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In the final step of the stakeholder impact analysis, a firm


A) identifies its stakeholders' interests and claims.
B) differentiates its internal stakeholders from its external stakeholders.
C) recognizes the opportunities and threats stakeholders present.
D) decides a course of action to address the stakeholders' concerns.

E) C) and D)
F) A) and D)

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Windmill Inc., a vendor, regularly supplies capacitors to Inland Electronics for use in its products. Therefore, Windmill Inc. is Inland Electronics'


A) internal stakeholder.
B) director.
C) shareholder.
D) external stakeholder.

E) A) and D)
F) C) and D)

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Which of the following methods of developing a strategy best illustrates scenario planning?


A) Based on the previous year's profits, the CEO of Solva Inc. decided to adopt an expansion strategy in its home market.
B) A sales person at MP Foods Inc. suggested that the company should introduce an organic version of its gelato to cater to the needs of the increasingly health-conscious population.
C) The managers at Lyon Clothing Inc. formulated a strategy that is able to handle small to medium to large increases in the prices of cotton in the future.
D) The CEO of BCT Inc., a large conglomerate, has decided to enter the South American market based on the competitor's success in the same market.

E) B) and C)
F) A) and C)

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The distribution department at Golden Grains Wheat Company has decided to adopt the FIFO (first in, first out) method of inventory to dispatch its bags of wheat. Which of the following strategies does this scenario best illustrate?


A) functional strategy
B) corporate strategy
C) master strategy
D) business strategy

E) A) and C)
F) All of the above

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Who are a firm's stakeholders?

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Stakeholders are organizations, groups, ...

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BlueStainless Corp. has been able to gain and sustain a competitive advantage due to its strong relationship with its employees, customers, suppliers, and local communities. The company believes in lifetime employment and ensures that its employees grow along with the company. Investors are more than satisfied with the returns on their investments. Also, 3 percent of the company's profit is spent on community development. With initiatives like these, customers feel privileged to associate themselves with BlueStainless products. This scenario best illustrates the implementation of a


A) strategic analysis.
B) stakeholder strategy.
C) wild card event.
D) black swan event.

E) B) and D)
F) A) and C)

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TriCorp is a major financial services corporation. With the CEO of TriCorp preparing to retire, several top managers are vying for the position. Jared considers himself to be a leading candidate. He not only has advanced degrees from business schools and more than a decade of experience working for TriCorp, but he also has personally ensured that his division has exceeded its performance benchmarks over the past three years, even though many of his employees are dissatisfied because they feel they are stagnating in their jobs. According to the level 5 leadership pyramid, why has Jared failed to exhibit the qualities of a level-5 leader?


A) His individual skills are not well developed.
B) His actions do not match the organization's strategy.
C) He lacks the organizational ability to accomplish the organization's goals.
D) He is not able to help others reach their full potential.

E) B) and C)
F) C) and D)

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Corporate executives at LikeReal, Inc. decide to compete in the remote model airplane industry by making the largest model planes available. By doing this, they completed part of their


A) implementation strategy.
B) corporate strategy.
C) functional strategy.
D) business strategy.

E) A) and B)
F) C) and D)

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Which of the following scenarios best illustrates a good stakeholder strategy?


A) VP Inc. follows a strategy in which maximization of the shareholder's wealth is the primary concern of the managers.
B) Carrvero Inc. ensures that its employees are paid the least in the industry so that its external stakeholders can get the best price.
C) PA Corp. distributes only 40 percent of its annual profit after taxes to shareholders, while the remaining is invested for further research, and distributed among employees and the local community.
D) Gen Pharma Corp. ensures that it fully exploits free natural resources, so that most of its profits go to shareholders in the form of dividends.

