THE AL –Hashier Educators (TAE)Notes

STRATEGIC MANAGEMENT MCQs

Architecture, Structure, and Culture
Question 1

When there is a fit between the goals of the organization and the goals of individuals, this is
known as:

a) Goal fit
b) Goal congruence
c) Goal hierarchy fit
d) Goal coordination
Question 2

Which of the following is correct?

a) An organization's structure would be expected to evolve as it grew larger and

more diverse
b) Every organization starts out with a simple structure, then moves to a functional
structure before becoming divisionalized
c) Network structures are superior to functional ones
d) Organizational performance will suffer if the structure is not stable
Question 3

The shape or format of reporting and decision making relationships can be defined as the
organizational:

a) Span of control
b) Architecture
c) Hierarchy
d) Chain of command
Question 4
 THE AL –Hashier Educators (TAE)Notes
The main components of an organization's architecture are structural hierarchy, values and
belief systems, contracts and relationships and (two more):

a) Control systems and ways of working

b) Information infrastructure and power structures
c) Control systems and power structures
d) Control systems and information infrastructure
Question 5

A 'vertical architecture' is one which:

a) Has a tall hierarchy

b) Has many layers of management
c) Extends beyond the boundaries of legal ownership
d) Is very bureaucratic
Question 6

Organizational structures and systems can be judged using five dimensions (ABCDE) to
assess whether they are achieving an appropriate balance. These five dimensions are
Autonomy, Bureaucracy, Cultural Control, Decentralization and:

a) Equal Opportunities
b) Economic Incentives
c) Equality and Diversity
d) Evidence of Learning
Question 7

Employees who work in an autonomous fashion are:

a) Given freedom to make decisions

b) Closely monitored
c) Heavily influenced by organizational culture
d) Motivated by non-financial rewards
 THE AL –Hashier Educators (TAE)Notes
Question 8

Bureaucracy is sometimes seen as a negative thing but it has some benefits for organizations.
Which of the following is NOT a benefit of bureaucracy?

a) It can make information easier to share

b) It can reduce errors
c) It can increase organizational flexibility
d) It can ensure that stakeholders are treated consistently
Question 9

Successful business relationships tend to:

a) Combine relational contracts - to build trust in the long term - with transactional
contracts to cover specific situations
b) Depend upon tightly written legal contracts that take account of every potential
problem or issue
c) Rely upon firms being able to trust their employees and partners
d) Be treated as finite games that both partners know will end sooner or later
Question 10

Goffee and Jones use two variables to classify organizational cultures. These are:

a) Sociability and Synergy

b) Cohesion and Synergy
c) Sociability and Solidarity
d) Solidarity and Cohesion

ANSWERS. B/A/C/D/C/B/A/C/A/C
The Management of Complex Organizations
A holding company is:

a) An organization with a balanced portfolio of individual businesses

 THE AL –Hashier Educators (TAE)Notes
b) A decentralized organization with a small head office that organizes finance for
the subsidiaries
c) A centralized organization with a small head office that helps subsidiaries
develop and finance their strategies
d) A decentralized organization with a large head office that offers a broad range
of advice and services to subsidiaries
Question 2

A firm has a functional director for six areas and an area director for three functions. There,
staff at each area/function will be reporting to 2 bosses. This firm has which type of
structure?

a) Project structure
b) Matrix structure
c) Divisionalized structure
d) Front-back structure
Question 3

An organization structure that is in the main a functional or divisional structure but also
includes project teams to deal with specific issues is called:

a) An M-form structure

b) A front-back structure
c) A networked structure
d) A hybrid structure
Question 4

An organization that divides its structure into two main parts - one dealing with product
groups and one dealing with customer segments is called:

a) A front-back structure

b) A product-customer structure
c) A back to back structure
 THE AL –Hashier Educators (TAE)Notes
d) A matrix structure
Question 5

The essential question that a corporate parent needs to ask is:

a) Does it add value to its individual businesses

b) How does it achieve a balanced portfolio
c) How does it achieve synergies across business units
d) How related should its business units be
Question 6

A corporate parent can offer an individual business a number of 'propositions'. These are
build propositions, stretch propositions, link propositions, select propositions and:

a) Lend propositions
b) Locate propositions
c) Leverage propositions
d) Leap propositions
Question 7

The parenting style 'financial control' will tend to be most suitable in which type of
portfolio?

