporate strategies
D : business strategies

Correct Answer : C

91 : What type of strategies are concerned with the question, How should we compete?
A : competitive strategies
B : emergent strategies
C : corporate strategies
D : business strategies

Correct Answer : D

92 : WestJet tries to demonstrate to the public that its customer service is better than other
Canadian airlines because WestJet has have low prices and more caring and innovative
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services. How would you define this strategy?
A : corporate strategy
B : business strategy
C : divestiture strategy
D : management strategy

Correct Answer : B

93 : Shoreline Docks, a small West Coast dock construction company, is influenced by a variety
of elements from their its environment. Which of the following appears to be derived from the
company’s internal environment?
A : legislation
B : economy
C : safety practices
D : technology

Correct Answer : C

94 : What type of corporate objective usually defines the targets for the social conduct of
business?
A : hard
B : focused
C : social
D : soft

Correct Answer : C

95 : What are the broad guidelines to action, which establish the parameters and rules in an
organization?
A : plans
B : policies
C : objectives
D : procedures

Correct Answer : B

96 : Refer to Scenario: Tentree Apparel. Tentree Apparel is achieving success implementing

change. What two concepts did the owners need to align to implement this change?
A : motivation and hiring practices
B : position modules and salary theories
C : principles and salary theories
D : HRM practices and organizational goals

Correct Answer : D

97 : Refer to Scenario: Tentree Apparel. Tentree Apparel states that it wants to “become the
most environmentally progressive company on the planet.” What type of statement does this
quote describe?
A : strategic plan
B : intended policy
C : strategic intent
D : value statement

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 Correct Answer : C

98 : Refer to Scenario: Tentree Apparel. Tentree Apparel aims “to plant 1 billion trees by 2013.”
What type of statement does this quote describe?
A : goal
B : policy
C : strategic plan
D : value statement

Correct Answer : A

99 : Refer to Scenario: Tentree Apparel. Tentree Apparel has formulated its organizational
goals, objectives, action plans, and the mission statement. What is this the process called?
A : organizational planning
B : strategy
C : strategic analysis
D : emergent strategy

Correct Answer : B

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