Strategic Management: Competitiveness and Globalisation 7th ASIA Pacific Edition by Hanson Test ban

ANSWER: d
49. Strategic leaders are:
a.  the CEO and top-level managers of a firm
b.  people who are affected by a firm’s performance and who have claims on its performance
c.  the individuals and groups who have invested capital in a firm in the expectation of earning positive return on
their investment
d.  people located in different parts of the firm using the strategic management process to help the firm reach its
vision and mission
ANSWER: d
50. Organisational culture is:
a.  an appreciation for the arts in the organisation
b.  an organisation’s ability to act in a responsible manner towards all of its employees
c.  the amount of a firm’s social activity in the community
d.  the complex set of ideologies, symbols and core values shared by most members of the organisation
ANSWER: d
51. The work of effective strategic leaders is characterised by:
a.  innovative thinking and change in the dynamic competitive landscape
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b.  high income levels
c.  a high level of certainty in the organisation
d.  a lack of ability to affect the firm’s direction
ANSWER: a
52. Which of the following is not a step in identifying profit pools?
a.  Define the pool’s boundaries.
b.  Estimate the pool’s overall size.
c.  Estimate the pool’s effect on current activities.
d.  Estimate the size of the value-chain activity in the pool.
e.  Reconcile the calculations.
ANSWER: c
53. Almost all strategic management process decisions have ethical dimensions because:
a.  ethics are dictated by an organisation’s culture
b.  they are related to how an organisation interacts with its stakeholders
c.  actions of employees demand review
d.  decisions are a part of the strategic management process
ANSWER: b
54. Describe the steps of the strategic management process.
ANSWER: The firm’s first step in the process is to analyse its external environment and internal organisation to determine
its resources, capabilities and core competencies – the sources of its ‘strategic inputs’.
With the information gained from external and internal analyses, the firm develops its vision and mission and
formulates one or more strategies. To implement its strategies, the firm takes actions towards achieving
strategic competitiveness and above-average returns. Effective strategic actions that take place in the context
of carefully integrated strategy formulation and implementation efforts result in positive outcomes. This
dynamic strategic management process must be maintained as ever-changing markets and competitive
structures are coordinated with a firm’s continuously evolving strategic inputs.
55. Why is strategy important for a firm to achieve a competitive advantage?
ANSWER: Organisations undertake a strategic management process to achieve competitive advantage in order to gain
above average returns. The strategic management process involves analysis of the external environment and
the internal situation of the firm providing information which can be used to formulate strategies which can
help the firm avoid risk and effectively implement its efforts to achieve positive outcomes such as competitive
advantage and above average returns.
56. What is globalisation? What are the benefits and risks for an organisation operating in a global marketplace?
ANSWER: Globalisation is the increasing economic interdependence among countries and their organisations as reflected
in the flow of financial capital, knowledge and goods and services across borders. The benefits of
globalisation include increased access to capital resources and higher performance standards in quality,
productivity, cost, product introduction time and operational efficiency. In general, global organisations have
greater access to both skilled and unskilled workers, and can access multiple markets to obtain the resources
necessary to remain competitive. Organisations engaging in global operations must ensure they are culturally
sensitive to the values and norms of the host country, and must overcome the ‘liability of foreignness’.
Additional risks of operating globally include the time delay associated with learning how to compete in
markets that are new to them and the possibility of over-diversification, which may result in ineffective
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