Strategic Management and Decision-Making Fundamentals Quiz

Decision Sciences

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1. What are above-average returns?

Returns that are below industry standards.

Returns in excess of what an investor expects to earn from other investments with a similar amount of risk

Returns that are not influenced by the amount of risk involved.

Returns that are exactly what an investor expects from an investment.

Returns that are lower than the market average.

Above-average returns refer to the returns on an investment that exceed what an investor would typically expect based on the level of risk involved. It is a positive outcome where the investment performs better than anticipated.

Explanation

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About This Quiz

Strategic Management And Decision-making Fundamentals Quiz - Quiz

Dive into the essentials of structured decision making with this SMDM Chapter 1 review. This assessment enhances your understanding of key decision-making processes and methodologies, crucial for professionals and students in decision sciences.

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2. What is risk in terms of investing?

An investor's uncertainty about the economic gains or losses that will result from a particular investment.

The fixed return rate of an investment.

The total amount of money an investor has available to invest.

The level of diversification within an investment portfolio.

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3. How are returns typically measured?

Often measured in terms of accounting figures, such as return on assets, return on equity, or return on sales. Alternately,... Often measured in terms of accounting figures, such as return on assets, return on equity, or return on sales. Alternately, returns can be measured on the basis of stock market returns, such as monthly returns.

Measured solely based on customer feedback

Measured by the number of employees in the company

Measured by the amount of office space occupied by the business

Returns are typically measured in terms of financial metrics or stock market performance, not by customer feedback, number of employees, or office space.

Explanation

Returns are typically measured in terms of financial metrics or stock market performance, not by customer feedback, number of employees, or office space.

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4. What is the Strategic Management Process?

Full set of commitments, decisions, and actions required for a firm to achieve strategic competitiveness and earn above-average returns

A term used to describe the tactical operations of a business without any consideration for long-term goals.

A one-time implementation of strategies without any further review or adjustments.

The process of randomly making decisions without long-term goals in mind.

The Strategic Management Process involves the full set of commitments, decisions, and actions required for a firm to achieve strategic competitiveness and earn above-average returns by carefully planning and executing strategies over time.

Explanation

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5. What are the steps in the Strategic Management Process?

1. Strategic Inputs: External Env., Internal Organization, Vision/Mission2. Strategic Actions: Strategy Formulation and Strategy Implementation3. Strategic Outcomes: Strategic Competitiveness Above-Average... 1. Strategic Inputs: External Env., Internal Organization, Vision/Mission2. Strategic Actions: Strategy Formulation and Strategy Implementation3. Strategic Outcomes: Strategic Competitiveness Above-Average Returns (feedback)

1. Crisis Management: Responding to Emergencies, Minimizing Damage, Restoring Normal Operations2. Risk Assessment: Identifying Potential Threats, Evaluating Likelihood and Impact3.... 1. Crisis Management: Responding to Emergencies, Minimizing Damage, Restoring Normal Operations2. Risk Assessment: Identifying Potential Threats, Evaluating Likelihood and Impact3. Business Continuity Planning: Ensuring Operations Can Continue in Adverse Conditions

1. Strategic Planning: Goal Setting, Strategy Development, Resource Allocation2. Tactical Execution: Implementation of Plans, Monitoring Progress3. Performance Evaluation: Assessing Results,... 1. Strategic Planning: Goal Setting, Strategy Development, Resource Allocation2. Tactical Execution: Implementation of Plans, Monitoring Progress3. Performance Evaluation: Assessing Results, Making Adjustments

1. Market Research: Understanding Customer Needs, Analyzing Competitors, Identifying Opportunities2. Product Development: Creating New Offerings, Improving Existing Products3. Marketing Campaign:... 1. Market Research: Understanding Customer Needs, Analyzing Competitors, Identifying Opportunities2. Product Development: Creating New Offerings, Improving Existing Products3. Marketing Campaign: Promoting Products, Building Brand Awareness

The correct answer outlines the key steps in the Strategic Management Process, starting from strategic inputs, moving to strategic actions, and concluding with strategic outcomes that focus on competitiveness and returns.

Explanation

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6. What are two factors that contribute to the competitive landscape?