a) A broad portfolio of fast growing businesses

b) Stable businesses with low investment needs
c) A narrow portfolio of closely related businesses
d) A rapidly changing business environment
Question 8

Which type of corporate parenting style has the closest relationship with its individual
businesses?

a) Co-evolution
 THE AL –Hashier Educators (TAE)Notes
b) Corporate flexibility
c) Strategic Control
d) Strategic planning
Question 9

What is the main reason why organizations enter alliances?

a) To find out how the other organization works, and copy it
b) To obtain synergies between other organizations' resources and their own
c) To increase their capacity to learn
d) Because they have not enough cash to acquire the other organization
Question 10

Which of the following is NOT an important element to look for when selecting an alliance
partner?

a) Very similar culture and resources

b) Compatible expectations and objectives
c) They should have as much to lose as you do if the alliance fails
d) Resources that complement your own

ANSWERS./B/B/D/A/A/C/B/D/B/A

Options and Strategic Method

Question 1

When formulating strategic options, it is a valid option to 'do nothing'. However, this can
lead to:

a) A core competence

 THE AL –Hashier Educators (TAE)Notes
b) A competency trap
c) An infinite option future
d) A limited-option future
Question 2

The future can be broadly divided into four categories; infinite option future, limited-option
future, known future and:

a) Multi-option future
b) Unknown future
c) Semi-known future
d) Fluctuating future
Question 3

A hospital manager needs to consider how to organize resources to cope with elderly
patients. The manager is dealing with:

a) An infinite future

b) A multi-option future
c) A limited option future
d) A known future
Question 4

The government has to plan for the re-sourcing of the health service to deal with the obesity
problem. The government is dealing with:

a) A multi-option future

b) An infinite future
c) A limited option future
d) A known future
Question 5

Which of the following strategies could be considered a 'breakthrough' strategy?

 THE AL –Hashier Educators (TAE)Notes
a) Ryanair's 'no-frills' service
b) Virgin Atlantic's 'upper-class' service
c) British Airway's painted tail-fins
d) Virgin Atlantic's limousine service
Question 6

A 'feint' strategy is where:

a) A firm misleads competitors about its future intentions

b) A firm copies a competitor's strategy
c) A firm enters a new market secretively
d) A firm collaborates with another firm to face a common enemy
Question 7

The slowest way to grow a business is likely to be through:

a) A merger
b) outsourcing
c) Internal development
d) A strategic alliance
Question 8

In the context of strategic methods, 'learning risk' can be defined as:

a) Losing knowledge to alliance partners

b) Developing patents that have no market value
c) Failing to bring in new ideas from outside the firm
d) The financial cost of learning about a new market
Question 9

The merger between AOL and Time Warner was intended to take advantage of:

a) Industry convergence
 THE AL –Hashier Educators (TAE)Notes
b) Industry divergence
c) Industry fragmentation
d) International expansion
Question 10

A firm that has become too large has decided to set up part of the organization as an
independent company. This is known as:

a) Liquidation
b) A management buyout
c) Float-off
d) A sell-out
ANSWERS. B/A/D/C/A/A/C/C/A/C

Strategies in Profit-making Contexts

Question 1

Which of the following would NOT normally be an advisable strategy in the introductory
stage of the industry life cycle?

a) Differentiating on superior product technology

b) Internationalization
c) Collaborating with competitors to build the industry's profile
d) Aiming to maximize efficiency and lower costs
Question 2

Which of the following would NOT normally be an advisable strategy in a progressive

mature industry?

a) Differentiating on superior product technology

 THE AL –Hashier Educators (TAE)Notes
b) Internationalization
c) Divesting non-core activities
d) Aiming to maximize efficiency and lower costs
Question 3

Which of the following industries would be classified as a 'creative' industry?

a) Musical instruments
b) Pharmaceuticals
c) Televisions
d) Lap top computers
Question 4

'Dominant design' can be defined as:

a) The design that is accepted and expected by customers and producers

b) The best design in the industry
c) The most innovative design in the industry
d) The design that producers are forced to adopt
Question 5

At the introductory stage of an industry, products and services are likely to be differentiated
on:

a) Reliability
b) Quality
c) Dependability
d) Functionality
Question 6

An industry which can be described as 'progressive' is characterized by:

a) Incremental product development and efficiency improvement

 THE AL –Hashier Educators (TAE)Notes
b) Radical product development and efficiency improvement
c) Product-based competitive advantage and efficiency improvement
d) Uncertain future and large investment in new products
Question 7

