Fundamentals of Strategic Management: Test Bank

Chapter 1: Fundamentals of Strategic Management

TRUE/FALSE

1. The term strategy refers to various plans at all levels of the organization.

ANS: F
Strategy refers to top management’s plans to develop and sustain competitive advantage.

PTS: 1 DIF: Easy REF: 1-1

2. The term strategy refers primarily to activities at the top level of the organization.

ANS: T
Strategy refers to top management’s plans to develop and sustain competitive advantage.

PTS: 1 DIF: Easy REF: 1-1

3. A state whereby a firm’s strategies cannot easily be duplicated by its competitors is known as comparative advantage.

ANS: F
A state whereby a firm’s strategies cannot easily be duplicated by its competitors is known as competitive advantage.

PTS: 1 DIF: Difficult REF: 1-1

4. Managers who are too busy to engage in strategic planning should wait until they have more free time in their schedules.

ANS: F
Managers who are “too busy” need to make the time to consider strategic planning.

PTS: 1 DIF: Easy REF: 1-1

5. According to the strategic management model, external analysis should occur prior to internal analysis.

ANS: T
The strategic management model outlines the following order: external analysis, internal analysis, mission and direction, formulation, implementation, and control.

PTS: 1 DIF: Moderate REF: 1-1

6. According to the strategic management model, strategic control occurs before strategy formulation.

ANS: F
The strategic management model outlines the following order: external analysis, internal analysis, mission and direction, formulation, implementation, and control.

PTS: 1 DIF: Easy REF: 1-1

7. According to the strategic management model, strategic control and external analysis are simultaneous.

ANS: F
Strategic control and external analysis are two different steps in the strategic management model.

PTS: 1 DIF: Easy REF: 1-1

8. According to the strategic management model, strategy formulation and execution