1. Social Media Influencers2. Government Regulations3. Random Chance

1. The Global Economy2. Rapid Technology Changes

The competitive landscape is influenced by external factors such as the global economy and rapid technology changes, which impact how businesses compete in the market. Social media influencers, government regulations, and random chance are not primary factors that shape the competitive landscape.

Explanation

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7. What are the three categories related to Technology and Technological Changes?

1) Industrial Revolution and Mass Production

2) Agricultural Innovations and Green Technologies

3 Categories:1) Technology Diffusion and Disruptive Technologies2) The Information Age3) Increasing Knowledge Intensity

3) Cultural Shifts and Social Media Influence

The correct answer includes categories specifically related to technology diffusion, disruptive technologies, the information age, and increasing knowledge intensity. The incorrect answers do not accurately represent the categories mentioned in the correct answer.

Explanation

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8. What are disruptive technologies?

Technologies that improve existing technologies without creating new markets.

Technologies that are outdated and no longer in use.

Technologies that have minimal impact on industries and markets.

Technologies that destroy the value of an existing technology and create new markets-Can create new industry or can harm industry... Technologies that destroy the value of an existing technology and create new markets-Can create new industry or can harm industry incumbents-Examples: iPods, PDAs, WiFi, and the browser-When disruptive techs create a new industry, competitors follow

Disruptive technologies are innovations that significantly alter the way that businesses operate, creating new markets or causing existing markets to evolve. They often outpace existing technologies and can have a profound impact on industry incumbents.

Explanation

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9. What is the term used to describe the realities of the competitive landscape characterized by inherent instability and change?

Perfect Competition

Oligopoly

A term often used to capture the realities of the competitive landscape. Under conditions of the hypercompetition, assumptions of market... A term often used to capture the realities of the competitive landscape. Under conditions of the hypercompetition, assumptions of market stability are replaced by notions of inherent instability and change. Hypercompetition results from the dynamics of strategic maneuvering among global and innovative combatants.-Firms aggressively challenge their competitors in the hopes of improving their competitive position and ultimately their performance.

Monopoly

Hypercompetition is the term used to describe the competitive landscape where assumptions of market stability are replaced by notions of inherent instability and change. It involves strategic maneuvering among global and innovative combatants.

Explanation

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10. What does the I/O (Industrial Organization) Model explain?

D. Prioritizes marketing strategies over industry analysis.

B. Emphasizes the role of individual managers in shaping a company's performance.

Explains the external environment's dominant influence on a firm's strategic actions. The model specifies that the industry in which a... Explains the external environment's dominant influence on a firm's strategic actions. The model specifies that the industry in which a company chooses to compete has a stronger influence on performance than do the choices managers make inside their orgs. -I/O Model challenges firms to locate the most attractive industry in which to compete

A. Focuses on internal factors that impact a firm's strategic decisions.

C. Suggests that industry selection has minimal impact on a firm's success.

The correct answer is focused on how external factors influence a firm's strategic actions, particularly the importance of industry selection in determining performance.

Explanation

The correct answer is focused on how external factors influence a firm's strategic actions, particularly the importance of industry selection in determining performance.

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11. What are the 4 Underlying Assumptions of the I/O Model?

3. Resources for implementing strategies are not highly mobile across firms

1. External environment imposes pressures and constraints that determine the strategies resulting in above-avereage returns (AAR)2. Most firms competing within... 1. External environment imposes pressures and constraints that determine the strategies resulting in above-avereage returns (AAR)2. Most firms competing within an industry or a certain segment of that industry are assumed to control similar strategically relevant resources and to pursue similar strategies in light of those resources3. Resources for implementing strategies are highly mobile across firms4. Organizational decision makers are assumed to be rational and committed to acting in the firm's best interests, as shown by their profit-maximizing behaviors

2. Firms competing within an industry are not assumed to control similar strategically relevant resources and pursue similar strategies

1. Internal environment imposes pressures and constraints that determine the strategies resulting in above-average returns (AAR)

The I/O Model's 4 Underlying Assumptions are crucial in understanding how firms can achieve above-average returns in the competitive business environment.

Explanation

The I/O Model's 4 Underlying Assumptions are crucial in understanding how firms can achieve above-average returns in the competitive business environment.

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12. What is the Five Forces Model of Competition?

A model that only considers the competition within a company's own workforce.

