Strategic Management MCQ: Multiple Choice Questions and Answers on Strategic Management

1. The fundamental purpose for the existence of any organization is described by its
a. policies
b. mission
c. procedures
d. strategy

2. The fundamental purpose of an organization’s mission statement is to

a. create a good human relations climate in the organization
b. define the organization’s purpose in society
c. define the operational structure of the organization
d. generate good public relations for the organization

4. Which of the following is not a characteristic of strategic management that makes it different from
other types of management?
a. It is interdisciplinary.
b. It has an external focus.
c. It has an internal focus.
d. It concerns the present direction of the organization.

5. Which of the following is an issue considered in developing corporate strategies?

a. What business(es) are we in?
b. What direction are we going?
c. What resources do we have to implement our strategies?
d. What businesses are we in and what to do with those businesses?

6. Which of the following is NOT a major element of the strategic management process?
a. Formulating strategy
b. Implementing strategy
c. Evaluating strategy
d. Assigning administrative tasks

7. Competitive advantage can best be described as:

a. increased efficiency.
b. what sets an organization apart.
c. a strength of the organization.
d. intangible resources.
8. ________________ is the foundation of blue ocean strategy.
a. Innovation
b. Value creation
c. Value innovation
d. value cost trade-off

9. The various organizational routines and processes that determine how efficiently and effectively the
organization transforms its inputs into outputs are called:
a. strengths.
b. core competencies.
c. capabilities.
d. customer value.

10. When defining strategic management, the most important thing to remember is that it is:
a. Not as easy as you think
b. Mainly the province of senior managers
c. A living evolving process
d. More conceptual than practical
e. A way of determining responsibilities

11. An organisation’s strategy:

a. remains set in place longer than the mission and objectives
b. generally forms over a period of time as events unfold
c. tends to be formed at the same time the mission is developed and objectives are formulated
d. is usually conceived at a single time when managers sit down and work out a comprehensive strategic
plan for the next 3-5 years

12. The primary focus of strategic management is:

a. strategic analysis
b. the total organisation
c. strategy formulation
d. strategy implementation.

13. Which of the following is not an advantage of strategic management?

a. It provides organisations with a clearer sense of direction and purpose
b. It helps improve the political, economic, social and technological environment of the organisation
c. It helps orientate management decisions to relevant environmental conditions
d. It helps organisations be proactive rather than reactive
14. Which of the following defines what business or businesses the firm is in or should be in?
a. Business strategy
b. Corporate strategy
c. Functional strategy
d. National strategy

15. Which of the following defines how each individual business unit will attempt to achieve its mission?
a. Business strategy
b. Corporate strategy
c. Functional strategy
d. National strategy

16. Which of the following focuses on supporting the corporate and business strategies?
a. Competitive strategy
b. Corporate strategy
c. Operational strategy
d. National strategy
e. Mission strategy

17. Which one of the following is not a primary task of strategic managers?
a. Establishing strategic objectives
b. Developing the steps to follow in implementing operational level plans
c. Defining the business and developing a mission
d. Developing a strategy
e. Implementing and evaluating the chosen strategy

18. The task of strategy choice involves:

a. developing plans and activities which will improve the organisation’s performance and competitive
position
b. determining how the organisation can be more market and efficiency oriented
c. monitoring whether the organisation is achieving good financial performance
d. keeping the organisation free of debt

19. Which one of the following is at the core of strategic management?

a. Choosing which organisational objectives to focus on
b. Being alert for opportunities to change work responsibilities
c. Adapting the organisation to a changing external environment
d. Choosing whether to make decisions autocratically or on the basis of participation
20. The corporate level is where top management directs:
a. all employees for orientation
b. its efforts to stabilize recruitment needs
c. overall strategy for the entire organization
d. overall sales projections

21. The three organizational levels are:

a. corporate level, business level, functional level
b. corporate level, business unit level, functional level
c. corporate strategy level, business unit level, functional level
d. corporate strategy level, business level, specialist level

22. Which of the following is an example of competing on quick response?

a. a firm produces its product with less raw material waste than its competitors
b. a firm offers more reliable products than its competitors
c. a firm’s products are introduced into the market faster than its competitors’
d. a firm’s research and development department generates many ideas for new products

23. Which one of the following is NOT included in the Porter’s Five Forces model:
a. Potential development of substitute products
b. Bargaining power of suppliers
c. Rivalry among stockholders
d. Rivalry among competing firms

24. What is meant by the term ‘Stakeholder’?

a. A person who is not related with a business.
b. A person who is related with a business.
c. A person who owns a business.
d. A person who purchases the shares of a business.