E) All of the above
F) None of the above

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Molly Hue Apparels Inc. (MHA) had been outsourcing its production to less-developed countries in order to reduce its cost of production. With the emergence of its competitor, Hova Inc., MHA lost its competitive advantage. Hova had its production units in its home country that allowed the company to bring out the latest trends to the market earlier than MHA. Also, MHA frequently suffered due to political instability and lack of intellectual property laws in the outsourced countries. Thus, parts of MHA's strategies became obsolete and it had to relocate its production. What are such obsolete strategies referred to as in the planned emergence model?


A) intended strategy
B) emergent strategy
C) unrealized strategy
D) tactical strategy

E) B) and D)
F) A) and B)

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Which of the following statements is true of the social responsibilities of a business?


A) A firm's ethical responsibilities go beyond its legal responsibilities.
B) Shareholders mandatorily require a firm to perform its ethical and philanthropic responsibilities.
C) Ethical responsibilities are the foundational building block of a firm's social responsibility.
D) Legal responsibilities are often subsumed under the idea of corporate citizenship, reflecting the notion of voluntarily giving back to society.

E) None of the above
F) A) and B)

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After carefully assessing the market potential for solar-powered mobile devices, the top-level executives of Futuretronics Inc. decided that the company would be launching a line of solar-powered tablets within the next two years. This would mean that the tablet division would need to immediately begin research and development efforts. Which of the following strategies in the planned emergence model does this best illustrate?


A) intended strategy
B) emergent strategy
C) unrealized strategy
D) tactical strategy

E) All of the above
F) A) and B)

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Which of the following statements is true of strategic initiatives?


A) Strategic initiatives can be the result of a response to external trends or come from internal sources.
B) When lower-level employees are less empowered, the possibility of strategic initiatives is higher.
C) Strategic initiatives result from top-down planning by executives and not through a bottom-up process.
D) Random events and accidental happenstances reduce the possibility of strategic initiatives in organizations.

E) B) and D)
F) B) and C)

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In Strategy Highlight 2.1, what type of strategy did Diana, the Starbucks store manager in southern California, use to develop the new iced beverage for her store?


A) She used a rational planning approach to strategy planning.
B) She created a dominant strategy plan.
C) She used scenario planning.
D) She used an emergent strategy.

E) A) and D)
F) B) and D)

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Which of the following strategies best illustrates a generic business strategy?


A) a cost-cutting strategy that corporate executives in the headquarters want all business units of a large conglomerate to implement
B) a strategy to use monetary incentives to motivate employees working on a project
C) a decision to computerize a firm's database in order to improve customer service
D) a decision to niche market the jewelry sold by a company while the apparel division under the same company sells its products through mass marketing

E) C) and D)
F) B) and D)

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Due to several black swan events in the past, the


A) shareholders of public companies have become more confident in investing their resources in businesses.
B) need for corporate governance and transparency has decreased within various industries.
C) nations around the globe have explicitly appreciated and accepted capitalism as an economic system.
D) implicit trust relationship between the corporate world and society at large has deteriorated.

E) A) and C)
F) B) and C)

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Explain the role of power in the strategic leadership process

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Power is defined as the strategic leader...

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Which of the following is typically an economic responsibility of a firm?


A) sourcing raw materials from highly developed countries
B) paying adequate returns to the firm's stockholders on the capital invested by them
C) donating resources, in terms of money and time, toward community development
D) helping a nation increase its import of goods and services

E) C) and D)
F) A) and B)

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Understanding the Resource Allocation Process (RAP) will have large effects on shaping a firm's realized strategy. Which of the following is an example of such an allocation of resources?


A) Starbucks' launch of iced drinks
B) Teach For America's mission statement
C) Merck's voluntary withdrawal of Vioxx from the market
D) Intel's rule to "maximize margin-per-wafer-start"

E) C) and D)
F) A) and C)

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Mercurial Foods is the parent company of several chain restaurants offering a variety of cuisines. The top management at Mercurial has decided to enter the frozen foods industry based on its assessment of the profit potential in that industry. Which of the following strategies does this best illustrate?


A) corporate strategy
B) business strategy
C) functional strategy
D) divisional strategy

E) None of the above
F) A) and C)

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