A model that focuses solely on the pricing strategies of a business.

Suggests that an industry's profitability is a function of interactions among 5 forces:1) Suppliers, 2) Buyers, 3) Competitive Rivalry, 4)... Suggests that an industry's profitability is a function of interactions among 5 forces:1) Suppliers, 2) Buyers, 3) Competitive Rivalry, 4) Substitutes, 5) Potential Entrants -Determines industry's profit potential and the strategy necessary to establish a defensible competitive position

A model that analyzes only the marketing tactics used by businesses.

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13. What is the basic premise of the Resource-Based Model?

Basic Premise: A firm's unique and internal resources and capabilities, in combination is the basis for firm strategy and AAR

A firm's external environment is the primary driver of firm strategy.

Strategic alliances with competitors are the key to long-term profitability.

Competitive pricing is the most important factor in determining a firm's success.

The Resource-Based Model focuses on utilizing a firm's internal resources and capabilities for developing strategy, rather than external factors or competitive pricing.

Explanation

The Resource-Based Model focuses on utilizing a firm's internal resources and capabilities for developing strategy, rather than external factors or competitive pricing.

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14. What are the underlying assumptions of the Resource-Based Model?

Underlying Assumptions:1. Differences in firms' performances across time are due primarily totheir unique resources and capabilities rather than to the... Underlying Assumptions:1. Differences in firms' performances across time are due primarily totheir unique resources and capabilities rather than to the industry'sstructural characteristics2. Firms acquire different resources and develop unique capabilitiesbased on how they combine and use resources; uniqueness should definefirms' strategic actions3. Resources are both tangible and intangible

Underlying Assumptions:1. Firms' performances are solely dependent on industry's structural characteristics2. All firms have the same set of resources and... Underlying Assumptions:1. Firms' performances are solely dependent on industry's structural characteristics2. All firms have the same set of resources and capabilities3. Resources are solely tangible

The correct answer focuses on the unique resources and capabilities of firms rather than industry structural characteristics. It also emphasizes the uniqueness of each firm's resources and capabilities, as well as the combination of tangible and intangible resources.

Explanation

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15. Who are stakeholders?

Only the top executives of a company

Customers only

People who have no interest in a firm's performance

Are the individuals and groups who can affect, and are affected by, the strategic outcomes achieved and who have enforceable... Are the individuals and groups who can affect, and are affected by, the strategic outcomes achieved and who have enforceable claims on a firm's performance

Stakeholders are individuals and groups who are directly or indirectly impacted by the actions of a firm and have the ability to influence its outcomes.

Explanation

Stakeholders are individuals and groups who are directly or indirectly impacted by the actions of a firm and have the ability to influence its outcomes.

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16. Who are the Capital Market Stakeholders?

Competitors of the firm who invest in the stock market

Shareholders and the major suppliers of the firm's capital-If dissatisfied, lenders may impose stricter covenants on subsequent borrowing of capital... Shareholders and the major suppliers of the firm's capital-If dissatisfied, lenders may impose stricter covenants on subsequent borrowing of capital or may sell their stock.

Employees of the firm who hold shares in the company

Government agencies that regulate the financial industry

Capital market stakeholders typically include shareholders and major suppliers of a firm's capital. Employees holding shares, competitors investing in the stock market, and government agencies regulating the industry are not considered capital market stakeholders in the traditional sense.

Explanation

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17. Who are considered as Product Market Stakeholders?

The firm's primary customers, suppliers, host communities, and unions representing the workforce

Government agencies and media outlets.

Competitors and regulatory authorities.

Investors and employees.

Product market stakeholders refer to entities that are directly involved in the buying and selling of a firm's products or services. These entities can impact the firm's operations and success.

Explanation

Product market stakeholders refer to entities that are directly involved in the buying and selling of a firm's products or services. These entities can impact the firm's operations and success.

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18. Who are considered as organizational stakeholders?

Government regulatory agencies

Competitors in the industry

All of a firm's employees, including both nonmanagerial and managerial personnel

Customers and vendors

Organizational stakeholders typically include individuals or groups that have an interest or concern in the organization's activities and decisions. This can encompass a wide range of parties, but all employees, at all levels, are considered crucial stakeholders as they are directly involved in the operations and success of the firm.

Explanation

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