25. Of the following, which one would NOT be considered one of the components of a mission statement?
a. The target market for XYZ is oil and gas producers as well as producers of chemicals.
b. XYZ shall hire only those individuals who have with sufficient educational levels so as to be of benefit to
our customers
c. The customers of XYZ shall include global and local consumers of gas and oil products and domestic users
of nontoxic chemicals
d. The technologies utilized by XYZ shall focus upon development of alternative sources of gas and oil so as
to remain competitive within the industry
26. The strategic management process is
a. a set of activities that will assure a temporary advantage and average returns for the firm.
b. a decision-making activity concerned with a firm’s internal resources, capabilities, and competencies,
independent of the conditions in its external environment.
c. a process directed by top-management with input from other stakeholders that seeks to achieve above-
average returns for investors through effective use of the organization’s resources.
d. the full set of commitments, decisions, and actions required for the firm to achieve above-average returns
and strategic competitiveness.

27. The goal of the organization’s__________ is to capture the hearts and minds of employees, challenge
them, and evoke their emotions and dreams.
a. vision
b. mission
c. culture
d. strategy

28. A firm’s mission

a. is a statement of a firm’s business in which it intends to compete and the customers which it intends to
serve.
b. is an internally-focused affirmation of the organization’s financial, social, and ethical goals.
c. is mainly intended to emotionally inspire employees and other stakeholders.
d. is developed by a firm before the firm develops its vision.

29. The environmental segments that comprise the general environment typically will NOT include
a. demographic factors.
b. sociocultural factors.
c. substitute products or services.
d. technological factors.

30. An analysis of the economic segment of the external environment would include all of the following
EXCEPT
a. interest rates.
b. international trade.
c. the strength of the U.S. dollar.
d. the move toward a contingent workforce.
31. Product differentiation refers to the:
a. ability of the buyers of a product to negotiate a lower price.
b. response of incumbent firms to new entrants.
c. belief by customers that a product is unique.
d. fact that as more of a product is produced the cheaper it becomes per unit.

32. Which of the following is NOT an entry barrier to an industry?

a. expected competitor retaliation
b. economies of scale
c. customer product loyalty
d. bargaining power of suppliers

33. Switching costs refer to the:

a. cost to a producer to exchange equipment in a facility when new technologies emerge.
b. cost of changing the firm’s strategic group.
c. one-time costs suppliers incur when selling to a different customer.
d. one-time costs customers incur when buying from a different supplier.

34. New entrants to an industry are more likely when (i.e., entry barriers are low when…)
a. it is difficult to gain access to distribution channels.
b. economies of scale in the industry are high.
c. product differentiation in the industry is low.
d. capital requirements in the industry are high.

35. Suppliers are powerful when:

a. satisfactory substitutes are available.
b. they sell a commodity product.
c. they offer a credible threat of forward integration.
d. they are in a highly fragmented industry.

36. The highest amount a firm can charge for its products is most directly affected by
a. expected retaliation from competitors.
b. the cost of substitute products.
c. variable costs of production.
d. customers’ high switching costs.
37. All of the following are forces that create high rivalry within an industry EXCEPT
a. numerous or equally balanced competitors.
b. high fixed costs.
c. fast industry growth.
d. high storage costs.

38. According to the five factors model, an attractive industry would have all of the following
characteristics EXCEPT:
a. low barriers to entry.
b. suppliers with low bargaining power.
c. a moderate degree of rivalry among competitors.
d. few good product substitutes.

39. Internal analysis enables a firm to determine what the firm

a. can do.
b. should do.
c. will do.
d. might do.

40. An external analysis enables a firm to determine what the firm

a. can do.
b. should do.
c. will do.
d. might do.

41. ________ is/are the source of a firm’s________, which is/are the source of the firm’s ________.
a. Resources, capabilities, core competencies
b. Capabilities, resources, core competencies
c. Capabilities, resources, above average returns
d. Core competencies, resources, competitive advantage

42. In the airline industry, frequent-flyer programs, ticket kiosks, and e-ticketing are all examples of
capabilities that are
a. rare.
b. causally ambiguous.
c. socially complex.
d. valuable.
43. Firms with few competitive resources are more likely
a. to not respond to competitive actions.
b. respond quickly to competitive actions.
c. delay responding to competitive actions.
d. respond to strategic actions, but not to tactical actions.

44. Competitors are more likely to respond to competitive actions that are taken by
a. differentiators.
b. larger companies.
c. first movers.
d. market leaders.

