Chapter 9 Strategy Review, Evaluation,

and Control

65) Which one of Rumelt's criteria for

evaluating strategies refers to the need for
strategists to examine sets of trends?
B) Consonance
Answer: B
66) If success for one organizational
department means failure for another
department, then strategies may be
E) inconsistent.
Answer: E
67) Modern organizational realities demand
that employees demonstrate greater
A) flexibility.
B) innovation.
C) creativity.
D) initiative.
E) All of the above
Answer: E
68) Strategy-evaluation activities should
ideally be performed
C) on a continuous basis.
Answer: C
69) Corrective actions are almost always
_______ except when external and internal
factors have not significantly changed and
the firm is progressing satisfactorily toward
achieving stated objectives.
B) needed
Answer: B

54) Which of these is a basic activity of

strategy evaluation?
D) All of the above
Answer: D
55) Too much emphasis on evaluating
strategies
A) may be expensive and counterproductive.
Answer: A
56) What is the cornerstone of effective
strategy evaluation?
A) Adequate and timely feedback
Answer: A
57) All of these are Richard Rumelt's criteria
to evaluate a strategy except:
D) distinctiveness.
Answer: D
58) With the passage of time strategy
evaluation is becoming
A) increasingly difficult.
Answer: A
59) All of the following are reasons strategy
evaluation is more difficult today except:
D) the decreasing difficulty of predicting the
future with accuracy.
Answer: D
60) Which of the following is not a reason
for the increasing difficulty of evaluating
strategies?
A) Product life cycles are longer.
Answer: A
61) Success today
B) is no guarantee of success tomorrow.
Answer: B
62) According to Rumelt, the final broad test
of strategy is its
B) feasibility.
Answer: B
63) Competitive advantage normally is the
result of superiority in resources, skills and
B) position.
Answer: B
64) What term refers to the need for
strategists to examine sets of trends, as well
as individual trends, in evaluating strategies?
B) Consonance
Answer: B

70) In the course of strategy evaluation if

you discover that major changes have
occurred in the firm's internal strategic
position, you should
C) take corrective actions.
Answer: C
71) Changes in the organization's
management, marketing,
finance/accounting, production/operations,
R&D and MIS strengths and weaknesses
should be the focus of a revised
B) IFE matrix.
Answer: B
72) A revised ________ should indicate how
effective a firm's strategies have been in
response to key opportunities and threats.
C) EFE matrix
Answer: C
73) Which of the following is not included
in measuring organizational performance?
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A) Comparing results to competitors'

expectations
Answer: A
74) Which of the following is a corrective
action a company might take to correct
unfavorable variances?
A) Divesting a division
B) Revising objectives
C) Raising capital with stock or debt
D) Allocating resources differently
E) All of the above
Answer: E
75) What is the basis for quantitative
financial evaluation?
D) Financial ratios
Answer: D
76) Which of these is not a key financial
ratio?
B) Production quality
Answer: B
77) Also important in evaluating strategies
are _______ criteria, like high absenteeism
and turnover rates, or low employee
satisfaction.
B) qualitative
Answer: B
78) Financial ratios are used to compare a
firm's performance over different time
periods, compare the firm's performance to
industry averages, and compare a firm's
performance with
E) the performance of competitors.
Answer: E
79) Most quantitative criteria are geared to
________ objectives rather than ________
objectives.
C) annual; long-term
Answer: C
80) What corrective actions might a firm
take during strategy evaluation?
A) Revising the business mission
B) Issuing stock
C) Revising objectives
D) Selling a division
E) All of the above
Answer: E
81) According to author Alvin Toffler, what
occurs when the nature, types and speed of
changes overpower an individual's or
organization's ability and capacity to adapt?

C) Future shock
Answer: C
82) Corrective actions should always
A) strengthen an organization's competitive
position in its industry.
Answer: A
83) Research suggests that which of the
following is one of the best ways to
overcome individuals' resistance to change
in strategy evaluation?
A) Participation
Answer: A
84) According to researchers, all of the
following encourage individuals to accept
change except:
E) when the nature, types, and speed of
changes overpower their ability and capacity
to adapt.
Answer: E
85) Corrective action should do all of the
following except:
B) avoid external opportunities.
Answer: B
86) Which of the following is not one of the
four perspectives from which the Balanced
Scorecard allows firms to evaluate
strategies?
A) Social responsibility
Answer: A
87) What aims to balance long-term with
short-term concerns, financial with nonfinancial concerns, and internal with
external concerns?
B) The Balanced Scorecard approach
Answer: B
88) The Fortune 50 includes all of the
following except:
E) the largest hospitals.
Answer: E
89) Which of the following is not a key
attribute that serves as one of the evaluative
criteria for Fortune's "America's Most
Admired Companies?"
D) Amount of physical resources
Answer: D
90) The strategy-evaluation process
D) should foster mutual understanding and
trust.

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91) Controls need to be ________ rather

than ________.
A) action-oriented; information-oriented
Answer: A
92) The strategy-evaluation process should
foster
A) mutual understanding.
Answer: A
93) Which of the following is true regarding
the design of a firm's strategy-evaluation
system?
D) It should be determined based on the
unique characteristics of a company.
Answer: D
94) ________ organizations require more
elaborate and detailed strategy-evaluation
systems than ________ ones because it is
more difficult to coordinate efforts among
different divisions and functional areas.
D) Small; large
Answer: D
95) What activity is defined as having
alternative plans that can be put into effect if
certain key events do not occur as expected?
D) Contingency planning
Answer: D
96) Which of the following statements about
contingency plans is not true?
D) Strategists should plan for all possible
contingencies.
Answer: D
97) What has been shown to permit quick
response to change, prevent panic in crisis
situations, and make managers more
adaptable?
C) Contingency planning
Answer: C
98) What term is defined as "a systematic
process of objectively obtaining and
evaluating evidence regarding assertions
about economic actions and events to
ascertain the degree of correspondence
between these assertions and established
criteria, and communicating the results to
interested users?"
A) Auditing
Answer: A

100) All companies have the option to use

the IFRS procedures in _______, and then
all companies are required to use IFRS in
_______.
C) 2011, 2014
Answer: C
101) Proponents of the top-down approach
contend that _______ are the only persons in
the firm with the collective experience,
acumen, and fiduciary responsibility to
make key strategy decisions.
A) top executives
Answer: A
102) A particularly important twenty-firstcentury challenge facing all strategists today
is
D) All of the above
Answer: D
103) Increased education and diversity of
the workforce at all levels are reasons why
D) middle- and lower-level managers, and
even nonmanagers, should be involved in
the strategic planning process.
Answer: D
104) Most strategy literature advocates that
strategic management is
A) more of a science than an art.
Answer: A
105) All of the following are reasons to be
completely open with the strategy process
except
E) openness limits rival firms from imitating
or duplicating the firm's strategies.
Answer: E
106) Which of the following is not a reason
why some firms prefer to conduct strategicplanning in secret?
B) It enhances understanding, commitment
and communication within the firm.
Answer: B

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