An industry in which large investments are made in products where return on investment is
very difficult to predict is known as which model?

a) The creative model

b) The chaos model
c) The complexity model
d) The convex model
Question 8

In a mature industry experiencing intermediating change it means:

a) The industry is about to go into decline

b) The industry is going into a re-growth phase
c) The industry's interaction with customers and suppliers changes
d) The industry's assets and capabilities lose most of their value
Question 9

Firms confronting turbulence must chose from three strategic postures; shaping the future,
adapting to the future and:

a) Collaboration
b) Unrelated diversification
c) Phased adoption of the new approach
d) Establish a dominant design
Question 10

Which of the following is a typical characteristic of a hypercompetitive industry?

 THE AL –Hashier Educators (TAE)Notes
a) Firms are always cutting prices
b) The need to compete fiercely is embedded in the belief system of every firm in
the industry
c) Investment is cut to a minimum to keep costs down
d) Only the industry leader is profitable
ANSWERS. D/A/B/A/D/A/A/C/C/B

Effecting Organizational Change

Question 1

There are different magnitudes of strategic change. 'Modular transformation' can be defined
as:

a) Fine tuning the workings of the existing strategy

b) Incremental adjustment to reflect changes in the environment
c) Radical change at the level of the business unit
d) Radical change at the level of business and corporate strategy
Question 2

Which of the following triggers for change is likely to be most easily accepted?

a) A change in stakeholder demands

b) A decline in performance
c) A change in the business environment
d) A change in management
Question 3

Greenpeace instigated the reversal of Royal Dutch Shell's decision to dispose of a redundant
oil facility in the North Sea. This was an example of:

a) Power
 THE AL –Hashier Educators (TAE)Notes
b) Moral legitimacy
c) Pragmatic legitimacy
d) Cognitive legitimacy
Question 4

On Eden and Ackermann's (1998) Saliency/Interest grid, if a stakeholder is classified as low

saliency and high interest, how should the organization respond?

a) The organization can ignore them because they are unaffected by the strategic
proposal and cannot influence it anyway
b) The organization needs to be aware of them because, although the stakeholder
has only limited directly influence on the outcome of the strategic proposal, their high
interest may make them lobby more salient stakeholders to intervene
c) They must not be ignored because they have a high interest and high power
d) The organization needs to be aware of them because although they have low
interest, they have high power and may be persuaded to become involved on someone
else's behalf
Question 5

Greenpeace joined together with consumers to fight against the dumping of the Royal Dutch
Shell oil platform. They formed a:

a) Collaboration
b) Union
c) Coalition
d) Crowd
Question 6

When an individual exhibits 'discarding' behaviour in reaction to organizational change they:

a) Start to sell the benefits of the change to other employees

b) Acknowledge that some of the old ways had flaws and accept that the new way
needs to be adopted
 THE AL –Hashier Educators (TAE)Notes
c) Cling to the old way of doing things although they recognize that a change has
happened
d) Are in total denial that any change has happened
Question 7

The TROPICS test is used to assess whether a change should be implemented using a hard or
soft approach. The 'S' stands for:

a) Source of Issue
b) Stakeholders
c) Salience
d) Subjectivity
Question 8

Two types of activity that might be expected to occur close to the beginning of most
successful change programmes are:

a) 'Mergers' and 'acquisitions'

b) 'Empowering and building competence and confidence' and 'Spreading and
consolidating change'
c) 'Institutionalizing the new routines' and 'preparing for the next round of change'
d) 'Building a sense of need, urgency, and commitment' and 'Developing and
communicating a shared vision of change'
Question 9

A change agent can be defined as:

a) A top management expert who knows all parts of the organization
b) External consultants who analyze the organization and recommend the changes
that need to take place
c) The person or group in an organization that people try to influence in order to
get their personal concerns addressed within the organization's strategy
d) A person or group of people who take on the role of promoting change within
an organization
 THE AL –Hashier Educators (TAE)Notes
Question 10

Buchanan and Boddy suggest fifteen roles for a change agent which they have classified into
five 'clusters'. These are goals, roles, communication, negotiation and:

a) Managing up
b) Managing down
c) Managing outward
d) Managing inward
ANSWERS. D/B/B/B/C/B/A/D/D/A