45. What can be defined as the art and science of formulating, implementing and evaluating cross-
functional decisions that enable an organization to achieve its objectives?
a. Strategy formulation
b. Strategy evaluation
c. Strategy implementation
d. Strategic management
e. Strategic leading

46. Which of the following is not a cultural product?

a. Rites
b. Emotions
c. Rituals
d. Sagas
e. Symbols

47. Which individuals are most responsible for the success and failure of an organization?
a. Strategists
b. Financial planners
c. Personnel directors
d. Stakeholders
e. Human resource managers

49. Long-term objectives should be all of the following except:

a. measurable.
b. continually changing.
c. reasonable.
d. challenging.
e. consistent.

52. The vision and mission statement can often be found

a. in the SEC report.
b. in annual reports.
c. on customer receipts.
d. on supplier invoices.
e. on community news bulletins

53. Which group would be classified as a stakeholder?

a. Communities
b. Banks
c. Suppliers
d. Employees
e. All of these

56. ST Strategies is an important strategy to

a. Match weakness with opportunities of the firm
b. Overcome external threats
c. Obtain benefit from its resources
d. Overcome its weakness and reducing threats

57. The immediate external environment includes:

a. Divisions
b. S. B. U. s
c. Competitors
d. Management

59. Strategic management involves the_______, directing, _______ and controlling of a company’s
strategy-related decisions and actions.
a. Financing; marketing
b. Planning; financing
c. Planning; organizing
d. Marketing; planning

60. A strategy is a company’s

a. Value statement
b. Pricing policy
c. Game Plan to outsmart competitor
d. Long-term objective

64. Which of the following resources is used by all organizations to achieve desired objectives?
a. Financial resources,
b. Physical resources,
c. Human resources
d. All of the mentioned options

66. Large-scale, future-oriented plans, for interacting with the competitive environment to achieve
company objectives refers to its
a. Strategy
b. Goals
c. Competitive analysis
d. Dynamic policies

68. Which of these basic questions should a vision statement answer?

a. What is our business?
b. Who are our employees?
c. Why do we exist?
d. What do we want to become?

70. Strategic management process activate in the sequence of_______

a. Environmental scanning, Strategy formulation, Implementation, control and evaluation
b. Strategy formulation, Environmental scanning, Implementation, control and evaluation
c. Environmental scanning, Strategy Implementation, formulation, control and evaluation
d. Strategy formulation, Implementation, control, evaluation, Environmental scanning

72. “A possible and desirable future state of an organization” is called:

a. Mission
b. Vision
c. Strategy implementation
d. None of above

73. Strategic decisions are based on what managers_____________, rather than on what they__________.
a. Know; forecast
b. React to; anticipate
c. Forecast; know
d. Compromise with; analyze

79. In a turbulent and competitive free enterprise environment, a firm will succeed only if it takes a(n)
_____________ stance towards change.
a. Reactive
b. Proactive
c. Anti-regulatory or anti-government
d. Vision and not mission

81. What are the means by which long-term objectives will be achieved?
a. Strategies.
b. Strengths.
c. Weaknesses.
d. Policies.
e. Opportunities.

82. Which of these basic questions should a vision statement answer?

a. What is our business?
b. Who are our employees?
c. Why do we exist?
d. What do we want to become?
e. Who are our competitors?

84.________ is not part of an external audit.

a. Analysing competitors
b. Analysing financial ratios
q. Analysing available technologies
d. Studying the political environment
e. Analysing social, cultural, demographic and geographic forces

85. Which individuals are most responsible for the success and failure of an organization?
a. Strategists
b. Financial planners
c. Personnel directors
d. Stakeholders
e. Human resource managers
86. Long-term objectives should be all of the following except:
a. Measurable.
b. Continually changing.
c. Reasonable.
d. Challenging.
e. Consistent.

91. External assessment is performed in which of the strategic management phase?

a. Strategy formulation stage
b. Strategy implementation stage
c. Strategy evaluation stage
d. All of the given options

92. Political variables have a significant effect on

a. Strategy formulation and implementation
b. Strategy formulation and evaluation
c. Strategy implementation and evaluation
d. Strategy formulation, implementation and evaluation

94. Social responsibility is a critical consideration for a company’s strategic decision makers since
a. Stockholders demand it
b. The mission statement must express how the company intends to contribute to the societies that sustain
it
c. It increases a company’s profits
d. It helps make decisions

96. Which of the following are signs of weakness in a company’s competitive position?
a. A return-on-equity is below 25% and earnings per share of less than Rs. 2.00
b. A price set by the firm higher than its rivals
c. A declining market share, poor product quality and few sales in market
d. Lower revenues and profit margin and narrow product line than the market leader

99. What is the central purpose of strategic evaluation?

a. Evaluate effectiveness of strategy to achieve organisational objectives.
b. Evaluate effectiveness of control system to measure achievements.
c. Evaluate effectiveness of strategies to be implemented efficiently.
d. Evaluate effectiveness of the strategy implementation process.